I am not interested in sports. I pay attention to the financial elements but other than that🤷♀️ When I learned about NBA NFTs I was intrigued, digital assets and the NBA together😱 Then, I found out I could buy trading cards with my credit card. The digital assets + NBA + getting miles for a blog post = 👍
The Process
Drops
The platform releases digital packs through drops. Drops create scarcity and urgency for consumers on the platform.
How Drops Works
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Announce a drop for next Friday
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Make a limited number of digital packs available
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Allow consumers to register for a spot
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Give a time limit for consumers to register
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On drop day, give consumers a time limit once they get to the top of the queue
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Give a window for consumers to claim their purchase
The platform might announce a drop of 5,000 packs to 25,000 consumers. The announcement might make consumers register early and buy right at opening time. The drop would start on Friday and end Monday. Giving consumers a small window of opportunity. If one consumer misses their shot, the platform has 4 others waiting.
Revenue
Secondary Market
Once the consumer purchases the packs, they have 2 options, hold or sell. The platform has a secondary market for consumers to sell their trading cards.
Individual Cards
Some consumers might want to buy individual cards, not packs. Buying individual cards avoids the urgency and scarcity of drops. Consumers know the trading card's exact value.
Challenges
The platform challenges consumers to collect specific trading cards within a certain time. Challenges will have a theme. The trading cards might use moments from the same game, team, or series. If the consumer completes the challenge, they will get a trading card. The trading card given will have more value than the average trading card from a pack.
Determining the Value of Trading Cards
The platform has millions of trading cards available for sale. How do consumers determine the value of their trading cards?
Status
Each trading card gets a status. Some might have a status of legendary, limited edition, or common. If the trading card has a status of common then there are many. A legendary status makes the card rare.
Serial Number
A moment will have a certain number of trading cards get made. They might have 25,000 made or 100. The higher the serial number, the more valuable the card.
Expenses
Purchases
The cards are not free. In the words of Frank Reynolds, "You gotta pay the troll toll to get in."
Service Fee
The platform charges a service fee with every transaction. A service fee has more value than a transaction fee. Which I have discussed many times. The service fee keeps the platform running.
Revenue Reducers
Withdrawal Fees
The platform has many options for consumers to get their money. Certain methods might come with a fee for the withdrawal.
Revenue Ideas
Trading Platform
A consumer might get a trading card that they do not like. But they see another trading card with a similar value and want it. If consumers trade cards, the platform would have more traffic. Compared to both consumers having to buy the cards. For example, I have a Lebron James card with a value of $75. Brendan has a Steph Curry card worth $75. We should have the opportunity to trade cards for $1.
Video Highlights
Some consumers might have hundreds of moments. Moments can get edited into a video. Then, posted to YouTube. If the videos become popular, they will make money from ad revenue.
Interactive Game
These cards look cool. But after a while, I was like, "Dude, now what?" You can not do anything with them. A game can get made with moments. Stats from that moment's game can get used. Consumers pick 5 moments and face off against another consumer. Whichever consumer's moments had better stats wins.
Brendan wants everyone to know that I came up with the idea while talking to him.
Problems
Randomness of Packs
Consumers spend money on packs but do not know if they will get value back. They could get trading cards that no one wants. Then, get little value back.
Many Options for Resale
I can get a trading card that has 25,000 others. If someone were to want that card they have options. If they do not like my price, there is someone else selling for less.
NBA Offseason
The NBA season does not happen year-round. What happens to my cards from 2021 during this time. Or during the 2022 season? Will the value go up or down?
Fun Fact: I call the offseason "Contract Season: The Most Interesting Part."
Pricing the Trading Cards for Sale
Thousands of consumers have the same trading cards with different serial numbers. How do consumers know the fair value of their cards?
Speculation
Questions I still have after researching.
Will Last Season's Cards Become Popular If A Player Has A Break-out Season?
I have trading cards of NBA players that are not popular. What if they have a break-out season in 2022? Will that make my 2021 trading cards more valuable?
Does A New Season Devalue Previous Season's Cards?
A new season means new packs. New packs mean more cards.
My Opinion
Soccer NFTs might become more popular than NBA NFTs. Soccer has more players, leagues, teams, and fans. If started with the right league. Then, soccer NFTs will become more profitable.
I still wonder if people are buying cards as an investment or for fun? For each answer, I have different questions. Someone purchased a Lebron James card for $210,000. The moment has 59 cards with a serial number of 12. Three out of five of the top-selling cards on the platform come from this moment. If people buy trading cards for fun, then why pay $210,000. Someone must have had the card for sale at a lower price. Then, if the card got bought as an investment, who will pay $210,001+ for the card? Why is the specific moment worth being the top-selling moment on multiple occasions?
Basketball allows players to create their own style of play. Players do not have the ability in other sports. Making digital trading cards for basketball more interesting than other sports.
For offense plays in baseball, they look the same. Consumers might have a difficult time knowing a walk-off home run from a pop-up. In basketball, Steph Curry has a different shooting method from Kevin Durant. Basketball has enough uniqueness to create moments that people will buy. Moments such as Kevin Durant hitting a game-tying shot to Ben Simmons not dunking the ball. At the same time, soccer players get to display their own unique style of play. Making soccer a good candidate as the next NFT sport.
Conclusion
NBA NFTs introduce blockchain technology to new people. Some people have no interest in NFTs as digital artwork. But add sports, and new people start to learn.