💡The Truth About NFTs & Why Athletes Should Use Them

Welcome to The Hype Report where we break down the latest news, stories & happenings around sports & web3.

The general sentiment around NFTs has shifted a lot over the past several months:

• Fanatics sold it's 60% stake in sports-focused NFT company Candy Digital

• Dapper Labs is facing a lawsuit regarding their NFTs being unregistered securities

• Justin Dufoe filed a class action lawsuit against DraftKings Inc. and three of its executives claiming DraftKings harms investors by allegedly selling NFTs that he argues constitute unregistered securities.

Despite this, I still believe NFTs still have a strong use case in the world of sports.

Especially for athletes.

Here's what I believe people are getting wrong about them and why I think athletes should be utilizing them.

Let's dive into it deeper ⬇️

The Wild Wild World Of NFTs

NFTs took off at the height of the pandemic.

Bored Apes and Crypto Punks became major brands and communities.

Companies like OpenSea, FTX, and Rariable reached insane valuations.

And we can't forget when Beeple sold an NFT for $69 million.

Searches for the term “NFT” went to record highs in 2021.

But then they dropped massively in 2022.

After several failed projects, scams, and extreme market volatility, we're now at an inflection point.

Whenever there is a new trend, there's usually an inherent interest followed by a gold rush.

And that's exactly what we saw with NFTs over the past several years which was also propped up by the pandemic.

People saw an opportunity to profit from something that was novel and innovative and moreover had the time to do so.

NFTs have been used as a revenue driver in most cases when in actuality they are better as an engagement and reward mechanism.

The money grab created a false sense of value for these assets and as a result things quickly fell apart.

A lot of people lost money, lost hope, and dropped out of the NFT game.

But the technology didnt disappear.

And what makes NFTs valuable is not what you see on top.

It's what lies beneath.

This brings me to why I think athletes should be using them.

Although many athletes have dabbled in the NFT space, in my opinion, most haven't approached it with the right mindset...

How Athletes Should Be Looking To Use Them

I personally believe NFTs can be a complete game-changer in terms of brand awareness, fan engagement, possibly revenue, etc… when leveraged the right way.

Athletes, who already have an interested fanbase and/or audience, can use NFTs to take the connection they have with those people a step further.

Here’s a step-by-step on how athletes should be approaching NFTs:

1) Focus on building community first

A lot of athletes already have an audience.

Few athletes have communities or raving fans.

The number one focus should be turning current fans into super fans through consistency, and transparency.

I’d much rather have 10,000 fans who follow my every move instead of 100,000 followers who really could care less about what I do off the playing field.

Building an audience is a game of quantity whereas building a community is a game of quality.

If an athlete is serious about longevity and sustainability, then they should be looking at the quality of their community instead of the quantity of their audience.

2) VUM (Value + Utility + Mission)

Before launching an NFT collection, athletes have to ask themselves,

“What’s the value I’m providing with this collection?”

“Is it access?”

“Exclusivity?”

“A behind-the-scenes look into my life?”

You can't give people what you think they want.

You have to give them what they want and make it clear as to what they’re getting when they purchase an NFT from the collection.

Furthermore, they must understand the mission and objective behind the project.

What is the “why?”

What’s the bigger purpose behind this NFT launch?

When you make it all about the community - the community will make it all about you.

3) Put together a solid team

Great NFT projects don’t happen by happenstance.

They’re a result of amazing people coming together, and bringing different skill sets to the table for a common mission.

With NFTs being such a new concept, there is a lot of moving parts to build a great project and it can’t happen with one person.

Athletes have to surround themselves with solid advisors, designers, community managers, and others who have some experience and knowledge in the space.

The NFT projects that are still going strong today after what the market has gone through are a testament to the people working behind the scenes daily to ensure that everything stays on course.

4) Create a long-term roadmap

Most NFT projects have and will fail because people don’t look at them as businesses when that’s ultimately what they are.

Businesses don’t succeed overnight. They take several years to formulate.

Any successful project requires a clear roadmap and strategy.

Athletes need a long-term outlook and understand that this is not a quick money grab.

Launching the project is only the beginning.

Over time, athletes still have to maintain the community, prove value and utility, and continue to deliver on promises.

5) Go at it 100% or don’t do it at all…

If an athlete is not going in with the mindset of giving it their all then they shouldn’t do it in the first place.

And that’s with any project, brand collab, or business partnership.

Nothing good comes from pursuing opportunities half-assed.

Athletes have to be passionate about it or it won’t succeed.

Just as most athletes start and continue playing their sport because they love the process and the game — this has to be looked at this the same way.

Never make it about the outcome.

Where Do We Go From Here?

I use to believe that every athlete can and should create their own NFT collection.

As NFTs become mainstream in sports and in society, this is still viable but they have to be strategic with what they're trying to build.

We’re past the days of hype with apes and mutants being sold for millions of dollars.

Athletes can no longer just spin up a project and hope people will buy in.

They have to be clear about the plan and vision.

They have to know what they're getting into.

Most importantly, they have to make it about the people — and never about themselves.

One day, everyone you know will own NFTs or digital assets.

It's inevitable.

But how quickly we get there depends on much we can reduce the hype (no pun intended) and increase the utility and value associated with them.

From there, the sky is the limit.

Appreciate you reading!

Talk to you again soon,

Malcolm

This newsletter is for informational purposes only and is not financial or business advice in any capacity. The information shared is my thoughts & opinions and does not represent the opinions of any other person, business, entity, or sponsor.

The contents of this newsletter also should not be used in any public or private domain without the author's express permission. The contents of this newsletter should not be used for any commercial activity, for example, research report, consultancy activity, or paywalled article, without the author's express permission.