$2B Vancouver crypto company becomes Wall Street of digital collectibles

Mar 1 2021, 10:53 pm

Written for Daily Hive by Sam Chan, VP of Programs at Launch Academy, Western Canada’s Premier Tech Incubator. Since 2012, Launch has helped incubate more than 6,000 entrepreneurs, of which 300 have grown their startups to Seed and Series A stage and raised over $730 million in funding. 

When I was 10 years old, my dad took me to my first basketball game. I spent the weeks prior dreaming about it, fantasizing about the potential dunks and plays. My heart still races when I think back to that time. I was there to cheer on my Vancouver Grizzlies, and they started the game well, despite facing a Phoenix Suns team that had an all-star backcourt.

Suddenly, a short scrawny dude checked in for the purple team. I’d never heard of him. He walked effortlessly up the court. He stopped at the 3-point line. Splash. 3 ball. Then another. And another. My Grizzlies were done, but I didn’t care. 

That was the moment my hero became Steve Nash (who happens to be from BC).

As the years have gone by, memories of that game have gotten hazy, and it’s almost become folklore. Did it really happen? However, what if I could find clips of Nash coming off the bench to pop off from the 3-point line? What if I could, dare I say — own those moments?

Enter NBA Top Shot — the latest evolution in sports memorabilia.

In partnership with the NBA and NBPA, Dapper Labs (parent company of NBA Top Shot) captures specific digital NBA moments to sell online in digital “packs” to anyone who wishes to have them.

Each moment is limited in nature and lives on Dapper’s own blockchain named Flow. As you purchase a moment either through a pack or Top Shot’s Marketplace (more on that later), it becomes yours and your (user)name is attached to that moment and etched onto the blockchain ledger forever.

I know what you’re thinking — what a waste of money, I can just YouTube that LeBron dunk.

You’re right, you can. But there’s a huge difference between Googling an image of Mona Lisa and owning the Mona Lisa, or an authentic digital version released by Leonardo da Vinci.

One37pm does a terrific job of explaining the concept of Non Fungible Tokens (NFTs, the technology that makes Top Shot moments scarce), so I would advise you to read up there if you’re not sold.

Now, back to the marketplace which has become a phenomenon on its own. At its core, it’s no different than eBay or Facebook marketplace where someone can post an asset they own for the price that they wish to sell it for.

If another user decides that price is worth paying, the asset (in this case, the moment) gets transferred to them and that’s also etched on the blockchain. 

Here’s where it starts getting crazy. 

Let’s use this no look LeBron James 3-Pointer as an example. At the time of writing, it’s going rate is about US$1,450 per moment. There are only 12,000 of these moments, period. But imagine, thousands of people picked up this “common” moment in a $9 common pack (or paid $3 for the moment)

To put this into context, let me compare it to something else that’s had the whole world talking in the last month: GameSpot shares.

If you had purchased $GME at the lowest point in the last 52 weeks, that would have been $2.57 per share. And if you somehow had hindsight goggles and sold at its absolute peak, you would have sold at $483 per share, meaning a 188x profit, an absurdly crazy return.

However, by that same math — if you pulled a LeBron James in a common pack for $3, at a $1450 sale, that’s a 483x return, or more than 2.5x my absurd $GME example. And the value of LeBron James’s moment is still rising!

While not every pack is going to have a LeBron pull, the potential gains has peaked the interest of both basketball fans and hustling opportunities alike.

According to CryptoSlam, a website that measures the sales and transactions of every Crypto Collectible on the internet, NBA Top Shot has done over $216,000,000 in sales transactions in the last 30 days. That’s more than the rest of the crypto collectible community’s all time sales combined. And it’s still in beta, with stability of their platform being the Dapper team’s main focus at the moment. 

The team from Dapper Labs is proudly bred from Vancouver, first making noise with the creation of a blockchain game called Cryptokitties.

When it originally launched in 2017, Cryptokitties created so much momentum that they actually slowed the Ethereum blockchain to a stop, the world’s most-used blockchain network. They took their learnings and recognized that to build an NFT platform to scale, they needed to move off the Ethereum network and so they raised 50M+ in a Series A fundraise to build their own blockchain platform (Flow). 

On top of their overwhelming success in partnership with the NBA, the Dapper team has secured deals with some of the hottest content IP out there including the UFC, Dr. Seuss, Warner Music Group, Samsung, and more.

In some ways, all of NBA Top Shot can be considered a beta test for what is to come.

Already a Vancouver startup success story, Dapper isn’t close to being done yet; they are currently in the middle of a $250M raise at a valuation of $2B. All in all, Dapper Labs has positioned Vancouver to become the Wall Street of digital collectibles, and they’re doing it one dunk at a time.

Not too shabby for a city that “couldn’t support its own basketball team.”

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