What is NBA Top Shop, the Dapper Labs built marketplace that did $50 million in sales in 30 days?

"I think we're on track to be the fastest-growing marketplace ever," says Dapper Labs CEO Roham Gharegozlou

NBA Top Shot is a blockchain-based platform and marketplace that allows people to purchase, trade and own exclusive digital NBA collectibles.

It was announced in mid-2019 as a partnership between the NBA, NBAPA and Vancouver’s Dapper Labs, makers of CryptoKitties. If you’re wondering how exactly it works, here’s how the NBA describes it: “In plain terms: think of the future of the sports trading card market mixed with similar principles of cryptocurrency, but it's virtual cards that contain individual NBA highlights.”

Dapper Labs CEO Roham Gharegozlou explained it to Yahoo! Finance like this:

at the simplest level, it's like trading cards, you know, people open packs, trade with their friends in the marketplace, complete sets to get new content. And what we did was take the greatest moments in NBA history, the video highlights, and we turned those into limited edition digital collectibles.

If the idea of owning the greatest moments in NBA history interests you, you’re not alone. The demand has been staggering. According to Gharegozlou, in the last 30 days, the NBA Top Shop marketplace did over $50 million in sales. “I think we’re on track to be the fastest-growing marketplace ever,” he recently said.

Okay, but how does it work? you ask again. Per the NBA:

the NBA cuts the highlights and then Dapper Labs decides how many of each highlight they are going to sell and number them. They place each highlight into digital packs, just like regular trading cards, and sell the packs on the official NBA Top Shot website for prices ranging from $9 to $230. The pack prices depend on the quality of highlight, the stardom level of the player and the exclusiveness of the card. Once you purchase a pack, those highlights go into your encrypted, secure highlight wallet to be "showcased" or re-sold on the NBA Top Shot Marketplace.

If the top range of packs is only $230, how has the marketplace achieved $50 million in sales? Well, first of all. All of the packs are currently sold out, which means you have to buy them from other people. It’s a marketplace, remember. And people are reselling the biggest moments for absolutely insane amounts of money. For example, there have been multiple sales worth over $20,000 U.S. dollars, including a specific LeBron James highlight that recently sold for over USD $71,000.

By volume, those larger price tags are still rare, says Gharegozlou. “The big dollars sales get the headlines,” he says. “But the majority of transactions on the Top Shop marketplace are actually under $50.”

Still, digital collectibles are set to be big business. “The trading card business is worth $5-$6 billion annually,” Gharegozlou told The Action Network. “I don’t see why we can’t get to a place where this business is grossing $1 billion alone.”

On the heels of explosive growth, Dappers Labs is set to raise $250 million at a $2 billion valuation according to a report in The Block. Dapper Labs’ current investors include Andreessen Horowitz, Union Square Ventures, Venrock, GV (formally known as Google Ventures), and the founders of Dreamworks, Reddit, Coinbase, Zynga, and AngelList, among others.