As the NFT market grows, our students are learning in real time
NFTs, or non-fungible tokens, have exploded in the last year, with some selling at auction for millions of dollars. At the Quinlan School of Business, our sport management students have a front-row seat to the action.
NFTs are unique digital items that are minted on a digital ledger called a blockchain. The owner of the token has unique access to trade, sell, or share their digital asset.
“I’m learning right alongside my students in real time as we watch NFTs grow,” says Zach Binkley, sport management lecturer. “Much like baseball cards, artworks, or other physical memorabilia, attachment grows just the same for NFTs. NFTs are the collectibles that fit the mobile, social market.”
NBA Top Shot pushes the limits
NBA Top Shot helps to solidify what NFTs are and their potential for growth. Still in beta, NBA Top Shot allows users to buy packs that can range between 3 to 12 moments – highlight reels of NBA games – and range in price between $9 to $999. After purchasing, users can see which moments they got in their pack.
“NBA Top Shot has shot a new bolt of life into the card memorabilia industry. Baseball cards haven’t evolved much. Now with NBA Top Shot taking off, the possibility of growth is real,” says Binkley.
Similar to baseball cards, Top Shot only mints a select number of each moment, creating rarity. This creates an opportunity for basketball fans to grow their collection by buying moments from the marketplace to add to their collection.
“The interactivity of Top Shot is bringing new people into the sport,” says Binkley. “History is being taught again with highlights from the NBA’s greats being minted as moments. It is reinvigorating the sports world.”
Learning in real time
Binkley had been studying NFTs with his sport management students since NFTs first came onto the market.
“In my sport finance class in Fall 2020, we discussed blockchain and crypto currency, data analytics and gamification, legal sport betting and fantasy sports,” says Binkley. “NFTs were just starting in the fall. By week 15 of the course, NBA Top Shot launched, and we were able to watch it take off from there.”
Binkley’s spring 2021 Management 201 (Managing People and Organizations) course has observed Dapper Labs, the blockchain company behind NBA Top Shot and other NFT brands, throughout the semester as the popularity of NFTs skyrocketed.
“It created a great learning opportunity,” says Binkley. “Looking at a startup grow faster than they expected to gave us a starting point to discuss startup culture, HR challenges, technical decisions, marketing, and more all in real time.”
Looking to future trends
NFTs are just taking off, with many companies still in beta testing and others only just planning to launch. Binkley expects continued growth. Topps, the famous baseball card company, launched their MLB NFT platform on Tuesday and the NFL and UFC have both partnered with Dapper Labs to create theirs.
“Right now the market is really, really hot. NFTs will help the memorabilia markets to grow over the next 10 years or so, but the hotness will eventually wear off,” says Binkley. “With higher volume as more and more NFTs are minted and traded, the rarity of it will go away. As the market becomes saturated, things will slow.”
NFTs are also blurring the line between a hobby and an investment. Many collectors grow their collection as a hobby, with no intention of selling or trading away their prized digital possessions. But with some collections of NBA Top Shot valued in the millions, collectors may have the opportunity to turn a major profit.
“NFT collectors beg the question, ‘Is this a hobby? Or is it an investment?’ It’s a uniquely flexible market because it can do both,” says Binkley.