At any given moment, at all hours of the day and night, tens of thousands of people in an exponentially-growing online community believe they’re plotting the future of the Internet. More than 200,000 members of the NBA Top Shot Discord are convinced the blockchain-based collectable is a rocket ship that’s just starting to tap into its fuel supply. And for more and more each day, the Discord is their best source for news about the digital basketball memorabilia that’s quickly become the most-hyped Non-Fungible Token (NFT) in a fast-developing cryptocurrency marketplace.
The sprawling boards are a nonstop stream of messages about market value and smart investments and diamond hands. First timers wander into #general and ask when new packs of these video highlights will go up for sale. Moment flippers and day-traders lament the Top Shot marketplace going down for maintenance in #selling or about being unable to extract money from their Top Shot accounts in #vent. When complaints come many more talk about that future, calling everyone present early adopters of the Dapper Labs product that’s still very much in beta, touting the value of their collections on evaluate.market and dreaming of what’s to come.
Like every online community, the board has its own memes and lore and personalities. But NBA Top Shot has extended its influence far past those waiting for pack drop announcements on Discord. The platform is the talk of the NBA world, the latest instance coming this week when the league used Top Shot to reveal its Rising Stars selections as part of NBA All-Star Weekend.
For some, the announcement and a slew of All-Star Game-related pack drops is the latest heights for the wild ride that is NBA Top Shot. It meant new packs, full of fresh Moments and even more money likely to flood into the marketplace that’s seen hundreds of millions of dollars in sales and transactions in recent few weeks. To skeptics, though, the metaphor was perfect: a risky collectable marketplace for a product that doesn’t have any tangible form had announced the hypothetical rosters for a basketball game that doesn’t exist.
The enormous gulf of opinion between its biggest boosters and loudest critics is part of what makes NBA Top Shot so fascinating. The growth is impossible to ignore: it officially debuted in the summer of 2020, about a year after the NBA first announced a partnership with Dapper Labs to bring the blockchain-based product to market. Things really took off at the start of the 2020-21 season, though, and by January the collector base exploded in a way that’s surprised, and thrilled, everyone at Dapper Labs and the NBA that’s worked to make Top Shot a reality.
“The engagement we’ve seen around NBA Top Shot since the start of the season has exceeded all of our expectations,” Adrienne O’Keeffe, NBA associate vice president of global partnerships, told Uproxx by email. “The product is still in beta and Dapper is focusing all of its efforts on scaling its operations to accommodate the demand. This is a partnership, and we’re working hand-in-hand with Dapper Labs to create a compelling product for our fans.”
Some of that partnership is working to determine which Moments get minted on the blockchain and sold by Top Shot, which quite simply can’t keep packs in stock. Like trading cards, Dapper initially hoped to make “common” packs always available so anyone with $9 can start a collection of low-value moments and maybe luck into a LeBron James or valuable rookie highlight. Instead, every single pack has remained sold out for weeks, and drops have seen hundreds of thousands of people leaving online queues empty-handed. So while seeing the hashtag #NBATopShotThis is a nightly occurrence on Twitter these days, actually getting your hands on a pack has become something of a challenge.
Shout out to my family and friends who I've been ignoring for the past few weeks. Things escalated quickly! 😆 pic.twitter.com/gLYp5YTQg8
— Caty Tedman (@CatyTedman) March 3, 2021
No one has felt the joys and demands of that growth more than the team at Dapper, which is working frantically to keep up with the influx of new customers and match expectations of a now-enormous group of collectors.
“We had optimism that it would grow and become a huge thing in the sports collectibles world,” Jacob Eisenberg, community lead for Dapper Labs, told Uproxx last week. “I think I’d be lying if I said we thought it was gonna happen as quickly as it happened. Like, we’re still in beta.”
NBA Top Shot, for better and worse, is a tech product that’s evolving in real-time. Much of Dapper’s daily struggle is in dealing with the growing pains of attempting to scale a product still in development. Eisenberg said Dapper’s engineers have “exponentially improved” the site’s capacity for traffic and simultaneous clicks from users, from a few hundred just weeks ago to tens of thousands in recent days. But the site often goes down for maintenance as new bugs and problems pop up, as it did for hours after its Rising Stars drop on All-Star Sunday. Scheduled pack drops are often delayed as botting and other issues arise in the huge activity the site sees in anticipation of a release.
Marketplace maintenance has been the story of the week on @nba_topshot.
The Dapper team has been working to scale and fend off bots and other issues this week, keeping the marketplace out of commission for significant periods.
— Steef (@SteefCrypto) March 7, 2021
Creating the product — literally minting new Moments on the blockchain — takes time and resources (and a LOT of energy, unfortunately), as does everything else the now-understaffed Dapper needs to handle as added publicity brings in more and more users. Dapper, which uses a blockchain called Flow to operate Top Shot, essentially has to decide what parts of the site to prioritize maintaining while also handling customer service issues, a huge pool of new users demanding new packs and those who have made real money buying and selling on the platform asking to extract those profits back into the physical world.
Controlling that growth is a balance, too. Eisenberg said Dapper is basically forced to disable new user signups with every major TV appearance or Twitch stream from NBA players who are now flooding into the market themselves. The same move is made before pack drops to cut down on multiple accounts and bots, which can take away packs from actual collectors playing fair. It’s a delicate balance, and some collectors are more sympathetic about the road ahead than others.
— Steve Poland (@popo) January 25, 2021
“They need like 100 more engineers at this point,” Steve Poland of Mighty Minted, a Top Shot newsletter, told me in February. “And they’re just trying to do whatever they can to kind of idle this rocket ship and keep it on the ground because they’re just not ready for this much. I doubt they want the publicity they’re currently getting.”
Eisenberg said Dapper had hired 10 new employees to handle outstanding support tickets about things like transaction issues and site errors this month. That’s just the start of the hires, and employees are constantly linking their jobs page on social media. Eisenberg himself is now working with a copy editor to handle some of the writing and communications Top Shot needs for its Moments, blog and social media accounts. It’s been an exhausting few weeks for the small staff, one that’s seeing new and unanticipated work arise as the site grows. Dapper, for example, has started doing livestreams during pack drops and spending time on Twitch streams doing promotional events, which add attention to the site and also take away precious hours to handle other business.
That work includes some big priorities for Dapper, like letting collectors withdraw money from their Dapper accounts. Dapper said last week that just 6,000 people can withdraw money from their accounts, and the percentage of people with accounts that can get their money out is still in the single digits. Part of the reason is the process is complicated by tax issues, credit card transactions, people with multiple accounts, and identity checks Dapper says they need to do. It’s labor-intensive and time-consuming work, but it’s a problem they’re racing to fix.
“I think that’s the most valid criticism we get,” Eisenberg said. “And we know that’s something that we really want the community to have.”
For those without withdrawal access yet, FYI this is what you see. $25 fee for wire transfer (thats standard anywhere) or $5 fee if USDC (to a Coinbase crypto wallet). #NBATopShot @nba_topshot pic.twitter.com/2kQKosa7yO
— Mighty Minted (@MightyMinted) March 5, 2021
For Poland, a tech veteran who covered the rise of Web 2.0, the rise of Top Shot follows a similar model of past products like Twitter. Poland described seeing the early version of the microblogging platform at South By Southwest in the mid 2000s. Once it clicked for him, and he saw the potential the platform had he knew, like so many others, that “this is the future.” Poland said it’s happening again with NBA Top Shot, frustrations, and fail whales, and all.
“We’d see the “fail whale” every single day and kind of get a little angry and frustrated,” Poland said, recalling the image that would come up when the growing platform was at capacity in its early days. “And I’m seeing that with NBA Top shot. These pack drops go wrong, or whatever, and these users that are on there are very vocal and that’s when you know you’ve got, just, a home run. Because everyone just wants this so bad.”
Other problems remain, like collectors who have created multiple accounts in order to increase their chances of snagging rare packs, “gifting” the moments to their non-burner after a drop. And then there are bots: scripts written for profit by coders that can flood queues with thousands more spots in line than there are actual people. It’s a constant battle, and Dapper wouldn’t get specific about the volume of bots they see, but it’s a problem they’ve acknowledged several times and have decided to get serious about by officially banning them last month. NBA Top Shot has sneaker and concert ticket problems, but for intangible video highlights that are now routinely selling for six figures if you get lucky enough to pull something rare.
Actually this is "Daily Transacting Users" or DTU – doesn't include ~80k users waiting in pack queue who didn't transact and another ~70k #TopShot DAU active without spending yesterday
266k DAU in total past 24h – most just getting started!
— Roham (@rohamg) March 6, 2021
“These are kind of problems that no other company has gone through before,” Eisenberg said, noting their model and success is fairly unprecedented, especially in the digital collectable space. “That’s kind of carving out new territory, so we don’t have the benefit to learn from others’ mistakes. We don’t have the benefit to know exactly how big problems are when we’re analyzing them.”
As demand — and perceived value — of packs increase another frequent criticism from collectors has been packs seemingly set aside before drops. They’ve noticed unopened packs landing in the hands of NBA players and others to open on livestreams, sometimes hours after pack drops where hundreds of thousands are left out in the cold. Dapper has been more transparent about holding some packs back lately, saying certain amounts are “withheld for community giveaways, customer service and promotional purposes.” And Eisenberg admitted that, while players have gotten packs for giveaways and promotions, that’s part of the company’s strategy.
“We made a conscientious decision not too long ago that if it’s an NBA player coming to us wanting to do anything from you know, a pack opening to a giveaway, we’re going to help facilitate that,” Eisenberg said. “Because at the end of the day, NBA Top Shot is nothing without the players, the moments they create on the court.”
The influx of players in the Top Shot community has complicated things for sure. While players like LeBron James and James Harden have claimed not to know anything about it, their moments are some of the most popular on the platform. It’s already made its way into trash talk on the court, and it’s not hard to imagine SportsCenter’s Top 10 list replaced by a Top Shot reference in sports broadcasts, should that league partner with Dapper if things keep growing.
That growth, in more ways than one, has been fueled by some NBA players who have wholeheartedly embraced Top Shot and started making moves in the marketplace. One of the first was Pelicans guard Josh Hart, who last month became the first player in NBA history to pull a Moment where he was scored on by another player. But others have followed and become downright evangelical about their embrace of what they call the future of collecting.
“I think there’s two things that a lot of us love, and that’s money and basketball,” Kings rookie Tyrese Haliburton said late last month, pitching reporters on a Buddy Hield Dunk Moment selling for nearly $8,000. “We’re at the ground level, but we can take this to the moon.”
The cheapest version of that Moment, mind you, is currently selling for nearly twice as much a fortnight later.
Players like Terry Rozier have bought their own moments and resold them to, presumably, people who do not also play in the NBA. The novelty is notable, but also profitable. There are various ways some Moments are considered to have higher value than others: low circulation count, low serial numbers, and even specific numbers like 69, 420 or a player’s jersey number. It’s all determined subjectively by the market as a whole, which has already decided there’s value in knowing an NBA player has owned it for themselves.
Part of what makes many so excited about blockchain technology is that its movement comes with a visible ledger, which means everything done on Top Shot can all be seen publicly and in real time. Seeing which NBA players have owned moments is just the start of that transparency: Third parties have already built tools to measure value and do other analytics to gauge scarcity, market trends and find deals others with fewer tools may miss. And while Dapper has promised a digital game — expected to be akin to FIFA’s Ultimate Team — as one of many things attached to Top Shot moving forward, avid collectors have already made a fantasy game of their own.
All of this market movement has Dapper making millions on pack sales and fees per transaction, and it’s reportedly seeking a $250 million investment round that would value the company at $2 billion. That would certainly dwarf an earlier $12 million investment led by NBA players like Spencer Dinwiddie, Andre Iguodala, Aaron Gordon, JaVale McGee and Garrett Temple. Those players certainly got in on the ground floor, but on top of that all players get a cut of sales and fees as part of the NBPA through their licensing agreement with Dapper. The potential grey areas of conflict, though, have been met with enthusiasm everywhere, including from the NBA.
“At its core, NBA Top Shot, is a digital collectible game that rewards building and showcasing sets,” an NBA spokesperson said when asked about players getting involved with buying and selling moments. “It gives our fans a chance to own and display their fandom just like any other piece of memorabilia.”
"I think NFTs are here to stay in perpetuity. I think the NBA is one of the great IPs in the world, so I'm extremely bullish." –@garyvee on NBA Top Shot (via @Arda on ESPN's @SportsNation) pic.twitter.com/uQeLIRcCvB
— NBA Top Shot (@nbatopshot) March 5, 2021
Despite skepticism from outside observers, nearly all of those already on the ride only see problems as roadblocks normal as part of the beta they’ve signed up to endure in order to strike it rich when the rest of the world comes calling. And though many on the platform are bigger fans of cryptocurrency and speculation than any specific NBA team, the messaging remains that this is for fans first and foremost. Eisenberg equated NBA Top Shot to going to the arcade: you’re there to have fun, and maybe if you’re lucky or good at enough of the games you can win one of the big prizes. But no one goes expecting to win all the big stuff every time they go.
“We’re building Top Shot, very specifically, for the collectors that believe in Top Shot as kind of collectibles, long-term,” he said. And the site has tried to make it clear to those looking to make “a quick buck” that it will take time, and there are roadblocks to getting in, flipping a bunch of Moments and getting that money out. Despite all that, though, many people flooding into the market and studying its growth certainly seem to have their eyes on the big prizes.
“This is instant. You can just buy a Moment in a second, and list it a minute later,” Poland said, noting the broad crossover of daily fantasy enthusiasts, gamblers and sports fans who have congregated for NBA Top Shot. “And make a profit, possibly. Or you could also lose it all. This is the stock market. People are day trading these Moments.”
That speculative aspect of the marketplace has already resulted in some big swings and market depressions following pack drops, announcements or the completion of challenges. It’s why Eisenberg has said in many interviews that Moments should only be bought with disposable income, not money that should be going to more essential expenses like rent.
“We get a lot of feedback from collectors like ‘I missed my kid’s soccer practice for this drop.’” Eisenberg said last week. “And my response is, like, you should reexamine your priorities, perhaps.”
Regardless of priorities, it’s that kind of enthusiasm that’s made NBA Top Shot so popular so fast. And the enthusiasm is contagious. Many players and those in the NBA media have commented on the community’s dedication to the platform as part of the reason they got hooked in the first place.
I didn’t know what @nba_topshot was at first. But then I found myself having fun… and making friends! I spoke about trying out Top Shot & building my collection on @SportsNation @espn 🏀⛓ pic.twitter.com/gRsZfS9T62
— Ros Gold-Onwude (@ROSGO21) February 24, 2021
“I think this community is very welcoming and what’s kind of cool is that everyone has some vested interest in its success,” Eisenberg said. “If you’re buying moments you want the community to continue to grow so I think the more it does grow the more great content creators, they’re gonna come to the yard and continue to spread the good word of what Top Shot has done for them and what it can continue to do.”
Fittingly it seems that when you ask around the advice offered, whether to the curious or more skeptical alike, always seems to be the same: just buy a pack.