NBA Player Spencer Dinwiddie Tokenizes Contract with Blockchain
Professional basketball player for the Brooklyn Nets Spencer Dinwiddie has opted to turn his National Basketball Association (NBA) contract into a tokenized bond. Investors will be able to invest in the security and earn interest based on Dinwiddie’s performance on the field of play, reports The Athletic on September 12, 2019.
Crypto on the Courts
Per sources close to the matter, Spencer Dinwiddie has caught the crypto fever and is now looking to launch own blockchain-based digital asset.
Reportedly. Dinwiddie is signing a new three-year contract extension worth $34.36 million with Brooklyn Nets and has opted to convert his NBA contract into a digital investment.
Notably, the securitization of Dinwiddie’s NBA contract will enable him to get a significant upfront payment that would enable him to issue tokens to investors who will, in turn, earn interest on the cryptoasset.
Risks and Grey Areas
Further reports revealed that Dinwiddie has a player option which is worth $12.3 million in 2021; however, there are uncertainties on how it will impact on token holders if he opts out of the deal and earns more on his next contract.
Also, there are certain risks the tokenized bond poses to investors since Dinwiddie’s NBA contract is the collateral that will be used to pay these people, and termination of his contract by Brooklyn Nets would pose a difficulty in reinstating investors’ funds.
Despite the risks associated with Dinwiddie’s project, the move has been applauded by numerous crypto enthusiasts, including Anthony Pompliano, Founder of Morgan Creek Digital.
In a tweet Pompliano said:
“My guy @SDinwiddie_25 is turning his NBA contract into a tokenized investment vehicle. Bang Bang…Welcome to the future.”
Several members of the crypto community have also expressed their excitement over the project, opining that it could have a positive impact on the price of bitcoin and altcoins since the project could be built on the Ethereum smart contracts blockchain or any other distributed ledger.
Similarly, others remarked that the success of Dinwiddie’s tokenized bond could spur other top athletes to join the crypto and blockchain bandwagon shortly.
It’s worth noting that cryptocurrency is gaining significant traction in the sports industry.
BTCManager reported on August 15, 2019, that NBA team, Dallas Mavericks plans to add bitcoin as a payment option for game tickets and team merchandise.
On September 13, 2019, Watford Football Club announced that the Bitcoin logo will be placed on its shirt sleeve this season, as part of a partnership between the club and crypto betting platform, Sportsbet.io.