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Spencer Dinwiddie (@SDinwiddie_25), Brooklyn Nets NBA player, is tokenizing 40% of his $34M 3-year contract and is also releasing a platform for other athletes to do the same. I think this is actually a bigger deal than people realize. Or maybe I'm just excited about NBA & crypto
The token is actually really well thought out. Investors will receive monthly payments plus interest. Dinwiddie gets more of his contract upfront. Now that would be just a boring bond. But, investors also get potential bonuses as well as potentially a much larger payout in year 3
If he opts out after year 2 and signs a much larger contract, investors collect that upside from what he earns in year 3. On top of that, NBA players earn pretty sizable bonuses for both individual (All-Star selection) and team achievements (playoff appearance).
There is also virtually no risk of non-payment. Dinwiddie’s contract is guaranteed for three years. If he doesn’t play well, or even if he gets a bad injury, he still earns the money no matter what. The only way he loses his contract is if he does something stupid off the court.
The incentives are therefore lined up well for both sides. If he plays well, investors earn the upside of bonuses and the new contract. If he doesn't play well (or gets injured) and doesn't do anything stupid off the court (very uncommon), investors still earn interest on top.
Dinwiddie is also incentivized to keep performing well because he is not tokenizing his entire contract - only a portion. And he also wants to sign the best contract possible in two years. He could theoretically (but unlikely) sign a max contract in 2 years worth $100M+
The biggest problem that I see is that he is issuing it under Reg D, which means that it’s only available for accredited investors. The minimum investment is $150,000. This is obviously not his fault. If this was available at a smaller size, I would probably invest a bit myself.
I could definitely see other athletes doing the same soon. I really think this could become a new asset class for investors to bet on players’ careers. But it would have to be opened up for non-accredited investors, divided in much smaller portions and traded with liquidity.
The NBA has now come out and said that "the described arrangement is prohibited by the CBA [Collective Bargaining Agreement]." They are referring to 2.13d, which says: "No player shall assign or otherwise transfer to any third party his right to receive Compensation" 
This is a disappointing reaction from the @NBA to say the least. But I think they are misunderstanding the structure of @SDinwiddie_25's tokens. He is not assigning his contract. He is guaranteeing that the portion of the money that he earns will be distributed to the investors
Dinwiddie plans to meet with NBA's officials to explain the change in interpretation. But I'm not totally sure they could even stop him from using the money he earns in any way he wants. In any way, it will be interesting to follow this in the coming weeks.
This is similar to Airbnb and Uber. He is using a loophole that will be difficult to enforce
Exactly as I thought, this is just starting to get interesting. Spencer cleared this with his lawyers. What NBA doesn’t realize is that they are just going to bring more attention. When that happens, one of the stars will do the same to make a statement
