Former NBA star Dwight Howard's disastrous NFT & Token Launch

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Introduction 🔌🔧

Welcome back to Sporting Crypto!

In a week where tech headlines are fully focused on Apple’s launch of Vision Pro, it was tempting to follow suit and dig into how this might impact Web3 and Sports. But, that felt like something more worthy of a report or essay, so we’ll leave it for another edition.

On Sporting Crypto, we tend to cover celebrity crypto projects with less frequency because there are very few that we can learn from as an industry, whether they’re negative or positive.

Today’s edition, however, covers what I think might be the worst celebrity crypto projects I’ve ever seen — and it just so happens to come from a former NBA star.

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Most high-profile celebrities have dabbled in Web3, whether it be investing in businesses, promoting them or creating their own projects using their IP.

These have had varying degrees of success, but have largely disappointed.

We’ve seen everything from former Chelsea and England star John Terry infringing on English Premier League intellectual property with his own NFT project, to Steph Curry successfully launching commemorative NFTs when he broke the NBA 3-point record.

When celebrities make mistakes in this space, it’s usually a trade-off between due diligence and money. But sometimes, there are misunderstandings or small mistakes that have big consequences. Sometimes there’s complete confusion about what Web3 is and who the community and audience are.

Former NBA star Dwight Howard made every mistake in the book, and then some, with his launch of Ballers — an NFT project that later morphed into a crypto meme token.

Discussed in this newsletter:

🏀 The BALLERS NFT project🗣️ The Launch of the BALLERS token🧠Concluding Thoughts and Analysis

🏀 The BALLERS NFT projectOn the 18th of January 2024, Dwight Howard announced his NFT project called 'Ballers' via a post on X (formerly known as Twitter).

They were priced at ~$60 and produced on created on the Avalanche blockchain, sold in their native token $AVAX.

Initially, the NFT project intended to sell 3000 of the NFTs but lowered the supply to 1500 when the project realised there was little traction. There were only ~450 of the NFTs sold, roughly netting the creators of the project $30,000.

On the BALLERS roadmap, the team behind the project intended to launch a fungible token called $BALL. The use case of which was not outlined, and had many in the crypto community calling it a ‘memecoin’. A memecoin is a coin created out of thin air that has no preconceived value or particular utility. The best example of this is Dogecoin. They’re not my cup of tea, but this is a pretty good thread on why people are interested in them.

I know it’s crazy, but I guess this is what happens in an open-source, decentralised world. There’s the wonderful, the whacky and the weird. Instead of calling a close to their project and refunding the original NFT buyers, Dwight’s team decided to seemingly bring forward their launch of the BALL token.

It was launched, and the creators of the token dumped their holdings on buyers. It went as disastrously, if not more disastrously, than the original NFT sale.

👨‍💻 The Smart Contract had some red flags… 

A smart contract is a contract that deploys an application, or in this case a token, onto a blockchain.

And because it’s on a blockchain, everyone can see it.

The smart contract that the BALL token used was copied and pasted from another crypto developer. This is not unheard of in crypto, where contracts are transparent on a chain, and most development is open source. But in this case, the actual functions were also copied and there was no anti-sniping/bot functionality either.

Essentially, this was the equivalent of launching a website with a standard Squarespace template, then not changing any of the pre-written text, and having little to no security implementations. ▶️ The BALL token was launched… Five minutes after the token was launched, the creators added liquidity on the ‘other side’ of the BALL token, creating a trading pair. Essentially the team put up 80% of the supply of tokens, and put up ~$3000 worth of AVAX on the other side, to stimulate some trading.

Soon enough, after some activity, Dwight and the team started selling the rest of the supply of the token, netting about $40k in sales and driving the token to oblivion.

~500 or so wallets were the victims, as the money was transferred to 2-3 wallets, presumably connected to or running the project.

A lot of charts in crypto look like this… but not many are directly associated with an 8 time NBA All Star.

After the project was drained, the team behind it deleted the OpenSea profile that the NFTs were hosted on, and so was the BALLERS X account.

And it didn’t end there, the team behind the project were plotting more token launches. They didn’t know when to quit. Avalanche, the blockchain the project was built on came out and distanced themselves from the project: 

[Credit to Jake Cvengros and team for addressing this head-on!]🧠Concluding Thoughts and AnalysisIt's 2024.

That doesn’t mean that the cash-grab projects we saw from the sports and entertainment industry in 2020-2022 were okay, but it is worse now because you would expect celebrities and their entourages to have learned from that era.

Not only that, but the law is biting hard when it comes to celebrity endorsements, globally.

Broadly speaking, athletes need to protect themselves from those around them who want to leverage their name and image. Dwight Howard, of course, must bear responsibility as well. He is worth more than $100m (reportedly) and the money made here is a drop in the ocean. Compare that to the reputational damage, it’s hard to square the thinking here.

This was a brazen attempt to take money from unbeknown people who followed him and crypto traders.

The optics around crypto will not improve if things like this continue to happen. There has to be a collective responsibility from the Web3 space to ‘socially’ outlaw things like this, and for regulators to tighten their grip on things that are (allegedly) fraudulent and deceiving of consumers.

I’ve been sceptical about most things I’ve seen which is Athlete direct-to-fan from a crypto perspective, but this was just an example of sheer incompetence mixed with bad intentions.

In Episode 2 of the Sporting Crypto Podcast — Sillytuna said “Crypto has to stop being the underground illegal party in the basement”. That was in August 2023, and although we’ve seen some semblance of maturity (Bitcoin ETFs and legislation globally) there still seems like there is a long way to go.

💡 Sporting Crypto Spotlight - Ep. 13 of the Podcast!

In Ep. 13 of the Podcast I was lucky enough to speak to Solo Ceesay, Co-Founder and CEO of Calaxy to discuss Web3 Fan Engagement for the Future

Watch the episode on YouTube!

Or your podcast player of choice… if you’d prefer not to see our faces!

🍎 Find us on Apple Podcasts here [Link]

✅ Find us on Spotify here [Link]

More Sports & Web3 Stories

• I featured on FanZon3 which you can watch here

• EA CEO shares his thoughts on a sports metaverse (Read more here)

• Super Bowl won’t feature crypto ads in 2024 (Read more here)

• Zondacrypto Becomes Official Crypto Exchange of Italian Football Giant Juventus (Read more here)

• GameOn Receives $GAME Grant From Sportsology for Platform Integration (Read more here)

• Web3 Football Manager Game Footium has transitioned to Ethereum Layer 2 Arbitrum (Read more here) 

General ‘Stuff’ that Could Impact You

• Decentralised Social Network ​​Farcaster sees 400% increase in daily active users amid ‘frames’ frenzy (Read more here)

• Chris Dixon has launched ‘Read Write Own Building the Next Era of the Internet’, the much-anticipated book exploring how Blockchains will reshape the Next Era of the Internet (Read more here)

• Polygon Labs cuts 19% of staff in effort toward ‘enhanced performance’ (Read more here)

• Ripple is hacked for $112.5m (Read more here)

• PGA Tour launches Apple Vision Pro app (Read more here)

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