Will NBA Top Shot Mania Make Dapper Labs an Ethereum Contender?
Five months into its open beta, NBA Top Shot has processed more than 3 million transactions and reached $460 million in secondary market sales. Now, as collector interest in NFTs has reached feverish proportions, the creators of the platform have also reached a jaw-dropping level of development.
Dapper Labs raises $305 million in latest funding round, led by tech-focused investment firm Coatue, which valued the three-year-old startup at $2.6 billion. The funding round was recently announced, bringing the Vancouver-based startup's total funding to $357 million.
“There’s more fuel in the tank,” said Roham Gharegozlou, CEO and founder of Dapper Labs, which Forbes described as a “big bet on an open platform.”
This is a unique digital asset bet on NFT, which is realized through ledger based on blockchain technology. For NBA Top Shot, that means selling highlights from NBA game video and packaging them as a digital sports card. Packages are priced based on the rarity of the clips they contain, ranging from $9 to $230 for three to ten minutes.
At the same time, Dapper Labs can take a share of the transactions between users, charging a transaction fee of 5% for each transaction on the secondary market. However, the price of NBA Top Shot is unstable. Due to the impact of player performance, injuries and traded players, the turnover of NBA Top Shot is different.
But overall demand is skyrocketing,In the past 30 days, NBA Top Shot has reached more than $200 million in transaction volume in the secondary market, which means that Dapper Labs will collect $120 million in transaction fees per year, among other things, it gets money from the initial package sale.
That number is closer to $49 million so far. At the same time, the company will distribute the proceeds to the NBA and the National Basketball Players Association.
The value of the NFT primary market has almost quadrupled in 2020, surpassing $250 million, as cryptocurrencies such as Bitcoin benefited. According to a report provided by retailers and entertainment companies, this is just the beginning.
Music artists including Mike Shinoda and The Kings of Leon have released songs and albums in the form of NFTs in the past few weeks. The mania for NFTs reached a fever pitch this month. A digital composite created by a digital artist named Beeple, Mike Winkelmann, fetched $69.3 million at a Christie's auction.
NBA Top Shot, the leading application in this space, now has more than 800,000 registered accounts, of which 338,000 users have at least one minute of time, which makes the scale of the platform an order of magnitude larger than other NFT projects。
Miami Heat player Andre Iguodala said: "You can't predict the development of NBA Top Shot. If someone told you at the time, you would definitely say they were lying." Iguodala last year Started investing in Dapper Labs in the summer and joined this new round of financing plan.
Other investors in the round included Andreessen Horowitz, Chernin Group, Union Square Ventures and VenRock, as well as Lottery Hornets owner, basketball legend Michael Jordan and Sacramento Kings' Vivek Ranadive. There were also more than 30 professional athletes, including Brooklyn Nets forward Kevin Durant, St. Louis Cardinals third baseman Nolan Arenado and Buffalo Bills Stephen Diggs, among others.
This is not the first time Gharegozlou has tried the NFT business. Earlier, he designed a game called "CryptoKitties" that allowed users to collect and breed felines as NFTs.
The game nearly overwhelmed the ethereum blockchain on which it was built, as the cost of completing a transaction relative to the amount of traffic on the system skyrocketed from a penny to a few dollars, causing user interest to quickly wane.
Gharegozlou founded Dapper Labs in 2018 and led CryptoKitties' IP, team and technology to start a new attempt, but he soon decided to build his own blockchain platform Flow instead of repeating his experience on Ethereum.
Launched last spring, NBA Top Shot soon went on sale in a limited private beta before opening to the public in October. So far it has proven capable of handling a certain number of user groups, Gharegozlou said, with a 20-fold increase in the number of users in the past two months alone.
Gharegozlou, 35, said of the difference between NBA Top Shot and CryptoKitties: "The amount of transactions we have done in the past year, NBA Top Shot has done in one day."
With the crypto art marketplace VIV3.com running on FLow, companies like Warner Music Group and game developer Animoca are also developing products on the platform.
For NBA Top Shot, there are still challenges. Users complain about package release delays, website outages, and unintelligent customer service bots, a common problem in e-commerce, leading to long queues of potential collectors. For example, the release of a software package attracted 400,000 users, most of whom returned empty-handed.
The process of cashing out NFTs has also drawn criticism for the company, which requires users to go through customs before withdrawing money. The regulation was meant to prevent XI money and keep the company in compliance with financial regulations, but the recent surge in user numbers has created a massive backlog on the approval team, meaning tens of thousands of users have funds in accounts at NBA Top Shot that they can't was transferred to the real world.
Over the past two weeks, NBA Top Shot has reduced the number of service tickets by 90 percent and quadrupled the size of its fraud prevention and compliance team, with plans to double again next week, Gharegozlou said.
In a blog post on Saturday, the company noted that the number of users receiving withdrawals has surpassed 28,000, a 450 percent increase in four weeks. Dapper also tries to limit the number of new users and the frequency of transactions to solve some problems caused by the influx of users.
The introduction of new funds will be used to further address these issues and add new features to NBA Top Shot, but Gharegozlou also hopes to entice third-party developers to strike deals with other intellectual property holders in sports or entertainment to replicate the generic NBA Top Shot. The company has already announced partnerships with the WNBA and UFC.
Gharegozlou said: "We didn't focus on rushing things and copying and pasting. We think the reason why NBA Top Shot is interesting to everyone is also because it will be a sustainable economic system, which is really basketball. A great feature."
Gharegozlou added: “We hope it can become a currency for the cryptocurrency market advocates.”
The original text comes from Forbes, compiled and organized by Blockchain Knight. The English copyright belongs to the original author. For Chinese reprint, please contact the compiler.
