What are NFTs?
A Non Fungible Token (NFT) is a unique asset on a blockchain network. NFTs are non-fungible as they are unique and are not interchangeable, unlike cryptocurrencies where each unit of a given coin is the same as the next (e.g. one bitcoin is the same as another bitcoin). Given the unique property, NFTs tend to be rare digital items like music, images, videos, trading cards virtual lands, and so on.
The saga of Non Fungible Tokens started off with coloured coins with reference to bitcoin. Blockchain experts realized that the technology can have many more use cases which led to the first gamified NFT platform ‘Cryptokitties’.
“You know what, NFTs are a bubble,” ‘I don’t want to waste my time and energy on it’, We’ve heard this from many who do not fully understand the space yet.
Novices often lose interest as they do not get the bigger picture of it. In the next section, I’ll shed some light on the real value of NFTs as digital assets.
What are the underlying characteristics of NFTs?
Provable Authenticity: NFTs are minted and hosted on a blockchain network. These can be tracked or verified on the given network’s blockchain explorer. The public addresses of the sellers and buyers and transaction hash can be verified on the blockchain.
Provable Scarcity: NFTs are valued on the basis of their properties and the number of copies available for collectors.
Provable Ownership: While many debates that NFTs can be downloaded from the platforms, so what use is it? Well, let’s visualise if you got a Kevin Durant’s OG signed jersey (personally by him), while there may be lookalike merchandise selling in stores. Which one’s got more value? Of course, the original one you have.
While proving such scenarios in real-time may be time-consuming, verifying the authenticity and ownership of digital rare items is easy, thanks to DLTs.
Transferability: The most underrated feature of an NFT is the opportunity to resell and earn royalty. NFTs when strategically launched and sold can get excellent yields for both creators and sellers.
Why are sports aficionados becoming interested in NFTs?
Sports influencers are cashing out on the NFT’s potential to create a more viable way for fans to treasure a piece of their sports journey by offering signed photographs, jerseys, and video clips as NFTs. Some sports enthusiasts buy NFTs to support and show love for their favourite athletes while some wait for the NFTs to grow in value.
Fans are spoilt for choices with different kinds of NFTs like trading cards, signed jerseys, 3D art, images of signed trophies, and certificates. ‘Dapper Labs’, the biggest sports NFT marketplace maker has clocked 7.6 billion in sales.
Why are athletes minting NFTs?
Marketplaces, creators, clubs, and federations have come forward to dip their toes into the NFT sea. With the massive NFT movement, athletes have opened up to a creative channel to connect with their fans. The paradigm shift from physical merchandising to digital merchandising in the form of NFTs has paved the way for more opportunities for both sports influencers as well as NFT collectors. In the sports NFT frenzy, sports federations are also offering tickets in the form of NFTs; these tickets serve as memorabilia for people who are rooting for their favourite team or player.
What is the Outlook for Sports NFTs in 2022?
According to a report by Deloitte, Sports NFT collectors are likely to reach a whopping 5 million in numbers. Fantasy Football on Sorare will grow enormously for the fact that they have officially licensed 150 teams. The creation of NFTs in the sports category will also enable federations to get funded in tokens which may prove to be lucrative for them in the longer run.
In a statement, DraftKings co-founder and president Matt Kalish said,
“The NFT boom has transformed the collectibles business and spurred enthusiasm to early-adopting consumers worldwide—including the DraftKings community. This initial concept, which was created in collaboration with Autograph and its renowned collection of authentic digital artifacts, is an important first step as we enter the young NFT sector.”
It can be argued that NFTs passed the tipping point the day Beeple sold its NFT for 69 million dollars. With Bored Apes valued at 2.28 Million US Dollars. NBA Topshot and Sorare are niche NFT spaces, razor-focused on sports with a well defined audience. If we deep dive into NFT collector personas, an individual who is a sport buff will invest in the sport NFT as the core properties of them will grow in value and accreditation as well. There are scores of sports enthusiasts who buy sport NFT memorabilia to treasure and flaunt in the tech-driven society.
Will Sport NFTs “go to the moon”?
According to Deloitte, the sports NFT market will double in 2022. NFL is liaising with Ticketmaster to add NFTs in ticket stubs. With big names like F1 Delta Time Sebastian Vettel, Martin Odegaard’s NFTs and many other sport influencers joining the NFT bandwagon the world will see a sharp rise in this category as more sports enthusiasts fuel the ecosystem.
Are there any flipsides to Sport NFTs?
It is believed that the ongoing Covid-19 pandemic has paved the way for the NFT industry to grow exponentially. Fans who have bags of moolah to buy these NFTs won’t hesitate for a moment.
To tackle the missing inclusivity, industry experts are working on NFT fractionalization. By fractionalizing an NFT piece, fans can get a slice of it without having to buy the entire piece. With a solution like this, sports influencers will be able to connect and engage with more people while still having their profits from NFTs intact.
NFTs are still in their nascent stage. As there are no set regulatory frameworks for trading them. There are many who have joined the NFT craze, yet interest in the sport NFT universe is still relatively low. On the other hand, there are skeptics who believe it to be a bubble because of the volatility in prices. When entering this space one needs to tread carefully before they mint or buy NFTs. It is important for any would-be investor to do their own research thoroughly.