Crypto

Sports NFTs Are No Slam Dunk

The list of pro athletes getting paid in crypto is growing—Landon Cassill will become the first Nascar driver to be compensated entirely in digital currency as part of a sponsorship deal. He is getting a portfolio of assets that include litecoin and bitcoin. 

But even as more sports figures and franchises are jumping on the crypto bandwagon, the enthusiasm for sports-themed non-fungible tokens, which are blockchain-based digital assets, seems to be fading.

Dapper Labs’ NBA Top Shot, which produces NFTs of players’ video highlights and was a key force in bringing NFTs to the attention of the general public, has seen sales decline 80% to $41 million between March and May, according to data from Crypto Slam. It could be that concerns about NFTs’ environmental implications, authenticity and security are catching up with the market. Or maybe people are finally realizing that they are essentially just really expensive URLs. 

The reaction to NBA player LaMelo Ball’s NFTs isn’t exactly a strong sign of life. Though the Charlotte Hornets point guard released the collection almost two weeks ago, only the cheapest NFT, which is priced at 0.01 ETH or about $23, has sold out. The most expensive collectible, which costs 2.6 ETH or about $6,000, has moved only 77 out of 500 units. 

Ball is also auctioning off a first edition of his “Gold Evolve NFT” tonight. The “Evolve” in the title refers to the fact that the NFT, which features a rotating gold statue of Ball, was updated with an image of the sun after Ball was named NBA Rookie of the Year on Wednesday. 

If the NFT fetches a fat price, it could renew buzz about the broader market. But it’s worth noting that it isn’t just a digital collectible that people are bidding on. The Gold Evolve comes with tangible memorabilia that may be the real reason why buyers are interested. The auction winner will get signed shoes worn by Ball during a historic game as well as an autographed jersey. 

On the other hand, a lack of interest or a lower-than-expected sale price could cement the idea that sports NFTs might be an air ball instead of a slam dunk. 

Fall of a Titan

The crypto world was feeling a bit gobsmacked by the sudden collapse of the titan cryptocurrency, as people tweeted about being scammed and questioned how the episode would affect the reputation of decentralized finance.

Even the people behind Iron Finance, which operates the decentralized finance protocol the now nearly worthless token belongs to, labeled the collapse the “world’s first large-scale crypto bank run.” Iron Finance attributed the collapse to the fact that its stablecoin was only partly collateralized. 

Crypto bull Mark Cuban said he had been a titan investor, and called for higher powers to step in. “There should be regulation to define what a stable coin is and what collateralization is acceptable,” he told Bloomberg. He didn’t disclose how much money he lost, only that it wasn’t big enough for him to “dot every I and cross every T.” 

The events raise questions about the stability and longevity of decentralized finance protocols, as well as what it implies about crypto volatility. Though the “bank run” is over, it is likely to remain a vivid example of what can befall investors in this volatile arena.

DEALS

WHAT WE’RE READING

  • Stablecoin Lode of $100 Billion Stirs U.S. Worry Over Hidden Danger (Bloomberg)
  • National Republican Congressional Committee to Accept Crypto Donations (Axios)

Thank you for reading the Crypto Global newsletter. I’d love your feedback, ideas and tips: hannah@theinformation.com


Hannah Miller writes The Information's cryptocurrency newsletter. She previously worked for the Financial Times, CNBC and CNN. Her reporting has examined growing interest in crypto among institutional investors and the potential uses for blockchain within financial services. She has also worked in breaking news, podcasting and digital video. Based in New York, Hannah graduated from the Craig Newmark Graduate School of Journalism at CUNY. She can be reached at hannah@theinformation.com or followed on Twitter @hgmiller29.