Sporting Crypto - Nov 15th 2021 - FTX Team up with Kentucky Men's Basketball & The ENS Airdrop that Changes Everything
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Intro Notes, Plugs & Amendments 🔌🔧
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It’s been a quieter week these last 7 days from a Sports x Crypto perspective in isolation, but Crypto itself just doesn’t stop.
At this moment in time, there are multiple announcements on a weekly basis that are large enough to be a quarterly headline in the space 3 years prior.
The things happening right now are going to define the future of how we look at every industry in the world.
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Stories & projects of the week
1) - FTX have teamed up with Kentucky Men’s Basketball in NIL (name, image & likeliness rights) deal-
I don’t profess to be massively into college basketball.
I’m not even as into the NBA as I once was.
But Kentucky are one of the most famous basketballing brands in the world, let alone in US college basketball.
If you don’t know much about The University of Kentucky (UK), they are the most successful NCAA Division I basketball program in history in terms of both all-time wins and win %.
Some of the names that have graduated from UK to hit the big time in the NBA include the likes of Devin Booker ($158m contract), John Wall ($170m contract), Anthony Davis ($190m contract) and Karl Anthony-Towns ($158m contract). If you combine the size of the contracts that the aforementioned names are *currently* under - you reach a staggering number of $676m over the respective years they are under contract.
Why is that number relevant?
Well, simply put it showcases the level of talent that is passing through this institution. And it’s exactly why FTX have taken a position that gives them exposure to the future of some of these players.
FTX’s VP of Business Development said:
“We’re thrilled to work with players from one of the most successful collegiate basketball programs in the country. Outside of the well-deserved financial compensation, we will be assisting in the student athletes’ education of digital assets so that they can make informed investment decisions as they look to enter the space.”
All that being said, College sports in the US are very complicated and quite controversial - especially if you’re not from the US. (I’m really sorry if I get anything wrong here…if you’re American and reading this shaking your head, please email me letting me know!)
The stadiums are huge and the money made is massive. Some college coaches are on salaries that would equal 10-15 professors at the very same university. It’s a massive business. This is a $14bn industry…
So where does the controversy come in?
Men’s college basketball players weren’t legally allowed to be paid or make money from their basketball activities until July 2021. the NCAA, ruled in July 2021 that college athletes will be allowed to profit from their name, image and likeness (NIL), a historic ruling by the 115-year-old institution.
And now, here come FTX.
Let’s break down the partnership:
Each Kentucky Wildcats player will receive monthly stipends, paid out in U.S. dollars via FTX debit cards.
Each can also create their own non-fungible tokens on the FTX NFT platform and can keep most of the revenue on such sales
The athletes, in return, will act as brand ambassadors for FTX.
Essentially, in the last 6 months - we’ve gone from NCAA athletes:
Not making any money (officially)
Making money through NIL deals
Making money through NIL deals with NFTs that will pay them in perpetuity.
That last line is why this interests me.
Historically, you’ll have a lot of really successful college athletes who don’t make it in the big time.
Now, this isn’t to feel sorry for them. They get a free education at a very good school.
But the disparity in income between the college and their athletes is still very anti-egalitarian to the point that it almost seems like college athletes are taken advantage of. NFTs, through this partnership, could allow some of these athletes to make money from their NIL for a long time after they hang up their jerseys.
This is an important moment when it comes to college sports, but also more generally.
We’re so used to, for the most part, being paid for things we do in the here and now. Paid for an hours work, or a piece of work. We’re in a situation now where Crypto and NFTs specifically are allowing people to make money for a long time after their work is ‘done’.
What about FTX?
First and foremost, FTX are a monster right now in the Sports partnership space.
Their portfolio is gargantuan.
They are as real as it gets when it comes to making their mark on the mainstream via Sports.
And if like me, you believe that the next wave of people in Crypto and NFTs is going to come via Sports fans - then you think FTX are making a very good bet.
Crypto Deep Dive: Ethereum Naming Service
On the 3rd of November, seemingly out of nowhere - ENS announced that it was becoming a DAO which would have a governance token called $ENS.
5 days later, it did exactly that.
So what actually is Ethereum Naming Service?
Simply put - this is a service that allows you to buy a name that acts as your wallet address on the Ethereum blockchain.
A regular Eth address might look something like this: 0x89205A3A3b2A69De6Dbf7f01ED13B2108B2c43e7
An ENS claimed address is for example Pet.Eth
It’s like an email address redirect for Web3.
My email might be Petrit.Berisha@hotmail.com, but Pet@hotmail.com feels a lot easier as a redirect.
That’s the same here but instead of the full name to shortened version, it’s the randomised long Ethereum address, to the shortened version.
Last week, ENS airdropped tokens to its users.
Let’s hold up for a second, what does that mean?
An Airdrop is when a protocol or project drops tokens - either governance, NFTs or otherwise - to wallet addresses that have been interacting with them.
In this case, ENS dropped governance tokens to their users.
For some, this was $10k+ dropped into your wallet out of nowhere.
I told a Doctor the other day that I was the head of Crypto at a Sports media company - her reply was: “Isn’t that magical internet monopoly money?”
My response was “That’s exactly what it is”.
Taken from Simon Taylor’s Fintech Brainfood:
Suddenly just for having (and using) a service, people found themselves with 5 to 6 figures worth of tokens from thin air. So what's going on here? Is Crypto bootstrapping adoption with its own stimulus? Is this a new way to pay for internet infrastructure? Or is this just all hype and speculation in a world with far too much of that already?
Is Crypto bootstrapping adoption with its own stimulus? I think so.
These tokens were claimable via your Crypto wallet - and to do so you had to vote on 4 resolutions.
Your tokens are then used to vote on how the project is developed in the future. And the more active you were, the more tokens you were granted.
But why is this such a big deal?
There’s a really big chance that ENS becomes a large, underpinning part of the future world we live in
This is an incredible example of cutting your margin in order to give an ownership stake to your userbase and make them more engaged.
Web2 = login with Facebook or Google. Web3 = log in with your Crypto wallet but don’t steal my data.
If you look past the speculative aspect of Crypto, this mechanism of dropping ownership into the wallet of your customers is going to be something we see a lot of in the next few years.
And ownership is important, but incentive mechanisms are where Web3 winners will be found. Disruption happens at the biggest margins and those that choose to take from their margin & distribute from a revenue & ownership standpoint win.
In Web2 we’ve always traded data for convenience.
I log in with Facebook and they know what I’m doing, where I’m going and who I’m talking to.
Now I’m trading usage & loyalty for governance & ownership.
These Crypto wallets ensure portability cross-platform without creating new siloed identities. I don’t need to use my Facebook account to play a specific game or to create an Instagram account. I have my own wallet which I plug into many apps across this new decentralised layer.
This is sovereignty over my data in a way that makes siloed quick log in solutions look archaic, bleak and actually less practical.
One thing that is being understated in general is that the superpower airdrops have is to reward quality and early adoption over quantity. Hypothetically speaking, if Opensea (the eBay of NFTs) dropped a token right now they’d do so to ~500,000 (unique?) wallets.
Those wallets have driven Volumes and have built this business via minting & trading. The elephant in the room is that Opensea haven’t made things a lot better. And coinbase have 2.5m+ people on their waitlist for their NFT marketplace. Is that the writing on the wall for them, or is it an opportunity to do something that Coinbase would struggle to do?
In the old world:
• Here revolut, here’s another £250m to spend on ads to generate another 1m non-active users
• Here you go customers, a piece of the pie for your engagement and usage of our platform.
In Web2, if you bought 100 URLs from GoDaddy and one of them was in high demand, you made a killing for just being early.
In Web3 you’d have to have bought 100 URLs, used them a lot, then voted on the future development of GoDaddy…then you’d be rewarded adequately with a governance token you could either hold or sell for ETH or other pairings.
That’s what happened with ENS.
To summarise, resource won’t always win:
Authenticity is important, doing things properly pays. The ENS token quadrupled a few days after launching and was soon listed on Binance, one of the biggest Crypto exchanges out there.
Ownership, & distribution of said ownership is more important to users than it ever was and soon any model which doesn’t follow in these footsteps will look broken.
Novel ways to invert broken Web2 models like the URL example given above
I won’t pivot this conversation into Sports, because I’ll leave your imagination to do that for you.
But I will leave you with these three things:
Tokens can be anything, so get creative and really push the boundaries.
If Starbucks airdropped a token that was simply used for engagement and loyalty, what do every other coffee brand do? It’s an interesting thought…
This tweet by Maya hits the nail on the head.
More big stories & things to put on your radar
Football.xyz have launched a DAO to build a better game
Genuino have launched their marketplace
Footium - Web3’s answer to Football Manager is launching shortly
Another huge coup by Socios
Sorare welcome the entire Turkish Super Lig to their platform!
Great reads, great tweeting and more general ‘stuff’
This is an amazing piece by Packy
Coinbase think NFTs could be bigger than their Crypto business…probably nothing?
Marvel team up with Boss Beauties NFT
Is the next wave of Crypto adopters actually Crypto nay sayers?
Here’s one to make you feel good:
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