Leading NBA player, Spencer Dinwiddie recently revealed that he wished to tokenize part of his contract on the Ethereum blockchain. He intended to raise $13.5 million from his three-year, $35 million contracts. However, his initiative was not received well by the NBA. Interestingly Crypto personalities stand in his support and consider it to be a revolutionary idea.
Change is Seldom Easy
The NBA on Friday has claimed that his plan to pledge part of his contact earnings for a security token violates the league’s collective bargaining agreement. Per a statement given to the New York Times, NBA said,
“The described arrangement is prohibited by the C.B.A., which provides that ‘no player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract,’”
Dinwiddie took to Twitter and gave a befitting reply and said that he had all the regards for the NBA. However, he is not assigning his contract.
Furthermore, he said that the news was disappointing and it hinders the development of a new asset under the assumption that a rule is being broken. He then said that he looks forward to understanding and also bring more fan engagement and liquidity for team owners.
As part of the DREAM Fan Shares platform, Dinwiddie had plans of building a company where any entertainer could tokenize their contract. Moreover, the entertainers could raise part of their salary to invest or else use it immediately. It is still not clear if the NBA spoke to Dinwiddie before providing the statement to the Times. However, the Brooklyn Nets guard affirmed that he had told the league about his intentions before they were publicly announced.
US Presidential Candidate, Crypto Personalities Stand in Dinwiddie’s Support
Notwithstanding the NBA’s unfavourable stance on the issue, Dinwiddie’s plan received massive public support. Presidential candidate Andrew Yang stated that the plan was pure genius. Yang has also been advocating a regulatory framework for cryptocurrency and blockchain.
Binance CEO, Cz agreed with Yang and people should be allowed to enter into mutually agreed commercially contracts.
Leading Lawyer, Larry Cermak lauded Dinwiddie’s efforts and said it is actually a bigger deal than people realize. He further said that the token is well thought of and would be more than a boring bond. Moreover, investors could get potential bonuses and a much larger payout in the third year of the contract. Furthermore, there is virtually no risk of non-payment. This is because Dinwiddie’s contract is guaranteed for three years. Even if he doesn’t play well or gets injured, he would earn money nevertheless. Plus, it becomes an incentive to play well, as Dinwiddie is tokenizing only a part of his contract.
Also, the benefits are for both sides- when he plays well investors benefit and even if he doesn’t investors still get their fair share of profits. The only problem is getting it issued under Reg D, making it available only for “accredited investors”. This further implies that an investment of a minimum $150,000 is needed.
He further expressed disappointment at NBA’s stance and said they have misunderstood the structure of his token. He is not assigning his contract rather guaranteeing a portion of the money he earns to the investors.
A crypto user with the handle “ Crypto Oracle” said that this could be the advent of a totally new sports league wherein fans have direct equity in the players and derive a portion of the league revenue.
Dinwiddie Partners With Tron for Charity
Earlier Friday, Dinwiddie revealed that he had partnered with the Tron Foundation and its CEO, Justin Sun, to donate 8.2 Bitcoin to charity by selling his game-worn shoes for the 2019/2020 season. He further assured that irrespective of his issues with his contract plan, he would do his bit and make the donation.
Do you think the NBA is being reasonable disallowing Spencer Dinwiddie from tokenising his contract? Share your views with us in the comments below!
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Coming from a physics background the unpredictability and intrigue of the cryptoverse attracted me to take a dive in this field. I am all eyes and ears for the latest trends in blockchain and crypto sphere. Whenever I am not writing or researching, I love to read sci-fi novels, play basketball and watch action movies. I strongly believe that blockchain and cryptocurrency will bring lasting transformations in people’s lives in the years to come. You can reach out to me at supriya [at] coingape.com.