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  • Sporting Crypto - Oct 4th 2021 - NFL Top Shots & Buying A Sports Franchise as a DAO

Sporting Crypto - Oct 4th 2021 - NFL Top Shots & Buying A Sports Franchise as a DAO

Welcome to the 26 new subscribers to the Sporting Crypto Newsletter who have joined us over the last week! Join 103 people who are interested in exploring where Sports meet Crypto. If you’re reading this and haven’t signed up, what are you waiting for?

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Intro Notes & Plugs 🔌

Another wild week in what seems to be an ever more popular intersection. I’m a bit shocked at just how much is happening out there. I’ve had more conversations about Sports x Crypto in the last month than the previous 12, so I guess there are things bubbling under the surface. Some of these conversations are utterly insane. I find it incredibly cathartic to unpack my brain into written form week on week, even though I’m not the most accomplished writer.

🔌 Early days, but if you're interested in getting ahead of the curve and sponsoring the newsletter - feel free to reach out to me on Twitter or LinkedIn

Stories & projects of the week

The StoryDapper Labs, recently valued at more than $7.5 billion, have agreed a deal with the NFL to create ‘moments’, akin to the incredibly popular basketball equivalent - NBA Top Shots. If you don't know what NBA Top Shots are, simply put - they’re moments in NBA history that you can collect as NFTs. Lebron James’ first dunk, an Allen Iverson crossover - you get the idea.

NBA Top Shots grew 30x in 2021 alone with $780m worth of moments being trade in that period. The highest selling moment to date being a Lebron James Legendary Moment from the 2020 NBA finals, which sold for $230,000.

Now, Dapper labs are working with the NFL to launch to create digital collectibles they hope will reach more than 300 million NFL fans.

ThoughtsNBA Top Shots were a groundbreaking moment in the NFT world more generally. I wouldn’t say this was the NFT mainstream moment, but it’s not far off. That isn’t because of the novelty of the idea, it’s more the demographic that bought the NFTs. This wasn’t Crypto bros and Bitcoin Hodlers buying exclusively - when NBA Top Shots launched, there were digital queues of 10s of thousands of people willing to pay good money for packs which gave them randomised moments. Now the crazy thing is, at that point in time - you weren’t even able to withdraw from the platform. People were ploughing money into something that they couldn’t even withdraw from because the platform in its infancy.

This was true product market fit in the NFT x Sports space which spoke to ‘normies’ more so than Crypto enthusiasts 

People didn’t really care that these were NFTs secured by the Flow blockchain. All they cared about is the possibility of owning one of their favourite NBA memories as a digital collectible. It clicked with 10s of thousands of people simultaneously.

Suddenly Top Shots became a gateway pill for people who had no idea what Crypto even was

And with the NFL, this will no doubt have the same impact.

There will be lots of people out there who buy NFL moments because they simply want them. Because they feel nostaligic when looking at a historic touchdown. Because it speaks to them in the same way a physical collectible does.

We’re talking about a market of $400-500m fans for a Sport which is only really played in one country. The physical sports card market is worth $5-6bn.NBA Top Shots did a quarter of a billion in trade volume in Q1 2021 alone.

You can see where this is going. It’s a massive market that every single Sports franchise and League are looking at. There’s product-market fit, great demand and there's a great opportunity to lift and shift an existing model. The NFL aren’t the most progressive sporting institution so I’m not shocked they haven’t done something a bit more innovative, but these organisations are massive and have a lot of moving pieces. Like the NBA, La Liga, F1 and so on - they’ll start with collectibles and move on to do something more innovative in the future.

That’s part of the excitement for me - large sporting brands are only really scratching the surface. What we’ll see over the next 12-18 months worldwide is going to melt brains.

As I pointed out in the previous newsletter:

“I think I’m just about too young to remember what the dial-up internet sound was like, but that’s basically where we are when it comes to Crypto, NFTs and tokens.”

The StoryQuite a bit to unpack here…

To summarise: 

  • Krause house is a DAO (Decentralised Autonomous Organisation) governed by basketball fans

  • They want to buy an NBA franchise

  • They believe team ownership shouldn’t be limited to a handful of billionaires

  • Their whitepaper states that the DAO would purchase majority rights (50%+) to a franchise

Their whitepaper breaks down 3 potential models:

  1. Majority Decentralised Ownership: The community would have the final say in ownership decisions, team location, approval of exec hires and marketing & events - but not player personnel, contract and coaching decisions.

  2. Minority Decentralised Ownership: Identical to the above but with a minority stake, which means that their say is only partial in the above situations.

  3. Social tokens: This model is where the team will create social tokens for fans to hold. These tokens will likely provide holders with benefits via digital goods (NFTs), special player + event access, and more. We anticipate that big market teams will not extend ownership or revenue sharing (see Royal for what 3LAU is doing in music), whereas small market teams may innovate more here to collect a digital + worldwide fanbase. In this model, it is unlikely fans will have any governance on team operations + strategy.

Essentially, Krause House wants to bring fan ownership to Web3.0, which is cool - but I think there’s work to be done on how this actually plays out in reality.


I’m going to caveat this upfront by saying I’ve never been involved in the running of a sports franchise and my knowledge of US sports franchise governance and operations is limited. I want to also caveat that nothing I say in the following is correct, I’m genuinely just spitballing and would welcome any iterative or contrasting thoughts because I’d really love to formulate some sort of thesis around fan-owned sports groups in Web3.0. That being said, there’s something interesting here.DAOs are a spectrum, just like decentralisation is. This doesn’t need to completely subvert any existing model radically.

But first, we need to take this back to the core question:

What do fans actually want?

Sports fans want to feel like their franchise is doing its best to:

  1. Not rip fans off

  2. Be successful on the court/pitch

  3. Stand for something and foster a good culture 

Now there’s more that fans want, but that list could be as long as this newsletter.

But let’s start to break this down.

I, as an Arsenal Football Club fan, don’t want to deal with the day to day operations of the club.I just want to have an influence on who does and that they’re competent and they care.

That feels like very much number 1 in the Krause House whitepaper. They also state in the paper that it’s ‘unlikely any league would allow a faceless community to purchase a majority stake’. Perhaps, but across the pond in the UK, we have Football clubs owned by shady shell organisations, actual states that have no modernised human rights and oil barons who aren’t allowed to go back to their home countries. Just because a DAO doesn’t have a face to it, doesn’t mean it’s worse than any existing sports franchise owners worldwide.

In Soccer, whilst we’ve seen the worst of absentee owners - there are already some pretty good models. We already see this in Germany with the 50+1 rule which means fans have majority ownership. At the same time, Barcelona is fan-owned and in billions of dollars of debt - so there’s that. We’ve kind of gone beyond the idea that clubs shouldn’t be businesses…so how do we ensure that these businesses have the interests of fans and their surrounding communities at heart?

I think the answer lies somewhere in the number 1 model, with a sprinkling of number 3. Is there a model where Fan tokens give you more influence than picking the colour of the captain’s armband, whilst not giving you direct influence on the operations of the said club? Can you take model 1 and use such a governance structure in the lower leagues of the Soccer pyramid and continuously improve?

I think the first step, beyond all the blue sky thinking - lies within modernising the 50+1 approach to ensure:

  1. More Transparency

  2. Accountability

  3. Globalised governance and support:

  4. More liquidity in the way ownership shares are distributed

  5. Provenance on those digital shares so that bad actors can be blacklisted

  6. A general increase in efficiency

How some of these things work I’m not totally sure and as caveated at the start of this I don't have all the answers. I’ve learnt that in Crypto - ideas are bucketed into:

  1. This looks like a toy…but there’s something beyond this (Crypto kitties)

  2. This is fucking mental, no way this will happen (then boom, it happens 2-3 years down the line)

I think this feels like it’s in bucket 2, and I can guarantee there are thousands of people in sports worldwide who are looking at this problem and trying to solve it.Fans are tired of absentee owners who don’t care about their sports franchises.

They want this part of their lives and local culture back.Who knows, a modernised 50+1 DAO approach could be the answer?

Crypto Deep Dive: Tik Tok to add NFTs and Visa to start settling transactions with Crypto partners on Ethereum…

So after twitter decided they were going to allow people to verify their NFTs, crazy things started to happen.

NFTs are weird because they're everything:

What I mean by that is:

  1. They give you the ability to own digital assets and unlock frozen internet objects that were completely valueless and illiquid beforehand

  2. They completely subvert models where enjoyment is the only benefit you receive for your time (play to earn gaming)

  3. They’re digital social status, and because we’re now digital-first as humans - they are social status.

  4. They’re a new form of social media

And there’s much more.With Ethereum more broadly it’s fast becoming apparent that there’s a good chance it becomes the settlment layer for Web3.0 - and Web2.0 natives use it as a bridge between the two. And this isn’t to discount any other smart contract based blockchains - we will likely end up in a situation like we do with cloud services where there are 4-5 key players who have a lion’s share of the market.

Let’s begin with the Visa announcement…this is a big deal.

The ambitious project is centred around creating a universal hub to exchange stablecoins and central bank digital currencies (CBDCs). VISA are getting ahead of the game when it comes to CBDCs especially, as they start to slowly rollout over the next few years.

Tik Tok are following Twitter becoming the latest social media platform to get in on the act when it comes to NFTs…

This will give fans the chance to own a culutrally-signficant moment on TikTok. Probably quite similar to Top Shots.So why are these two things fairly significant? What relevance do they have to Sports?

First of all and similarly to last week, these are very significant events when it comes to this new world. Because it’s some of the biggest players in our current world, understanding how imporant Crypto is.From VISA’s perspective it’s about the actual way our financial systems operate, from Tik Tok’s, it’s leveraging it’s influence on internet culture. Tik Tok has 1 billion monthly active users. VISA are one of the two payment rail giants in the payments space. This isn’t a side thing anymore…Crypto is coming. (Crypto is arguably here?)

As some of the world’s biggest brand look at this space, it’s really important not to rush.From a Sporting perspective - clubs, leagues and brand partners need to take their time. This isn’t a FAD and isn’t going away and we’re still incredibly early. Think about it a lot. Talk to people about it a lot. Get your teams internally educated.

And when you do go to market with something, ensure it’s not a cash grab. Be authentic. The long term value add for your brand here is 100x the short term. And this isn’t a message strictly to larger brands looking to dip their toes in this space.

Smaller brands with smaller revenues need to realise that the reality of this opportunity is that work in this space could dwarf their current revenues 10x - 100x.

More big stories & things to put on your radar

  • Packers running back Aaron Jones signed a long term deal with FTX. He takes an equity stake in the company and is being paid in Crypto.

  • Gareth Bale launches his first NFT collection with Crypto.com

  • SportsIcon partner with Flow to create their own platform

Great reads and great tweeting

  • The thread GOAT Chris Dixon is at it again

  • Blockchain gaming is massive. Blockchain gaming is going to become even massiver.

  • We’re still so damn early…great thread by Punk6529 culminating with this great graphic.

  • Crypto might just have a massive Q4…things are bubbling


Thanks for reading my first ever Sporting Crypto newsletter! If you enjoyed it, please tell your friends who might be interested - and share it on social :)