NBA Professional Goes Ahead with Tokenizing His Playing Contract

Brooklyn Nets point guard Spencer Dinwiddie has announced this week that he plans to go ahead with the launch of his token-based investment tool despite NBA’s threat to ban him from the professional basketball league.

According to several reports, the star bastketball player will launch his token-based investment tool on January 13th.

“The Spencer Dinwiddie bond launches January 13th. I’ll also be taking 8 fans to ASW with me. #NBAVote,” he tweeted on January 10th. The bond will be issued with the help of security token platform Securitize, whose CEO Carlos Domingo announced the partnership on Twitter.

Initially, the basketball star player revealed his idea back in October 2019, stating that he wanted to launch DREAM Fan shares – a blockchain-based investment, where he would sell 90 tokens called SD8 coins.

This tool was developed with the goal to let Dinwiddie’s fans own a portion of his contract via the DREAM Fan Shares. This way, Dinwiddie would be able to digitize part of his contract and the tokenized shares would be then made available to fans seeking to increase their stake in the player’s career.

Each coin represents a tokenized share in his $34 million contract. Following that, Dinwiddie would be able to collect up to $13.5 million of his guaranteed three-year agreement without having to wait until the final years of the contract. Essentially, the agreement provides him with a new age business loan.

However, the NBA had not approved of this strategy, citing breach of the NBA players’ collective-bargaining agreement. It is further explained that the third year of his contract was optional, which meant that investors would gain more in dividends in 2021 if Dinwiddie decided to pursue a higher-paying contract elsewhere.

Over the past three months, Dinwiddie has had several discussions with the NBA’s legal team and the Nets player has eventually decided to remove the initial promise of potentially higher dividends in the third year.

Following the revised proposal, Dinwiddie will now sell his securities-based SD8 tokens, which can’t be traded for a year, for $150,000 apiece to verified accredited investors under SEC Regulation D, Rule 506 (c).

The SD8 coin will be a three-year bond with a monthly 4.95% base interest with the full principal paid out at the end of the period upon maturity in a bullet payment. If everything follows the schedule, the investment period will start with the launch date and ends on February 10th, with the bond notes maturing and paying out in full three years later.

However, it remains unclear whether the platform will indeed go live as soon as specified, becuase the league is still reviewing the revised proposal and his previous attempts at launching his own token and platform had been thwarted by the NBA.