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Sporting Crypto - Feb 28th 2022: Is There Product Market Fit for Athlete NFTs?
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Intro Notes, Plugs & Amendments 🔌🔧
Once again, thanks so much for 1000 subscribers. For a newsletter that only started in September, it’s pretty incredible how far this thing has come in such a short space of time. That joy was short-lived, due to what we’re seeing happen in the world right now.
I say this as someone who has very little knowledge of public affairs and is generally uninterested in politics; it’s been a numbing week that really does make you question the trivial nature of everything but your health and loved ones. Writing a newsletter about sports & crypto, all of a sudden doesn’t really feel like it matters that much.
This might be slightly personal, but for those of you who don’t know me well - my parents are from Kosovo, formerly part of Yugoslavia. I was born in London and have lived here my whole life. But it was pretty much dumb luck.
My parents were both travelling in London for leisure at a time when things back home got so unstable, they were unable to return. Imagine going on holiday for 2-3 weeks, and never going back home. Essentially, that’s what both my parents went through.
They were lucky, however, to not have witnessed and experienced what their parents did. Escaping their homes that were soon to be burnt to the ground or bombed, and fleeing to any country that would take them.
So when I see what’s happening in Ukraine, it doesn’t bring back bad memories for me personally because I was too young to remember the Yugoslav conflict, but it does make me feel numb. It’s chilling, that’s the only way I can describe it.
For me, it feels close to home in more ways than one and I hope to see it end in a way that prevents as much loss of life as possible, as soon as possible.
Thoughts and prayers to everyone involved in this conflict, and more broadly, conflicts worldwide.
🚨🔌 Today’s Sporting Crypto is brought to you by FlipFam! 🔌🚨
Before we get into things, this is the first edition of Sporting Crypto brought to you by the FlipFam app! Users play prediction games in a Tinder-like swiping fashion where the best performers win NFTs! It's free to play and you can win some pretty cool NFTs by some awesome designers.
For sports brands, this presents an opportunity to engage fans in a non-financialised way. There's no need to buy NFTs or a token and there's nothing to trade unless winners of these NFTs want to try and sell them on a secondary market. This is a lightweight way to introduce your audience to web3.
They're launching soon and are run by a great group of people. Check them out in the link below! Hopefully, they are the first in a new wave of sports crypto projects that actually try and engage fans in a novel and new way.
🔌 The Floorcast hit 1000 followers 7 weeks in, which is great to see!
This week’s deep dive…is there product-market fit for athletes creating NFTs?
There’s no one story that I’d like to concentrate this entire section on.
The question I’d like to discuss and dissect in this deep dive is:
Is there product market fit for athlete NFTs?
The answer, in short, I think is no. And I’ll explain why in long form.
The wider context of NFTs.
The biggest sceptic of NFTs will call them a scam or pyramid scheme.
The biggest believer in this new medium of media and much more is that they will change the way humans interact with the internet.
I fall into the latter camp, holistically, with reservations about industry specific NFTs and just how open this world will be. The chances are, however, that I’ll be proven wrong even about these specific reservations - because the amount of capital and talent in the crypto space is fast becoming unrivalled, especially on the talent front.
NFTs have disrupted things
It’s very fair to say that NFTs have so far disrupted art in an incredible way.
NFTs have allowed artists to create work that is distributed through their own channels in the digital realm, rather than a gallery.
It has allowed them to be discovered globally, and not locally.
It has allowed them to gain royalties in perpetuity on their work.
These are things that either weren’t happening or were difficult to do before NFTs.
Simply put, they’ve changed the game for many artists. And it has disrupted the art industry.
There’s a product market fit here on the creator and consumer sides.
In gaming, we’ve seen Axie Infinity just pass $4bn in sales and there’s a boatload of AAA games being built in the background as I write this, with their own native token and their own tokenomics.
It’s a certainty that this space will be disrupted by NFTs, and many would argue it already has been.
There’s a product market fit here on the creator and consumer sides.
There are other industries and areas of the world that are being heavily disrupted by NFTs, and sports are no different. NBA Topshot and Sorare are two of the shining lights in this space, but when you mix sports franchises, agents, players and all the rights that are involved - this is an area that is much more difficult to have product-market fit in.
To summarise so far:
NFTs have changed the game for many creators across a lot of industries
There’s product market fit for artists, game devs & players and musicians
Sports has seen that at a more general level with Top Shot & Sorare, but not individually with athletes
Now that we have that context, let’s discuss whether athletes themselves can be interchangeable for creators/musicians/game designers/artists in the above scenarios.
The answer is ‘most likely no’, but let’s get into that.
Most athletes who could create a successful NFT project already make a lot of money.
In fact, if we look more broadly, most celebrities who have tried their hand at NFT projects have done so with very little success other than Gary Vee and a handful of others.
So when they have done them, they’ve done them horrifically.
The reason I’m trying to answer this question is because a friend of mine asked “why would an athlete want to do this?” referring to NFTs.
The answer is either money or they want to truly create some form of never before seen engagement with their fans. A lot of athletes, don’t care about the latter. Athletes, mostly, have short windows of opportunities to make a lot of money - compared to a normal career - unless they're exceptional. So it makes sense.
Earlier I wrote that most celebrities have done NFTs in a bad way.
Sports stars? Somehow - even worse.
Let’s start with a recent example. De’Aaron Fox, guard at the Sacramento Kings, launched an NFT project called ‘Swipa the Fox’ - that is currently trading at a floor price of 0.009 Eth. Let’s call it zero to make it easier.
In the crypto space, there’s something called a ‘rug’. That’s when a creator basically runs away with the money used to buy NFTs from a project.
Amazingly De’Aaron Fox has seemingly done this to the buyers of his NFTs.
De’Aaron fox by the way, signed a $163 million contract recently in November 2020.
Fox, and/or the team around this, have allegedly taken in about $1.5m worth of ETH and the project has been closed…
How did this actually happen though?
According to this Reddit post, it’s as bad as you can imagine.
Just after a month from release, the project deleted all social media accounts and most of its Discord that had 100,000 people in it.
Fox has since come out with a thread on Twitter addressing the situation
De’Aron Fox is a big deal in the NBA.
He’s probably regarded as one of the best young players in the NBA.
This is the footballing equivalent of Phil Foden ‘rugging’ $1.5m worth of NFTs that his fans have bought.
It’s not a good look.
And now what has happened here might not have been Fox’s fault. There’s likely some shady intermediary here that has made this all happen, made a lot of money from it, and never had to publicly face anyone. That would likely be too embarrassing to admit, though.
This isn’t the first instance in which a basketballer has rugged their community, however.
John Wall, another very high profile NBA star, created his own NFT project called ‘baby ballers’.
The big issue?
Wall, or the team behind this, stole the artwork from Fortnite…
Safe to say, not only were his fans unhappy, neither were the NFT crowd
Baby Ballers was another rug.
They’re currently not trading at all. The project was launched with the intention to donate some of the money to charitable causes, give NFT holders access to money can’t buy giveaways such as signed jerseys, giveaways etc.
The team and money disappeared.
Another rug by another NBA star.
On the other side of the pond, we’ve seen several footballers try and use their image to make money from NFTs. Manchester United’s Luke Shaw launched an NFT project which featured, well, Luke Shaw. There’s been 0 volume traded on his NFTs on the secondary market.
More recently, Zlatan Ibrahimovic tweeted ‘NFZ’ with a portrait of himself.
Don’t know where this one will go, but let’s hope it’s not as bad as Luke Shaw’s. (Is it bad that I kinda love the artwork lol?)
So to summarise once more:
NFTs are a gamechanger for content creators, artists, musicians and will have even more awesome use cases in the future that we can’t even comprehend right now
Celebrities are bad at launching NFTs
Sports stars seem to be even worse than your average celebrity when it comes to dropping NFT projects
Athletes are being approached left right and centre to create NFT projects.
They’d be wise to steer clear of them, for now, because most of the approaches and advice will be awful. And the people approaching them are only looking for one thing - easy money.
Because there simply isn’t yet a good product market fit for athlete created NFTs.
NFTs are about digital ownership, community, digital identity and so much more.
Athletes don’t understand that. They don’t understand this world. With that alone, it’s very difficult to envisage one doing an NFT drop successfully.
Luke Shaw dropping an NFT of his picture with a signature on it, is a far cry from former MLB player Micah Johnson, who’s creating an NFT project called ‘Aku Dreams’ - because a young boy asked him whether Astronauts can be black.
He’s an artist that has been making art since 2015, focusing on it fully when he retired from professional baseball.
This is someone who gets it.
Most athletes don’t.
That’s a generalisation, and there will be exceptions.
But one thing is clear - athletes who drop NFTs - you better hope they're exceptional.
Otherwise, as we say in the industry, they’re NGMI (not going to make it).
More big sports crypto stories & things to put on your radar
Adidas continue their Metaverse march in a pretty impressive way
The BuyTheBroncos DAO are trying to acquire the Denver Broncos…the thing is, they’ll need to raise $4bn & the NFL wouldn’t allow it.
According to Nielsen’s latest report - Crypto x sports sponsorships are to hit $5bn by 2026. I think it’ll be a lot sooner than that, to be honest.#
D.C. United Announce First-of-its-Kind Partnership with “Leading Blockchain XDC Network to Create One of the Most Engaging Fan Experiences in Professional Sports”
VBA game - a new web3 basketball, web3 game built on Solana.
Dream11 have 100m fantasy users…watch this space.
Great reads, great tweeting and more general ‘stuff’
Simon Taylor’s Fintech Brain Food gets better and better every week. Are stablecoins an answer to a few messy jigsaw pieces in the global payments system?
It’s a scam. It’s a pyramid scheme. Please, those of you who think that, tell that to the people who are being fed, sheltered and protected by the resources donated here.
The other side of this is that people are political and tribal, technology isn’t.
Misconceptions about NFTs need to stop
There’s no experts in a space that is 5 years old
Massive if true…
Is Crypto in a bear market…?
Axie Infinity passes $4bn in all time sales. That’s pretty insane even if the price of their native token and in game assets have fallen dramatically in the past few months.
If you’re a brand or company trying to build in this space, come back to this tweet whenever you’re at the concept stage.
Thanks for reading the latest edition of the Sporting Crypto newsletter. I’m really happy to see so many people enjoying it and sharing it with their networks. If you enjoyed this, please tell your friends who might be interested - and share it on social :)