NBA star Spencer Dinwiddie in talks with NBA to securitize his talent and launch STO on Ethereum ๐จ This article is 5 years old...
NBA star Spencer Dinwiddie in talks with NBA to securitize his talent and launch STO on Ethereum
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Updated: Nov. 25, 2019 at 4:25 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Brooklyn Nets guard Spencer Dinwiddie is creating a revenue-sharing platform allowing professional sports players to tokenize themselves as debt securities, starting with an offering of his own Ethereum-based โProfessional Athlete Investment Tokensโ (PAInT) as early as this week, ESPN reported.
As the platformโs first initiative, Dinwiddie intends to conduct a security token offering (STO) solely for Regulation D-qualified accredited investors, who must invest a minimum of $150,000 into the tokens.
Whatโs in it for investors?
In a similar vein to ERC-20 bonds issued by governments and corporations, the tokens will act as a securitized cash advance for Dinwiddie, who will raise $13.5 million if all of his PAInT tokens are bought. A total of 90 tokens will represent approximately 40% of his salary scheduled for the 2020-2022 period ($34 million in total).
In return, investors are to be offered a total return-on-investment (ROI) somewhere in the realm of 7.5%, and when the tokens reach maturity in the third year, 40% of Dinwiddieโs post-tax salary for the 2021-2022 period will be paid out to PAInT holders.
But unlike U.S. treasury notes and other fixed-return bonds, the PAInT tokens have a deal-sweetener. Dinwiddieโs ownership of a player option means the Mets may opt to extend his contract, upping the tokensโ yield to 10% or more depending on his salary increase (all contract extensions result in salary increases).
Dinwiddie, on the other hand, gets more than a yearโs salary in advance, $13.5 million in investment capital, that he intends to make outperform his debt obligations using โrelatively traditionalโ investment vehicles.
Will the NBA give the green light?
Dinwiddieโs PAInT is intended to serve as a proof-of-concept for a radical new investment modelโone that could become an industry-standard in sports, art, music, acting, and other industriesโand yet the plan must ultimately be given the stamp of approval from the National Basketball Association (NBA).
In late September the NBA reportedly rejected Dinwiddieโs plan saying it violated the terms of his deal with them, which stipulates players may not on-sell shares of their contracts.
But Dinwiddie, whose entrepreneurial ambitions have also extended to the launch of a line of shoes, seems to have found a workaround. The Los Angeles native has apparently pledged to back the tokens with $3 million worth of gold, cash, and Bitcoin, and is looking to lock up a further $9 millionโa sum that would nearly back the entire principal.
Dinwiddie appears confident that by repurposing the nature of the token the plan will come to fruition, potentially opening the floodgates to a vast, yet largely unexplored usage case for tokenized debt issuance.
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