NBA Rejects Spencer Dinwiddie’s Request to Tokenize His Contract
The National Basketball Association (NBA) is blocking a basketball player on the Brooklyn Nets from tokenizing his contract. Spencer Dinwiddie was planning on introducing a platform where athletes could link their contracts on Ethereum, but the NBA has responded to such requests conservatively.
Could NBA contracts be tokenized on the Ethereum blockchain? One basketball player for the Brooklyn Nets, Spencer Dinwiddie, seems to believe so. However, the league has blocked his request.
The idea was a novel one. The contract work as follows: the borrower (in this case, Dinwiddie) would give up some future income in return for a “smaller lump sum payment.” This money can be reinvested immediately. The contract would thus represent a bond but rather than buying through a broker, it would be tokenized.
Such an idea has been tweaked by other firms looking to issue bonds on a blockchain-based network. BitBond, for example, has a platform which tokenizes bonds and is based in the European Union.
The NBA, however, didn’t take too kindly to the idea. According to Larry Cermak, Director of Research for The Block:
“I don’t want to speak for the crypto world. I found it disappointing but understandable. I think the NBA officials are misunderstanding the structure of Dinwiddie’s tokens. He is not transferring or assigning his contract to a third party. Dinwiddie is only guaranteeing that allotted funds he earns playing for the Nets will be distributed to the investors.”
Although the NBA likely won’t allow Dinwiddie to tokenize his contract anytime soon, the idea has spread. And the voices will only get louder.
The NBA’s involvement only serves to attract more attention to the idea. I imagine that Dinwiddie loves the free PR.
Maybe we can expect a tokenized sports contract sometime in 2020.
Do you think tokenizing sports contracts is a good idea? Let us know your thoughts in the comments down below.
Image courtesy of Fortune.