In February 2021, Jesse Schwarz bought a Top Shot NFT of LeBron James dunking for $208,000, setting a record. It was the most expensive sale in the platform’s short history; at the time, the average price of a Moment — Top Shot lingo for an NFT — was $181.81, according to CryptoSlam. “To invest and set that record with the $208,000 purchase on LeBron just was an awesome Moment as a fan but obviously as an investor, too,” Schwarz told me then.

One of the things Top Shot had going for it was that it had a real-world analogue: trading cards. The experience was designed so that it wasn’t necessary for users to know anything about cryptocurrency. You could pay with a credit card. Onboarding materials avoided using words like “blockchain” on purpose, even though Dapper Labs had designed its own.

It is now June 2022, and Schwarz is still holding the NFT, but the number of monthly unique buyers on Top Shot tumbled by more than half. In May, the average price of an NFT on the platform was just $17.71. “The purchase I made about a year ago, that was kind of the peak,” Schwarz says. He then compared Top Shot Moments unfavorably to Bored Ape Yacht Club, another NFT project. The cheapest Bored Ape available as of June 6th is $163,298.67, according to CoinGecko.

What happened?

“The first question, obviously, if prices fall is how did they get so high in the first place?” says Michael Levy, another Top Shot collector. “And is that something that was something that Top Shot or the Dapper team did to lead prices that high? Is it something that they are responsible for keeping up at a certain level?”

The way Levy figures it, there was a lot of hype around Top Shot, which led to the number of users increasing about a hundredfold. That slammed the Top Shot’s servers, and so there was a period where the company didn’t release new packs. That pushed prices up, which led to more media coverage, which led to new users, which pushed the prices up further. “And then we reached these very, very, very high levels that I don’t think anyone expected, the prices were up, I don’t know, 50 to 100 times over, like, a four week period,” Levy says.

The data from CryptoSlam backs that up: in December 2020, there were 910 unique buyers, and the average price for a Moment was $27.11. In January, there were more than 19,000 unique buyers, and the average price for a Moment was $80.20. By February, there were more than 80,000 unique buyers, and the average Moment price was $181.81.

“Basically what happened was — Top Shot was this massive boom,” says LG Doucet, the host of The First Mint, a podcast about sports NFTs. “It gave, like, hundreds of thousands of people their first NFT and helped them learn what an NFT is.” Doucet’s account aligns with Levy’s: the platform was overloaded with users and was often down. To try to compensate for the onrush of new users, Top Shot made lots of new Moments.

“Top Shot just flooded the market with more and more Moments,” Schwarz says. “My LeBron Moment is still 149. But now there’s tons of other LeBron Moments, and they’re making new ones every month. And they just weren’t bringing new people in.”

Sure, there’s a speculative side to NFTs, says Jayne Peressini, VP of growth at Dapper Labs. But to Peressini, an NFT is a “tangible asset.” When a stock goes down, she says, she has less value — but when an NFT goes down, she still has the NFT. The same goes for a physical trading card. And, Peressini noted, the majority of actual trading cards aren’t worth much either.

When I spoke to users last year, many identified two separate camps in the Top Shot community. One group was hardcore NBA fans. The others were speculators. When there was a rush of new Moments, the speculators left, says Doucet. “They were like, okay, more supply’s coming. I know how this works. I’m just gonna sell everything and take off.”

Except there was a problem with getting their money out. As Top Shot saw an unexpected explosion of user growth, withdrawal speeds slowed to a crawl. A month after Schwarz bought the Moment of the LeBron James dunk, withdrawals were taking six to eight weeks. Top Shot doubled its team for processing withdrawals (from four to eight people) while juggling a backlog. Meanwhile, some collectors got frustrated and left, says Steve, a Top Shot user. “I think they ticked off some people because they didn’t get their money fast enough.”

Withdrawals are no longer an issue, Peressini says. “Users can withdraw quite quickly,” she says, calling the service as “an industry standard.” She compared Top Shot’s woes in early 2021 to the early days of Facebook and Myspace, when those websites stalled or timed out regularly as they struggled with scale.

Peressini views Top Shot as a long game. “This is still a maturing market,” she tells me. ”We have a lot of really loyal customers, and they don’t ask us about the price, they ask us, ‘Hey, what are you doing with the product?’”

Mobile apps are in development, and Dapper is also exploring the possibility of letting third-party developers build on top of Top Shot, Peressini says. There may be some new mechanics coming in the future, such as games or challenges where users have to burn their NFTs to participate. That could help with supply problems, which would in turn theoretically lift prices.

Still, Top Shot suffers by comparison to another famous NFT project — one that wasn’t on the radar during the Top Shot craze of early 2021. People who held Bored Apes could use a serum to create Mutant Apes; they also received free ApeCoin that they can use as in-game currency for Benji Bananas — or that they could simply sell. The other thing the Bored Apes changed was the profile photo. Before them, says Doucet, making an NFT your profile picture on social networks such as Twitter wasn’t really a thing. Afterward, it became a marker of identity.

This difference in interaction, visibility, and supply hasn’t gone unnoticed by collectors. “So kind of the core of NFTs and collecting is you’re trusting the company or the creator to keep scarcity. And that’s what makes it appealing, right?” says Schwarz, who compared Top Shot unfavorably to Bored Ape Yacht Club in this respect. BAYC’s approach to building a community is “very calculated and still not outpacing the demand.”

Levy was more charitable. “They’ve been trying to find the right balance between collecting, gamification, kind of fantasy sports elements, and that mix,” says Levy. “And so they’ve been pulling levers up and down trying to find the right mix.”

But NFTs rely heavily on sentiment — like the fear of missing out — and something as intangible as user frustration can tank prices. “So right now, the Top Shot market has been going down, while everyone with Bored Apes and other collections are celebrating,” Levy says. “And so that further leads to frustrations and people want to sell, which further pushes price down.”

“Some people left Top Shot and bought a bunch of cats and apes and stuff and became millionaires,” Doucet says. “And the people that stuck to Top Shot lost money. There’s no easy way to say that.”

Despite their criticisms, these users are still involved in Top Shot, and do have positive things to say about it.

Levy, for instance, is sympathetic to Dapper and the choices it faces when navigating between its original business plan and its disgruntled community members. “As they’ve experimented, some people have not liked decisions, some people have wanted them to take more responsibility for the prices in the secondary market. And it’s a huge company, so it takes a little time to react.” While he thinks Dapper made some decisions that didn’t look great in hindsight, he doesn’t think they were obviously wrong at the time.

“I don’t think it’s the worst thing in the world that people who were kind of attracted to the free money aspect have moved on to other projects,” Levy told me. “I think Top Shot will do best when they appeal to core NBA fans who value the actual product.”

Top Shot had great engagement in the last year, exceeding the NBA’s expectations, says Adrienne O’Keeffe, who leads consumer products and gaming partnerships at the NBA. “It still is a brand-new space, and was even more so when we launched Top Shot,” she says. “I think we’re all learning this together.”

I heard this kind of optimism from other enthusiasts I talked to. “I don’t see these prices as a negative at all,” says Steve. “I see this as like, well, the next, the next wave of users who are actually interested in basketball, they can get in and they can collect a LeBron James for $5 or $4.” That seems more accessible than having to pony up $200 for a single Moment, he says.

When I spoke with Roham Gharegozlou, Dapper Labs’ CEO, last year, he told me that there were plans for a mobile game that was supposed to roll out in 2021. That didn’t happen. Gharegozlou also told me in 2021 that he viewed Top Shot as a souped-up version of a fan club, which might mean real perks at real games. That part has come closer to reality.

“From our perspective, what we’re trying to do here is drive fan engagement, give our fans a way to display their ownership, show off their ownership and connect with the league,” says the NBA’s O’Keeffe. “Our goal is to create a compelling product that engages our fans, keeps them excited, gives them access, and keeps them coming back, regardless of the secondary value.”

Top Shot raffled off tickets to every playoff game this year, as well as to the NBA Draft last year and opening nights. Right now, that’s based on something called a “collector score,” which is based on how active users are on the platform, according to Peressini.

One attempt at creating value has been around “flash challenges” — which reward users for interacting with Top Shot during a specific game night or a weekend, with random requirements for unlocking rewards. Peressini says the goal was to tie the platform more closely to the actual NBA games, making it more rewarding for hardcore fans.

There have been some player meet-and-greets in the Top Shot Discord — but the fan club aspect of Top Shot isn’t confined to the internet. Top Shot has started a “team captain” initiative, where a “team captain” for a group of fans — for instance, the Toronto Raptors — is given a budget of $5,000 to $10,000 to put together local events. “I applied to be a team captain,” Steve told me. He’s excited about that — he already gave away 16 game tickets on his own to other collectors so they could all go together. (Dapper threw in for food and drinks.)

“These are all strangers who I only know through Top Shot,” Steve says. “And everyone who went had nothing but amazing things to say, which made me feel really good because I’m definitely an introvert.”

Peressini told me that she’d hosted 15 Golden State Warriors fans at a game, and they got to meet Chris Mullin, who’d played for the team in the 1980s. “These are things you can’t get from upgrading to a suite,” Peressini says. “These are connections that we have with the league. These are perks you can only get through our products.”

Some of the collectors I spoke to wanted to see bigger rewards — so if you hold a specific set of Moments, maybe you get all of that team’s merch, or you get guaranteed tickets to certain games. Schwarz points out that his famously expensive Moment was one of 49 Moments made of that dunk — so maybe all of those 49 people could get to meet a player or something.

Of the current rewards, Doucet told me that things like game tickets might make the community happy but don’t erase the fact that a lot of people lost money. Doucet figures part of the problem is that the business model for sports is different than the business model for NFTs. “It’s been 100 years now [that] professional sports have been around, they’ve never been about a model of like, give something to your consumer and then make sure it holds value for them.” It’s likely to be an interesting few years for Top Shot as they figure out how to do that, he says.

Still, for at least one fan, the more enduring legacy for Top Shot was getting him into full-time NFT trading. When I speak to Libruary — his username — for this story, he’s in Bali. He’d quit his job. He’s thinking of moving to Portugal. He’s dabbled in a lot of projects, he says; he mostly mints NFTs to flip them. And it all started with Top Shot.

“I bought a LeBron James Moment for $30 and the rest is history,” he tells me.

When I spoke to Libruary last year, he’d been a sports card collector who liked that Moments were easier to display and more portable than his physical card collection. He’d even posted about his enthusiasm in a sports card forum in October 2020, where someone replied to his post by posting a GIF of a child tossing money from a window.

Libruary pulls that thread back up when we chat again this year. “I think that person was misguided when they posted that,” he says. “They probably should have looked into it a little harder and done a little bit of research, because that was at a time before NFTs were mainstream or anything. A hundred bucks in Top Shot probably would have got them a few grand.”

He might be right — but timing matters, as he knows. (It’s part of the reason Libruary quit his day job — meetings sometimes collided with the best times to trade.) But this highlights a core problem with NFT projects: if the early users are the ones who get the rewards, why bother coming in late?