Spencer Dinwiddie, point guard for the Brooklyn Nets, is reportedly planning to tokenize part of his $34 million contract and turn it into a blockchain-based bond in a first-of-its-kind deal, according to sports website The Athletic. The 26-year-old, who recently signed a three-year extension to his contract, will sell off a portion of his contracted salary to token holders, which will guarantee him a lump sum up front. The move is an extension of the asset tokenization movement that has grown over recent years to include property, movies, and even the moon.
— Spencer Dinwiddie (@SDinwiddie_25) September 13, 2019
NBA Salary for Everyone!
Dinwiddie, who signed for the New York-based team in 2016, will apparently set up his own company and register it with the relevant authorities to allow him to sell securities, something that already puts him one up on many ICOs that have infected the crypto world over the past three years. The portion of the contract for sale will be converted to tokens and sold to investors, who will receive the amount of Dinwiddie’s salary, plus interest, that corresponds to their holdings. This benefits Dinwiddie, who gets a lump sum up front rather than having to wait for his salary to come through, and benefits investors who receive a chunk of their outlay back, with a little extra on top, every time Dinwiddie gets paid. The Athletic claims that Dinwiddie, who calls himself a “tech guy with a jumper” on Twitter, will invest this lump sum, which, as long as it pays out more interest that he has to pay to token holders, could represent a financial masterstroke.
Fad or the Future?
Dinwiddie is one of a number of individuals and companies looking to make the most of the ability to tokenize and sell off an asset; media financier Vision Tree is working with tZero to tokenize rights to a film about the life of Atari founder Nolan Bushnell, PO8 is tokenizing treasure from shipwrecks, and the Diana Blockchain Project even plans to try and tokenize sections of the moon. In the grand scheme of things, an NBA player’s salary on the blockchain doesn’t sound so crazy after all.