It was a whirlwind two weeks for Gaurav Raj Thakur. The 40-year-old digital content sales professional has never been so excited in his life. Having worked across media platforms, Thakur has been swept off his feet by what he calls a “digital renaissance.” Spoilt for choice, Thakur is among millions who are increasingly getting attracted to Non-Fungible Tokens (NFTs), not just for their uniqueness but for the potential they offer to make a quick buck. Drawn by algorithmically-generated dissimilar zombie like faces called CryptoPunks to soccer wizard Messi, from Virat Kohli and Sachin Tendulkar to programmatically generated monkey faces, fandom is seeing a tectonic shift in ‘ape-ic’ proportions.
In the last fortnight in India alone, at least three companies have launched NFTs. No prizes for guessing that these companies want to trade on two of India’s favourite topics – Bollywood and cricket. NFTs are unique and can’t be replicated. Each one accrues value independently, as NFTs derive their value from how scarce they are. They’re stored in digital wallets as collectors’ items. Beyond art and sports, people have also found uses for NFTs in virtual real estate and gaming.
Globally, NFTs are seeing massive popularity and the trend will only grow. Thakur admits he is no great sports lover but what is attracting him to sports NFTs is the lure of trading collectibles that have a huge potential to be sold at a much higher price. For example, Thakur bought five Messi NFTs and two of these were at a premium value of $499 each. Within a month, he sold them at 15 times that price through a social networking platform called Discord where followers make groups and trade. “It’s like the stock market but here you are not buying stocks. Like an Amazon marketplace, there are platforms like OpenSea, perhaps the world’s largest trading market for NFTs. You just have to track what is being sold and then pick items that can be resold and win you a handsome profit,” says Thakur.
NFTs are gaining traction in the sports industry with things like digital collectibles on offer. Sports NFTs can include digital trading cards, signed sports memorabilia and video clips. They enable passionate sports fans to own a slice of sports history in the form of a sporting image or video. NFTs also allow fans to engage and invest in tangible sporting moments.
“The success of various sporting NFT platforms and events in recent months have only highlighted millions of fans’ appetite for digital content, with the world’s top talent in football, boxing, basketball and much more getting involved in the NFT industry. The sale of a limited-edition Tyson Fury digital artwork on July 16, 2021 for just under $1 million marked one of the highest bidding sports NFTs ever and shows that digital collectibles may be just starting their incredible journey,” says Ankit Wadhwa, CEO of Rario, a platform that aims to give cricket fans around the world the opportunity to engage at a deeper level with the players and the teams they love.
While the sports NFT market is still at a fledgling stage in India, it is quite evolved globally with platforms like Sorare, NBA Top Shot and Socios firmly entrenched in the business of sports NFTs. Sorare, for example, has created a collection of NFT football trading cards that players can use to build their fantasy team and compete in order to unlock more NFT cards and win Ether (digital currency) whose value has gone through the roof in recent times. According to reports, Sorare is officially licensed with over 150 football teams, including European giants such as Real Madrid, AC Milan, and Juventus. After their latest funding round of $650 million, Sorare is valued at $4.5bn within two years of starting up!
Fans have been flocking by the thousands to the NBA Top Shot online platform to buy short videos of dramatic sequences. One video clip showed NBA superstar LeBron James in one of his more spectacular moves. It lasted no more than a few dozen seconds but on Top Shot, it instantly became a collector’s item that sold for a whopping $208,000, said a company spokesperson.
Launched in early October by Canadian firm Dapper Labs in partnership with the National Basketball Association, Top Shot allows customers to buy and sell these short video clips -- called “moments” -- at prices that vary depending on demand and rarity. Every clip is an NFT whose identity, authenticity and traceability are theoretically indisputable and tamper-proof.
Behind all the packaging and selling, there is a deep sense of business and market sustainability because the competition is growing rapidly. The Momentranks website, which says it provides “accurate, real-time moment valuations,” puts the current value of the NBA market at $1.8 billion. Paradoxically, most of the video clips being sold can be viewed for free elsewhere on the internet, primarily on YouTube but you can never own them, digitally. Industry experts say the value of each collectible depends on a combination of factors – the rareness of the NFT and the sentiments of fans or collectors. When these two factors are in play, NBA’s NFT moments could sell for hundreds of thousands of dollars – as was the case for a particular Lebron James dunk highlight that sold for $387,000!
The unique thing about NBA Top Shot is that collectors can buy these NFTs with conventional payment methods. This removes all of the technicalities that sometimes shroud other NFT platforms that solely provide the option to purchase collectibles with crypto. The NBA Top Shot has generated over $704 million in total sales, according to NFT portal CryptoSlam. In line with the NBA’s philosophy, Dapper Labs and LaLiga have just announced a partnership to introduce Official Football NFT Collectible Highlights. This new experience will give fans the opportunity to collect and own some of the most talked-about contemporary and iconic in-game moments from their favourite teams from over 10 seasons of play. Featuring dynamic video-based moments from all of LaLiga clubs, the new experience will be available to fans on Flow blockchain starting June 2022. Flow is a fast, secure, and developer-friendly blockchain built to support the next generation of games, apps, and the digital assets that power them.
“Fans give us the energy that encourages us not to give up. They help us dig in when we’ve got nothing left and they give us support when we need it. To be part of an experience that brings players one step closer to their biggest fans is exciting and meaningful. I look forward to what this relationship holds,” said Carles Puyol, a six-time LaLiga champion, three-time UEFA Champions League champion, and the captain of FC Barcelona from 2004 to 2014.
But there are pitfalls in the business. Investors need to exercise caution when buying sports NFTs. Purchasers must understand the legal rights and obligations that accompany their NFTs, particularly the protections from value erosion based on what third parties may do and the prohibitions affecting purchasers. A purchaser’s failure to comply with the terms could result in significant financial repercussions, such as the termination of the NFT account and the loss of NFTs potentially valued at hundreds of thousands of dollars. Further, the future actions of copyright owners could negatively affect NFT values significantly.
“Official licensing is a key part of our strategy. We have signed deals with official cricketing partners and cricketers and are officially creating NFTs with licensed IP. I would advise users to read extensively about platforms that offer cricket collectibles and not get distracted by unofficial ones,” cautions Wadhwa.
In an emerging Indian market, Bollywood and cricket are already taking significant strides in the NFT business. Amitabh Bachchan is India’s first celebrity to launch his own NFT collection even as global NFT sales surged to $2.5 billion this year.
“There is a lot of demand in the market from cricket fans and NFT enthusiasts. We have already seen $200k of sales in the first month of our beta launch. We are hoping to be at the NBA Top Shot levels in a year, if not less,” says Wadhwa, whose Rario is working with the Caribbean Premier League, the Lankan Premier League and Abu Dhabi T10.
But the major cricket Boards are still iffy about tying up with NFT platforms. Says Bhairav Shanth, the Managing Director of ITW Consulting, a top-notch marketing and branding company that works with some of the richest cricket Board in the world such as BCCI, “I think Boards are waiting and watching how digital assets can transform sports. But let me caution that all that glitters is not gold and NFTs gather their value from the supply and demand, so if the market is flooded with cricket NFTs, the value proposition would become diluted.” Former cricketers like Wasim Akram, VVS Laxman and Lance Klusener and recently even Dale Steyn launched their own NFTs. The International Cricket Council recently invited tenders to make a digital collectibles platform and marketplace for cricket. Further, three IPL teams have started a Crypto-backed token platform to engage fans, to generate revenue lost because of Covid.
“There is still a lot of regulatory ambiguity although in terms of legality, NFTs are certainly placed a bit better than cryptocurrencies because they may have a wider appeal. A casual fan or someone with less knowledge of crypto or tech might still be moved by the idea of being able to own say an iconic moment like Dhoni hitting the winning six at the 2011 Men’s Cricket World Cup,” explains Shanth on the softer side of the NFT phenomenon.
As the philosophy of fandom changes to a more digital and virtual world, bragging, the single most driving force for owning NFTs, will aggressively move away from social media channels like Instagram, Facebook, WhatsApp Status, Zoom backgrounds to Metaverses, says Sidarttha Bezbora, the CEO of VOAX, an upcoming platform that promises users a TikTok feel of NFTs. Inspired by the gaming world, metaverses are shared around virtual worlds created with AR (Augmented Reality), VR (Virtual Reality) and AI (Artificial Intelligence). The term Metaverse covers a wide variety of virtual realities, from workplace tools to games and community platforms. Many of the new platforms are powered by blockchain technology, using cryptocurrency and non-fungible tokens (NFTs), allowing a new kind of decentralised digital asset to be built, owned and monetised.
So NFTs are clearly the drug that is enhancing fresh and novel perceptions of fandom. Thakur says it is “addictive” because collecting things like stamps, coins, music and art is a natural human instinct. Bezbora adds: “NFTs bring these childhood memories into our lives in real-time through blockchain technology, where players trade their own virtual goods.”
Gaurav Raj Thakur is now waiting for kung-fu king Bruce Lee’s digital memorabilia! Yoo-hoo!
(With inputs from NBA, Rario, LaLiga)