In the early days of NBA Top Shot, there was no official marketplace. Every transaction was an off-market transaction, requiring collector trust or an escrow.
Now, as there is an established marketplace and new users have flooded to the platform, Top Shot has warned against these same off-market transactions to keep collectors safe. However, Top Shot’s policy does allow off-market transactions for Moments.
Despite this, as more money pours into Top Shot, huge off-market transactions have started to dominate the Top Shot scene and become the norm for large transactions.
The first notable off-market sale was the #3/59 LeBron James From The Top Kobe Tribute Dunk, which was purchased through Heritage Auctions for $387,600. Days later, dingaling purchased 80 Moments from ballerbasket — including 73 #1 serial numbers — for $1,055,000 in an off-market transaction. Then, in early May, dingaling continued to add to his massive collection, buying all of Pranksy’s #1 and jersey match serial numbers for 300 ETH — $1.17 million at the time of the sale.
As off-market Top Shot transactions rise in popularity and publicity for large transactions, let’s examine how off-market transactions come together and Top Shot’s policy on these transactions.
Top Shot’s Off-Market Transactions Dilemma
An off-market transaction is simply a transaction that isn’t processed in the official Top Shot marketplace. These Moments could sell through online auctions — such as Heritage Auctions, which has hosted several Top Shot auctions — or a collector-to-collector transaction with escrows.
Let’s make something clear: off-market transactions for Moments are not against Top Shot’s policy, so long as it does not involve moving Dapper balance from one account to another in any way.
But why purchase off-market in the first place when Top Shot has a functional marketplace? First is to avoid the five percent transaction fee that Dapper takes from every purchase — though the fee is low in comparison to competitors (WAX’s fee is 10 percent). Second is the $250,000 limit on the sale of an individual Moment.
Many well-known members in the Top Shot community, such as top collectors and Top Shot influencers, have made several purchases off-site — sometimes even entire accounts.
Jack Settleman, the founder of Snapback Sports, holds the No. 54 Top Shot account, according to MomentRanks. Since starting on Top Shot in August 2020, many of his transactions have come off-market — including his #34/59 LeBron James From The Top Kobe Tribute dunk — and all have been completed safely.
“The majority of my transactions are off-market transactions,” Settleman said. “This was actually a behavior that was encouraged in the early days of Top Shot; Dapper provided middle-men.”
Part of these transactions even included users trying to sell their entire accounts. Pranksy, or “pranked”, the No. 13 Top Shot collector, was a whale looking to purchase full accounts.
“During one of the early bear markets, many users were trying to offload their accounts because they didn’t like the way Top Shot (and) Dapper was heading,” Settleman said. “Pranksy was buying up a ton of accounts, so it was pretty common to see people put their entire accounts up for sale.”
But there are two sides to the story.
On one side, there are collectors making safe and strategic transactions, which Dapper allows. But on the flip side, certain transactions are made just to transfer Dapper credit from one collector to another, which is strictly prohibited. Additionally, off-site transactions can be risky and also cause headaches and serious slowdowns for withdrawal access when Dapper’s compliance team reviews each account.
Regardless, that hasn’t stopped huge Top Shot purchases from being carried out off-market.
Dingaling’s $1.17 million and $1.05 million Top Shot purchase
With the $1.05 million purchase of 80 Moments and 73 #1 serials from baller_basket, dingaling became the leader in #1 serials. Soon after, the anonymous collector bought more #1 serial numbers from one of the most well-known Top Shot collectors — Pranked, or Pranksy on Twitter.
Dingaling now holds 353 #1 serial numbers out of his total 1,124 Moments. Dingaling has quickly purchased their way into the #6 account on Top Shot.
Thus far, they have collected over a majority of their Moments through off-market transactions and much of their massive #1 collection. Dingaling has now spent over $7 million on Top Shot since joining the platform in May.
The first $1 million Top Shot transaction deal started just as a joke between baller_basket and dingaling before evolving into a record-breaking deal.
“I reached out to [baller_basket] for a few of his Moments, and we were having a laugh comparing who had more #1s at the time,” dingaling said. “He was leading by a mile.”
That didn’t last long. A few days later, dingaling was met with a proposal from baller_basket, and they saw it as a great buying opportunity. Dingaling, who works full-time in cryptocurrency, started digging into the proposal.
“I did a rough (calculation) on each one, and it turned out pretty much in line with what I was expecting,” dingaling said.
Soon, the deal was done, as announced on baller_basket’s Twitter.
Baller_basket had no problem offloading the Moments to dingaling; after the transaction, he’s still in the top 0.1 percent of Top Shot collectors.
“We kept it fairly simple,” baller_basket said. “When you buy enough #1 Moments, you gain an understanding of value for high-end Moments. We negotiated the bulk price for a couple of days.”
While these two are the largest transactions for dingaling, they’ve become used to dealing in off-market transactions, as he’s invested “$6-7 million” in Top Shot Moments. To this point, they haven’t had any issues in his frequent off-market dealings, though they were using an escrow before they became a well-known collector.
All things considered, this was a safe and easy off-market transaction, and both sides came out winners. baller_basket became a millionaire from Moments and still holds a huge Top Shot collection. Meanwhile, dingaling gets to add to his rapidly-growing collection and claim the #1 serial throne.
Dapper’s stance on Off-Market Transactions
Officially, Top Shot has no policy against off-market transactions.
However, Dapper has heard several complaints about off-market transactions and has looked into many unusual circumstances and purchases. One example is a common Fred VanVleet Moment purchased for $140,190, coming in as the fourth-largest on-chain purchase.
Top Shot strictly prohibits the buying, selling, or transferring of Dapper credits from one account to another in any way and has made it clear it is illegal. In the case of the Fred VanVleet account takeover purchase, it directly violated Dapper’s policy.
In Office Hours with Jacob Eisenberg, Top Shot’s Community Lead, he stressed that Top Shot does not motivate nor want collectors to go off-market.
“We’ve seen what’s happened off-market. We don’t incentivize people to go off-market,” Eisenberg said. “It all comes down to buying and selling Dapper balance: that is strictly prohibited, it’s illegal. There’s no other word for it but money laundering.”
In the Office Hours, he also hit on why Top Shot advises that collectors stray away from dealing in off-market transactions.
“When we get into off-market, it becomes really hard for our team to do investigations to determine, ‘Was this a legitimate off-market transaction, or was this buying and selling Dapper credits illegally?’” Eisenberg said.
No matter if you’re buying, selling, or trading off-market, Eisenberg has confirmed that dealing off-market is guaranteed to slow down your withdrawal processing time.
Top Shot is trying to reduce the amount of off-market transactions by increasing the listing price cap for Moments, but that’s still in the works. Even so, where are many reasons collectors may skirt the Top Shot marketplace, as dingaling has shown.
Should you make purchases off-market?
If you’re a collector looking to go off-market for Moments, know that there are plenty of risks involved. If the purchase deals with buying or transferring Dapper balance, it could even potentially get you banned from Top Shot.
If you can’t bid tens of thousands for Moments or have a trustworthy escrow, it’s probably best to stay on Top Shot to purchase Moments. However, extremely lucrative transactions, like some of dingaling’s, can often be safe, as long as you know who you’re trading with and minimize risks with escrows to start.
Here are the main things to remember about off-market transactions on Top Shot:
- Dapper is working on ways to reduce the need for off-market transactions, such as raising the ceiling price for listing Moments (currently $250,000) and the Pack Marketplace (expected to arrive late Summer 2021).
- It’s illegal to buy, sell, or transfer Dapper credits in any way.
- Off-market transactions are very likely to slow your account’s withdrawal access.
- Enormous sales off-market between reputable people are generally safe, though you should always act with an abundance of caution.
We’ll be watching to see how many more off-market transactions come before and after Top Shot raises the listing price ceiling. In the case of transferring Dapper balance, surely this won’t be the last time Dapper is forced to investigate a case like the massive Fred VanVleet purchase.
It’s a tricky situation for Top Shot, which is still in Beta, but something has to be done if they want to reduce suspicious and risky transactions happening off-market.