• about
  • services
  • content
Hiral Patel, December 31 2021

The Rise of the NFT

Welcome to the Simulation

NBA TopShot

When we look back at the year that was 2021, it is impossible to ignore the impact of COVID-19, a pandemic that continues to impact lives across the world. Whether in the world of sports, fashion, music, or beyond – there is nothing more important than health. As a result, 2021 continued to require sports leagues to get creative with digital engagement. As arenas, fields, and stadiums were closed or reduced to a lower capacity, fans were unable to engage with their favourite teams and players in the same way they were used to.

With the birth of the blockchain and the introduction of the Metaverse, there is a lot of speculation on how far technology will shift our future. For the world of sports, one of the bridges between the real world and the virtual world has been the usage of the NFT.

The NFT, also known as a Non-Fungible Token is a digital collectible that is verified and certified by a network of computers known as a blockchain. For a more technical breakdown of the concept of an NFT, here’s a handy starting point written by yours truly. Many athletes and leagues began to venture in the space throughout the year, including athletes who auctioned them off for charity, all the way to NBA Top Shot, a league-backed digital trading platform that brings basketball cards to life.

In all, over $1 billion in sports NFTs transactions were completed, with some NBA Top Shot moments selling for over $200 000. There is clearly a market of sports fans who want to expand their collection beyond physical trading cards and memorabilia, and NFTs have tapped into that market. It has given leagues, teams, and players an opportunity to create a new revenue stream. But the question that was asked all year long, and is still being asked as the year comes to an end by many is – what is the value in a digital collectible? You cannot touch or feel it in real life like you would a puck, ball, or trading card. The funniest chirp I continue to see online is “why can’t I just save a picture on my phone instead?” – and the answer will always be the value-added of the NFT. Whether it is ownership of an asset that is recognized by the sporting entity and the audience, or additional value that comes with holding the NFT, the value will look different and feel different for all collectors. And between us, most critics of NFTs were once critics of trading cards and future critics of new sporting products that connect fans to sports.

2021 was also a big year for white whale mktg, as the team made a huge splash in the middle of 2021 with the official launch of our NFTs. We dive into the story behind our NFTs in this week’s wwm pod episode – a project that was birthed and completed in just over a week after Niko Giantsopoulos asked Chris if we can try it out. We not only minted 3 NFTs (one for Niko, one for Ben Fisk, and one for Micah Awe), but also helped Niko, Ben, and Micah become some of the first athletes in their respective leagues to have their own NFT minted and launched. Behind these NFTs also came additional value for the holder, including meet-and-greets and player merchandise from the white whale mktg collection.

Listeners of the wwm pod will also hear about how we got to the 1-yard line, and took a timeout with the NFTs due to their “gas prices”, the cost to list on the blockchain, which is a volatile charge that the buyer and seller may have to pay. This leads me to the most important (and maybe more underrated) part of the NFT trend of 2021 – the cost.

Not only is there a financial cost that comes with owning NFTs, but the environmental impact of the blockchain is easy to overlook. With a network powered by computers that are constantly operating at high capacity, the electricity required to keep these machines running has a strong carbon footprint (as does any electronic that runs at high capacity). When interacting with digital products in the virtual world, it is easy to turn a blind eye to the physical impacts on the real world – how our devices are produced, how we produce energy to keep operating, and what consequences it has to the future to our environment and climate. The Seattle Kraken, who recently launched their own NFT collection, received a lot of criticism for this venture, which critics say is contrary to their pro-climate and sustainable leadership brand.

When looking back at the trends in sports, it is equally important to focus on the positives and the negatives. It is evident that there is a lot of excitement around NFTs, and the potential that exists for fans to connect with their favourite sport, league, team, and player. However, the consequences are equally as uncertain, and can also grow exponentially. As I mentioned at the beginning of this piece, there is nothing more important than health. 2021 not only did justice to that statement from a personal health level but continued to remind us that the health of the environment and the world around us cannot be underestimated.

Published: December 31, 2021 - Issue 20 of The Sport Marketeer

Written by

Hiral Patel

Tags

Previous The Year of the Athlete
Next North America Conquering Europe