Web3 - The New Game for Athletes
Web3 – the “decentralized” World Wide Web – is coming to the world of sports, and with it comes new experiences for fans and new opportunities for athletes. The Sports-ISAO Crypto Team is here to help make Web3 a win-win for athletes and fans alike.
The collectibles market in the sports world was one of the first to embrace the new Web3 technology of Non-Fungible Tokens (NFTs). NFTs are digital assets with a record of ownership stored permanently on a blockchain. The creation of NFT-based and blockchain-powered NBA Top Shot by Dapper Labs in 2019 brought a peer-to-peer online marketplace for tradable digital collectibles to sports fans everywhere, reportedly generating some $1 billion in total sales already. Tradable digital assets can represent memorable moments in sport in the form of images, music or video clips, authentic player-owned assets, and countless other marketable artifacts. Trading in sports-related NFTs is fueling rapid growth in the broader sports memorabilia market, already accounting for some $2 billion within the overall $26 billion market.
In 2021, the NCAA changed their rules to allow collegiate athletes to make money by selling their name, image, and likeness rights. Already, college sports NFT sales are growing rapidly and multiple NFT marketplaces and other service providers have emerged catering to the collegiate market. The sector is booming.
Today’s Web3 technology allows the athletes themselves to control and benefit from the monetization of their NIL assets. This is quite different from the pre-digitization era. In the early 1950s, for example, Topps was paying Major League baseball players $125 per year for the right to use their image on trading cards. Yet in August of this year, a single (non-digitized) 1952 Mickey Mantle baseball card in original condition sold for $12.6 million. Were NIL property rights lost in the process? Web3 blockchain technology changes the game, allowing the player’s interest in future transactions of NIL assets to be preserved.
However, NFTs alone do not settle all the legal questions about asset ownership. Protections against fraud and counterfeiting are weak. There can be legal challenges to ownership of the NFT asset. And both athletes and fans must be careful to avoid exploitation by NFT hosting platforms and marketplaces on issues such as licensing, image rights, and payment obligations.