Brooklyn Nets guard Spencer Dinwiddie knows how to get to the point when he talks about using cryptocurrency to tokenize his basketball contract.
“When you democratize ownership of a contract, or cash flows, there’s two ways that an entertainer really derives his value, you know, he maximizes talent but also the fan engagement is another way,” he told CoinDesk during a session during CoinDesk’s Consensus: Distributed virtual conference.
Since late 2019, Dinwiddie has been looking to offer a piece of his future cash flows via a crypto token. The deal he’s looking to set up is not finalized yet.
“It’s ongoing and it’s something I’m really excited about actually,” he said.
His peers in basketball are starting to ask him questions about his approach as well, especially now that COVID-19 has left them idle.
“I can’t speak for anyone specifically, especially not my teammates – don’t want them to kill me when I get in the locker room,” Dinwiddie said, but he did acknowledge that a lot of them are curious about what he’s doing.
During the crisis, he said he sees athletes and other entertainers asking themselves “are there more exotic ways to maximize my earning potential especially while I’m sitting at home? You know the entrepreneurial mind of a lot of these guys is really starting to flourish during the crisis.”
Tokenize upon a star
It was not simple for Dinwiddie to get to the point where he could experiment with his contract in this way, he explained. The NBA itself was reluctant to let him.
“I think when you’re dealing with legacy systems, they covet control, quite frankly,” Dinwiddie said, explaining the reluctance of the NBA to allow him to tokenize his contract, largely because they didn’t really understand it. “They’re kind of allowing me to do like this pilot, in a sense, and so that’s why some of the more fun things we wanted to do aren’t included.”
He filed his token sale as a U.S. Securities and Exchange Commission Regulation D offering to put his team “in a position of power” when others began looking into the sale.
“By going with accredited investors first it really lets us focus on the meet of the offering and not worry about if there’s a kid down the street who might get ripped off or, yada yada, big bad basketball player type of thing,” he said.
He sees a larger potential beyond sports.
“Anyone with semi-public to public cash flows and has a fan base can participate,” he said.
For sports, he sees it potentially almost making fantasy sports real, but there’s no way it needs to stop there. He said, “I envision a world where a Kevin Hart token can trade for a LeBron James token can trade for a Serena Williams token, and because we are all our own business, each token will have its own perks attached to it. You know there might be a 5% dividend, there might be future value where it could have a truly asymmetrical yield curve. There could be a utility value, maybe Lebron James offering an exclusive camp only for his token holders.”
I envision a world where a Kevin Hart token can trade for a LeBron James token can trade for a Serena Williams token.
How he got here
With a Twitter bio now that reads, “Just a tech guy with a jumper,” Dinwiddie did not immediately convert to crypto enthusiasm when he first learned about it.
“When I got into the NBA in 2014, one of my friends in finance told me to start looking at bitcoin and cryptocurrency. I was definitely too scared. I just got into the NBA I wasn’t going to be one of those horror stories,” he said. “Fast forward to 2017, I actually got a little more solidified in the league, had the very same conversation, he showed me the price difference, so naturally I was curious. I put in small amounts of money and I was fortunate to ride the 2017 wave, and also the crash in 2018. And that pretty much led to an education process.”
He started getting curious about how other technologies beyond bitcoin could lead to new and interesting business models.
“Now we’re here and I’ve been an evangelist for both sides of the tree ever since,” he said.
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