The NFT Sports Market

Huddle Up: The State of Sports NFTs

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The Olympics are always memorable. Even in the shadow of Covid-19, the 2020 (2021?) Olympic games have been full of incredible moments. Some are heartwarming. Others are funny. Few are soul-crushing. All tearjerking.

History is made with each consecutive Olympic Games as existing athletes cement their legacies and new athletes push the boundaries of what humanity previously thought was possible. The Olympics are the great unifier. They bring the world’s most impressive individuals together to compete for something greater than themselves and inspire the next generation.

Over the past several decades, the global sports industry has continued to expand in both popularity and the creation of new sports. In 2018, the global sports market was valued at approximately $471 billion, up nearly 50% since 2011. With the advent of the digital age, sports betting and adjacent related business (e.g. fantasy sports) have grown in parallel.

Combining speculation with sports is a tried and true recipe and cryptonetworks with tokenized assets are the natural steroids for which the industry will use to reach new heights. To date, crypto-based sports applications have been incredibly successful. Non-fungible token sports applications have generated over $800 million in secondary sales and likely over $1 billion when factoring in primary sales.

Crypto sports apps now account for three of the top ten non-fungible token applications and five of the top thirty. NBA Top Shot accounts for the majority of sports NFT sales and remains one of the most successful NFT applications overall. Over time, sports like Soccer – and the NFTs projects behind those sports like Sorare – boast larger potential markets.

These projects rely highly on partnerships and licensing agreements with professional sports organizations to use the image and likeness of athletes and sports teams. Notably, Zed Run – a digital horse racing game where NFTs represent individual horses – announced a partnership with NASCAR to develop a stock car auto racing game to grow a new fandom experience. As the companies – Dapper Labs (NBA Top Shot), Sorare, Virtual Human Studio (Zed Run) – grow their signature NFT brands, they will continue to evolve by expanding to other sports or building applications on top of their games (e.g. NBA Top Shot is developing a fantasy game called HardCourt).

While total monthly sales have declined, Sorare and Zed Run have remained steady showing continued interest for NFT in sports-based applications. It’s possible that the functionality offered by Sorare and Zed Run NFTs – both are used for fantasy sports or racing – has resulted in their continued speculation while sole collectibles like Top Shot and Topps NFTs have experienced a decline in speculative fervor.

But, even though volume for NBA Top Shot slows, unique buyers have remained relatively strong with over 50,000 unique buyers each month since February. Following the NFT market peak, Topps MLB and F1 Delta Time have fallen behind in user growth and sales compared to Sorare, Zed Run, and NBA Top Shot.

Still, crypto sports applications present one of the most obvious use cases for passionate fans to speculate on their favorite activities or transfer their gambling habits – like horse racing – from the physical realm into the digital.

Sports are a passion shared by billions of people around the world. Crypto sports don’t promise the same level of national pride, human achievement, and raw emotion that we witness in the Olympics. However, crypto sports apps will be widely integrated into our daily lives as individuals continue to search for ways to speculate on their passions.