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An NBA superstar just made security token history

Spencer Dinwiddie is changing the NBA and professional sports, and it has nothing to do with his on-court performance.

The All-Star point guard for the Brooklyn Nets set out to make history and tokenize a portion of his $30 million-plus contract, as I wrote about last October.

Under the original deal, investors could buy Dinwiddie’s SD8 coins and earn interest plus capital gains if the superstar were to sign a new contract in the next few years. But the NBA had major issues with this—it claimed the offer was a form of gambling and illegal under league rules. If Dinwiddie continued ahead with his plan, the NBA threatened to terminate him.

Over the course of seven meetings (four in person and three conference calls), the two sides came to an agreement… 

On January 13, the new SD8 coin was made available to accredited investors only (for now) for $150,000. SD8 investors will earn 4.95% per year, paid out on a monthly basis, over the course of three years. At the end of the term, investors will receive back their original $150,000 investment.

Why is this such a big deal? And why even bother with anything like this?

Tokenization—fractionalizing ownership of an asset—is great for both the issuer (Dinwiddie in this case) and investors. For Dinwiddie, he receives money right now ($13.5 million if all 90 coins are purchased), instead of getting paid as his contract plays out. It gives him more money in his pocket and freedom to spend, save, or invest sooner rather than later. 

For investors, it’s a chance to own a new asset class and earn solid income. The token’s bond-like structure will pay out 4.95%—over 150% higher than the average bank is paying right now. And after one year, the coins will be freely tradable by all investors.

There’s risk to any investment, but Dinwiddie has a valid contract with an NBA franchise backing the SD8 coin. If he can pull this off, it’s a game changer. This opens the opportunity for all kinds of tokenization across sports salaries (think NHL, NFL, NASCAR, MLB, and more)… But it doesn’t stop there. What about movie stars or their films?

As tokenization becomes mainstream, it will give investors access to new investments that previously didn’t exist. Stay tuned to Token Tracker for the latest news and opportunities in this new exciting asset class.

My best,

Daniel Creech
Research Analyst, Curzio Research


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