Since NBA Top Shot opened to the public in October 2020, the NFT platform has brought hundreds of thousands of fans a revolutionizing way to connect with the league and show their fandom. But their rapid growth hasn’t come without some bumps in the road that have concerned many collectors.
Top Shot’s taken its fair share of criticism in its early existence, but it’s understandable considering the unprecedented growth they’ve seen since January. When the market was at its peak in February and March, the primary concern was the lack of collectors that could withdraw, and warnings that you’d never be able to get your money out. As of June 11, over 286,000 collectors can now withdraw — a huge step forward.
Withdrawal improvements are a testament to how quickly Top Shot can solve issues when they prioritize them. But Top Shot has new pressing dilemmas to attend to, and its important they’re solved in the second half of 2021.
Today, three daunting problems are facing Top Shot head-on, which could be a detriment for new collectors coming to the product; these three are
- market volatility.
- oversaturation of Moments, especially on star players.
- Moment quality.
Though NBA Top Shot has made incredible strides in recent months to improve the collector experience, including implementing a brand new Collector Score and bonuses, there are still big ways for Top Shot to improve going forward.
1. Market Volatility
When I joined Top Shot in mid-January, the marketplace was steadily growing, and it was a stable market where buying and selling was comfortable. Moments would go up and down, but not dramatically. Limited Moments were on the marketplace at the time — maxing out at 7,500 mint count, then later 15,000 — and with limited collectors, plenty of Moments were underpriced.
Within no time, more collectors rushed to the site eager to buy Moments and stockpile their collections. With the limited Moments on the marketplace, prices soared to all-time highs.
About a month after I joined, on February 22, Top Shot recorded almost $46 million in sales in a single day. It was a tremendous feat for any market, let alone an NFT. But then, it quickly went downhill.
Only two weeks after recording $46 million in sales in a day, on March 7, Top Shot dipped under $1 million in a day. Prices dropped tremendously in a few days; sellers outweighed buyers every day, and people constantly undercut each other looking to take their money and run.
Before the Playoffs packs, Top Shot was averaging just over $1 million in sales a day, numbers lower than even late January, despite massive user growth since then. Moment prices have dropped across the board, with thousands of accounts losing expected value in the process.
The market has been volatile, to say the least.
When people lose money this quickly, it’s a frightening message to incoming collectors. For collectors to feel comfortable buying and selling on the market, it needs to have more stability.
Top Shot is Working to Improve its Economy
However, Dapper Labs CEO Roham Gharegozelou has emphasized that “economic fixes” are the priority for the next two months.
To help, Top Shot has hired an economist that will work with the rest of the Top Shot team to make sound decisions to stabilize the Top Shot market. Some of that stabilization has come with the NBA Playoffs, but it’s hard to know if it’s here to stay.
However, with more Moments circulating on the marketplace at a rate that has outpaced demand, a new problem has arisen.
2. Oversaturation of Moments
Every Moment has a circulating count, and the increase we’ve seen from Series 1 to Series 2 has been astronomical. No Moment in Series 1 had a count over 3,999, compared to today, where certain Moments are circulating with 40,000 minted and not yet limited edition.
In Series 1, under 1.5 million Moments were minted compared to the over 15 million currently circulating in Series 2.
Series 2 has created an influx of Moments, and as more are minted, the existing Moments from that player becomes less scarce. As scarcity is a driver for value, the influx in new mints has created downward pressure for these Moment prices.
Many players have over Moments from Series 2: Giannis Antetekounmpo has 11, Steph Curry 10, LeBron James has 10 with an MGLE reward on the way, and almost all All-Stars have at least five. However, in Top Shot’s recent blog, they announced they plan to limit the number of Moments per player in every Series from now on and release this info ahead of time.
Ultimately, Top Shot may be trying to reduce the number of Moments on the marketplace in the future.
With more users, higher mint and Moment count is comprehensible. But the change from Series 1 to Series 2 has been substantial, and supply still seems to outweigh demand outside of Legendary Moments.
Oversaturation of Moments leads to -EV packs
With more Moments now in packs at a higher circulating count, packs are no longer guaranteed to profit. For months, there would be no question you would make a net gain from packs and no one would skip a drop. Now, it’s a gamble on most packs, which may be healthier for Top Shot as a product, but may make onboarding new users a steeper hill to climb.
Just look at the rare Series 2 Throwdowns packs, which left a sour taste in collectors’ mouths. Rare packs have always been in high demand, but when Top Shot sold out rare packs for $149, nearly every collector who bought one lost money.
Top Shot rectified this for some collectors, recently offering $24 Premium Packs for those who qualified for the drop — a huge win for anyone who scored a pack. They also included Throwdowns in their first-ever Rare Showcase Quest, but the fact remains that there volume of Throwdowns far outweighed the demand before the Showcase inflation for the set.
With so many Moments circulating, there are a lot of undesired Moments that collectors aren’t interested in buying. And with these undesired Moments, they end up getting dumped for cheap on the marketplace.
But this poses the question, why are there so many undesirable Moments on Top Shot?
3. Moment Quality
NBA Top Shot was made to be a digital collectible for NBA highlights — or Moments. Not just any highlights, but in Top Shot’s words, “basketball’s greatest moments.” For some Moments, this is far from the truth.
First off, Moment rarities aren’t reflected in the highlights. What makes this Tobias Harris eurostep layup Moment Rare, compared to his Common game-winner, which is an objectively much more impressive Moment? What makes Malcolm Brogdon’s Rare assist so rare, compared to this Common three — which is a more notable play?
There is no clear-cut definition that separates what a Common, Rare, and Legendary Moment is right now. Often, the highlights used in Common Moments are far superior or memorable to Rares.
There are plenty of undesirable Moments because some Moments have no business being Moments at all. There is nothing “great” about several Moments, regardless of tier, which results in virtually no one caring to own them.
Like, why is this standard Hassan Whiteside block a Moment? Is this Daniel Theis dunk really worth commemorating? What is so special about this spot-up Jimmy Butler jumper?
And how about some of the Rare Moment selections? There’s this Series 2 MGLE of an uncontested layup from Lonnie Walker IV, with a thumbnail of him shooting a jumper. This uneventful floater from Lou Williams that wouldn’t sniff a nightly Top 10. Or this standard step-back jumper from Kemba Walker.
These are really the Moments that we’re defining as Rare?
Could Top Shot be Improving Moment Selection?
The point is, there needs to be definable parameters for what makes each tier. There is an endless library of amazing NBA highlights to choose from every season. Many of them have already become Moments — and Top Shot has picked plenty of amazing Moments.
But if we’re going to be oversaturated with Moments, why choose boring ones at all?
In Office Hours, there has been mention that Top Shot is considering a fan panel to help select Moments. And Top Shot announced for next season they’ll have a full content roadmap for Series 3, admitting they need to be more transparent with collectors about Moment selection and how many Moments a player will have.
Watch Top Shot Community Lead Jacob Eisenberg talk about Moment selection on the recent MomentRanks Shot Talkin’ stream.
We don’t need to force Moments; there’s no need to flood the market with something unnecessary when the NBA is a nightly highlight machine. But I do believe they’ve realized their mistakes, and that’s the first step toward improving the highlights used and making them feel special.
When considering if a play should be a Moment, Top Shot should just go back and look at their own wording: “basketball’s greatest moments.”
Improvements are Coming to NBA Top Shot
Every product growing as quickly as Top Shot will undoubtedly have its growing pains, and considering the short amount of time the platform has grown, Dapper Labs has been working mad behind the scenes to keep up.
But with that said, these three problems are pressing; not only for Top Shot as a product but for collectors and their accounts, too. If Top Shot wants to draw in and retain new users, these problems are critical to address before a new wave of marketing kicks on.