Is Anyone Still Doing Challenges?

Analyzing the latest trends in challenge completion rates

The latest Top Shot challenge came to a close the other day, and it had remarkably low turnout. In theory, 1,800 collectors could have completed the latest Throwdowns Challenge and earned themselves a Blake Griffin dunk, yet only 382 collectors did so. That works out 21% - the third lowest completion percentage among all challenges since August 2020. I didn’t think NBA fans could be less excited about a Blake Griffin dunk after he jumped over the hood of a Kia, but I was proven wrong.

All jokes aside, there’s more at play here than Blake Griffin and his oddly now-rare dunking Moments on Top Shot. Completing Challenges has appeared to become less and less popular, but let’s dive into the data and see what we find.

Challenge Completion Rates over Time

As we saw earlier, we can calculate a challenge completion rate by comparing the number of completing users to the theoretical maximum number of completions - a number simply determined by the lowest circulation count Moment in any given challenge. One of the true Top Shot OG’s, Steve Veerman (@veerman), was kind enough to collect and share this data with me, so let’s see what we can find.

First, let’s take a look at challenge completion rates over time. Has completing challenges become more or less popular over the past nine months?

Right away, we can see a clear trend in challenge completion rates. Between November ‘20 and late February ‘21, challenges became increasingly popular. Not surprisingly, after the massive run-up in late February came to a close and account valuations began dropping, challenge completion rates stalled and eventually began decreasing. The gradual decline since last February doesn’t necessarily surprise me, and specifically for few reasons:

First, I believe the challenge completion rate is the most critical component when determining if a challenge will be profitable. With more collectors completing a challenge, the mint count of the reward increases, and the value of an individual reward Moment decreases. Furthermore, with more collectors completing a challenge, there is more demand in the marketplace. This elevated demand can drive up prices in the marketplace, increasing the out-of-pocket challenge costs, and narrowing collector’s profit margins. As challenges became increasingly popular, they also became less profitable investments.

Secondly, challenges are far more enticing in a bull market than a bear market. In a bull market, holding on to a handful of Moments isn’t much of a concern. Sure, you may have paid a premium for these Moments due to their challenge utility, but their underlying value increases over time as you approach the challenge deadline. In a bear market, however, we have the opposite effects. Holding on to Moments for a week or two could leave you left with significantly depreciated challenge Moments, as well as a market less willing to invest heavily in your shiny new challenge reward.

Are Rewards Getting Worse?

We poked fun at a Blake Griffin dunk not being the most desirable Moment on Top shot, and it begs the question: have challenge rewards simply gotten worse over time? Could this be the root cause? To answer this question, we can start by evaluating how desirable each challenge reward player is on Top Shot. To use a level playing field, we’ll look up the market cap of each player’s 35k Series 2 Base Set Moment. Factoring in each player’s high-level value on Top Shot, we see a slight variation of our original chart:

The larger the circle, the more valuable the player. Those large circles represent players such as LeBron, Luka, and Zion. Without breaking out the calculator, we can see that challenge rewards don’t seem to simply be getting worse over time. Interestingly, we can see how more valuable players seem to garner a higher completion percentage relative to what is considered normal at that point in time. April was home to plenty of star-studded challenge rewards, and while these didn’t match the challenge completion values of late 2020, they certainly sit in the top of the range compared to other challenges over this time frame. Not surprisingly, challenge completion rate does seem correlated to player popularity on Top Shot.

Does Challenge Rarity Matter?

Not all challenges are created equal - some have a sticker price in the tens of thousands of dollars, while others might cost a few hundred. Do we see any trends among challenge rarities?

Surprisingly, the answer appears to be no. Despite requiring high-dollar Moments, legendary challenges seem to be completed at the same rate as their Common counterparts. Take a look at any challenge rarity, and you’ll see a similar rise and fall over the past six months.

What I’m Excited About

Just because challenges have become less and less popular over the past three months, we can’t expect this trend to necessarily continue. Simply put, Top Shot challenges will be -EV investments until they’re not. As more collectors decide that challenges aren’t for them, the reward Moments become more and more rare. If too many collectors simply write-off challenges as “not for them”, we can expect both less demand in the marketplace and lower circulation count rewards, two factors that directly lead to more profitable investments.

Lastly, I want to highlight Top Shot’s latest challenge wrinkle: Quests. Over the past handful of months, challenges have often been a frustrating experience for many collectors. Paying $90 for a T.J. McConnell Base Set Moment is a tough pill to swallow, and it can feel as though you’re simply going through the motions. With the Cool Cats Showcase Quest, the challenge concept was flipped on its head. I was thrilled to see an open-ended challenge that allowed users to follow certain guidelines and complete the challenge with Moments likely already in their collection. I believe this is the first step towards more unexpected rewards on Top Shot that allow collectors to forge their own strategies as they grow their collections and create a more dynamic, vibrant ecosystem.

That’s all for this week! As always, I hope you enjoyed this article. Want to support the newsletter? The best way you can help out is by sharing it with a friend.

Disclaimer: None of the above constitutes professional and/or financial advice. All opinions expressed on Minted Moment are from the personal research and experience of author, and are intended for educational purposes only.