As most of us know, buying Packs is the most cost-effective way to get involved in NBA Top Shot. Since I started collecting Moments back in January, Packs have been considered +EV; the Moments inside your pack are more valuable than the Pack’s cost - regardless of the price. I could write an entire article on why these +EV packs are bad for the TopShot ecosystem, but Michael Levy took the words out of my mouth in this Twitter thread last week.
In short, these +EV packs have created a disjointed ecosystem with two primary actors:
Rent Seekers: Top Shot users who only buy Packs, immediately sell their Moments for a nice profit, and wait for the next Pack drop.
Collectors: Top Shot users who have a genuine interest in building a collection of Moments with an additional goal of that collection’s value growing over time.
In an interesting move to combat against rent seekers, Top Shot began rolling out Pack eligibility requirements to reward true collectors, starting with the All-Star Game Pack. So what have we learned? Let’s dive in.
At first, these requirements were announced before taking a snapshot of users’ accounts, determining who is eligible. To no surprise, this gave rent seekers plenty of time to buy the cheapest Moments on the marketplace and become eligible — a small “toll fee” for users likely sitting on hundreds of dollars of profits. How quickly did Top Shot users scramble to become eligible for the drop? Why don’t we take a look at Mason Plumlee’s Series 2 Base Set Moment (35k CC) transactions over time:
Think you can tell when the All-Star Game Pack requirements were announced? The desire to be eligible for the Pack drop was so strong, that the cheapest Moments on the marketplace, such as this Mason Plumlee dunk, saw an enormous increase in demand. Without a corresponding increase in supply, the price shot from $6 up to $20 over the course of two days.
Top Shot established clear requirements, and rent seekers found the easiest way the go through the motions and technically qualify for the drop. We can only imagine that Top Shot learned from this experience, and made their next change to Pack eligibility: users would not be told the specific eligibility requirements before taking a snapshot. Did this change user behavior? Let’s find out.
Premium Pack (Drop 2)
Yesterday afternoon, Top Shot announced the requirements for the upcoming Premium, MGLE Pack Drop. At the time of the snapshot (taken before the announcement) users had to:
Own 1+ MGLE Moment; or
Own 2+ Rare Moments; or
Own 15+ Moments
Have spent $99+ in the Top Shot marketplace
What happened in the Marketplace after the eligibility requirements were announced? To answer this question we can first look at the volume of transactions happening in the Marketplace. Specifically, we can count the number of transactions in rolling 10-minute intervals to get a sense for just how many transactions were flowing through the system.
Here we can see the massive spike in transactions following the announcement. I was surprised to see users seemingly going through the motions to meet the eligibility requirements, despite the snapshot having already been taken. It’s clear to me that users are putting their best foot forward to become eligible for the next Pack drop with similar requirements.
So were users simply loading up on the cheapest Moments they could find? Just like before, we can separate all marketplace transactions into 10-minute intervals. Next, we’ll calculate the median sale price to determine what the most typical purchase looked like.
To no surprise, users were filling their accounts with the cheapest Moments they could get their hands on. So much so, that the solid $5 “floor” on the marketplace evaporated. One day earlier, 40% of the Series 2 Base Set Commons (35k circulation count) had a low ask of $5. Two hours after the Premium pack announcement only two Moments had a sticker price of $5. The entire floor was wiped out. So we can see that the cheapest Moments were gobbled up, but what about the eligibility requirement around Rare moments?
Were users adding some of these Rare moments to their account? Absolutely. Here we can see the rate at which users were adding Rare Moments to their Top Shot collections, and the spike that occurred after the announcement. To illustrate this even further, consider this chart showing sales of Lu Dort’s Rare, Rising Stars Moment:
In the 24 hours leading up to the announcement, there were only seven sales of this Lu Dort Rare Moment. As users saw that owning a Rare Moment could help them score a Pack in the future, they flocked to the most cost-effective Rare Moments. The transaction volume rapidly increased, and without an appropriate increase in listings, the price jumped up from $125 to $155 (25%).
Food for Thought
It’s been fascinating to see Top Shot iterate on Pack eligibility requirements, and analyze how the market has responded. Top Shot says jump, and the user base asks, "how high?” Personally, it feels to me that Top Shot users are doing their best to pick up on the traits Top Shot is looking for when rewarding users with Pack eligibility, and this feels a bit contrived. Rather than simply collecting the Moments they like, or those that show potential, users are looking for the most cost effective way to be eligible for the next Pack drop - something that arguably wouldn’t be the case if Packs were not so aggressively +EV.
Lastly, this most recent set of eligibility requirements paint a picture of a Pack drop’s contents dictating the eligibility criteria. Want to be eligible for a Pack with Rare Moments? Show Top Shot that you previously had an interest in these Moments. The below tweet from Alan Carr, Dapper Labs’ game designer seems to echo this idea:
Could we see similar eligibility requirements for the next Holo Icon Legendary Pack drop? I wouldn’t be surprised. That’s all for this week - I hope you enjoyed this article, and 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.