January 13, 2020

Yesterday, Brooklyn Nets point guard Spencer Dinwiddie launched his token-based investment vehicle, and every kid who once dreamed of being an NBA GM said, "actually...I'll pass."

It's that complicated. Last September, Dinwiddie revealed a plan to create a blockchain-based investment platform called DREAM Fan Shares. The goal was to sell 90 "SD8" tokens backed by his contract (a three-year, $34 million deal), allowing Dinwiddie to collect $13.5 million upfront.

Think of the tokens as a three-year "Spencer Dinwiddie bond" that will pay out a 4.95% base interest each month.

Only accredited investors can get involved; the minimum payment is $150,000.

Why invest? Warren Buffett couldn't find a better value stock than Dinwiddie. He's one of the most improved players in the NBA, and his contract is "regarded in league circles as a bargain given his production," the NYT writes. He's currently in the running for the All-Star Game.

The NBA fought back

After reading a few Reddit threads on blockchain, the NBA decided portions of Dinwiddie's plan violated its collective bargaining agreement, which states 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."

The league threatened to ban Dinwiddie for what he called "some fun stuff with his contract."

When Dinwiddie made his contract less fun, the two sides reached some level of understanding. But the NBA released a statement yesterday saying it still needed to "determine whether the updated idea is permissible under league rules."

Zoom out: What Dinwiddie is doing isn't totally new—after all, David Bowie issued "Bowie bonds" in 1997 using the singer's current and future revenue as collateral. But the move does show how today's NBA players are pushing the league's boundaries. And if successful, Forbes writes, the Spencer Dinwiddie bond would "revolutionize the way professional athletes own their own brands and intellectual property."