Sports NFTs: Dapper Labs, Sorare and Algorand track fans
Good morning, and welcome to Protocol Fintech. This Wednesday: why sports-driven NFTs are still in play, new Zelle and Venmo scams, and UBS and Wealthfront’s breach.
Off the chain
Are fintech stocks oversold? The F-Prime Fintech Index is down a further 15% for the month, compounding losses for the year. Run through the list of index components and you see company after company with strong earnings growth. At some point the multiples get to the point where either the stock goes up or buyers come in. It’s always difficult to predict stock movements, but it seems like simple arithmetic to say that these stocks don’t have much longer to fall.
– Owen Thomas (e-mail | twitter)
A safe bet in NFTs
The crypto market has been rocky in recent months, and some NFTs have seen their prices crater, but digital tokens for sports are still scoring points with fans and investors. Several companies are working to bring mainstream sports into the NFT world, with support from major blockchain protocols eager to show wider utility.
Sports NFTs have great potential. The NFT sports collectibles market alone could be worth $92 billion a decade from now, by one analysis. And while sports-related NFTs are now mostly used to collect or play fantasy sports, many expect NFTs to also serve as ways for fans to connect with their favorite teams or players.
- Sales of Dapper Labs’ NBA Top Shot NFTs, which feature collectible video “moments” that can be bought, sold and traded, have continued to grow and the company has expanded into UFC and NFL collectibles. Most recently, Ticketmaster announced an agreement to use the Flow blockchain, which Dapper Labs created, to link NFTs to tickets.
- Sorare, which started with a fantasy NFT football game and added Major League Baseball this year, announced an expansion into NFT games with the NBA on Wednesday. The basketball game, which is expected to launch early in the NBA season this year, will feature tournaments and a marketplace, but also have NBA-specific features.
- Since Sorare announced its MLB product in May, it has seen 250,000 new registrations and $5 million in MLB trading volume so far.
It’s all about the fans, as ultimately that’s where the money comes from. “Fans benefit when there are many different ways to interact with teams and leagues,” said Jorge Urrutia del Pozo, vice president of soccer at Dapper Labs. (It’s football as in football.)
- Dapper is preparing to roll out a bilingual NFT aggregator product with the Spanish soccer league LaLiga, which has large fan bases in Spain, South America, Indonesia and the Middle East. The product will have access to 15 years of archives for its products, including stars such as Lionel Messi and Cristiano Ronaldo.
- Technology can make sense of the growing number of touchpoints with fans, Urrutia del Pozo said. This is important if NFTs can be used as proof of attendance or provide rewards, he added.
- The Algorand protocol collaborates with FIFA, which creates its FIFA+ Collect NFT marketplace. It will feature digital moments from FIFA World Cup games and other art and images.
Sean Ford, interim CEO of Algorand, sees sports as well as games and music as key growth drivers for blockchains. “Underlying all three are highly passionate and deeply engaged user bases,” he said. But the possibilities for NFTs in sports go far beyond just collectibles or fantasy games. Sports teams or leagues can use NFTs to sell parts of their teams, sell seat licenses, give fans access to special areas of the stadium or special merchandise or to allow them to get unique digital moments of a game they attended. It’s a way to increase engagement, which is the goal after all.
– Tomio Geron (e-mail | twitter)
A version of this story first appeared on Protocol.com. Read it here.
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On the money
Apple avoided a lawsuit over a fake crypto app. A federal judge ruled that Section 230 of the Communications Decency Act protects Apple from a proposed class action lawsuit over a fake cryptocurrency wallet app available for download on the App Store.
Scammers “accidentally” send people money on Venmo and Zelle. The Los Angeles Times explains the risks of a popular scam: “A scammer sends you $500, but if the charge is reversed, the first $500 is withdrawn. The money you sent ‘back’ is another $500. That’s your $500.” The Consumer Financial Protection Bureau, by the way, has promised new rules to deal with peer-to-peer payment fraud.
The IMF says that countries must coordinate crypto regulation. Cryptocurrencies are no longer “niche products,” according to a new report from the agency, and regulators need to coordinate a meaningful global response.
One area for NFTs that isn’t slowing down: trademark registrations. More than 5,800 NFT-related trademark applications have been filed in 2022, compared to 2,087 for all of 2021.
PayPal and Intuit have joined the Financial Technology Association. The industry group’s member list already includes, among others, Block, Klarna, Plaid and Stripe.
Overheard
Bram Cohen think bitcoin’s biggest advocates may be their own worst enemies. “There’s a lot of good that can be done with crypto, but maxis won’t help,” the BitTorrent founder tweeted in a thread about the effect of crypto adoption on remittance costs. “They are also bad at PR. “We’re assholes” is a positioning I’ll gladly concede to them.”
Fintechs that compete with banks without the same regulatory burden are “getting away with murder”, Eugene Ludwig, a former comptroller under the Clinton administration, told an audience Tuesday at the Clearing House and Bank Policy Institute’s annual conference. Ludwig also believes that the banks should be freed up “play more aggressively in the crypto markets.”
Agreement flow
Real estate marketing and research firm VTS raised $125 million in a Series E round financing round. CBRE led the round, which the Wall Street Journal characterized as a bet on workers returning to the office.
TimePayment, which specializes in sales finance for specialty equipment, has acquired e-commerce finance company QuickSpark Financial. More than 30 QuickSpark employees were hired to work at TimePayment.
UBS and Wealthfront terminated their $1.4 billion deal following a mutual termination. The purchase of the smaller robo-advisor was announced eight months ago, but has been plagued by regulatory concerns, according to insiders who spoke to Axios. UBS will now invest $69.7 million in Wealthfront through a convertible note.
Alloy, an identity decisioning service for the financial sector, raised $52 million in an additional funding round led by Lightspeed Venture Partners and Avenir Growth. Canapi Ventures, Bessemer Venture Partners, Avid Ventures and Felicis Ventures also participated in the round, which brings the company to a valuation of $1.55 billion.
Kevin Rose-founded NFT collective Proof raised $50 million in a Series A funding round led by a16z. Seven Seven Six, True Ventures, Flamingo DAO, VaynerFund and SV Angel also participated in the round.
Embedded fintech company Solid raised $63 million in a Series B round led by FTV Capital. The company, rebranded from Wise in 2021, has raised $80.7 million.
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Thanks for reading – see you tomorrow!
