Brooklyn Nets Star Spencer Dinwiddie To Tokenize His NBA Contract On Monday
It looks like Brooklyn Nets’ guard Spencer Dinwiddie’s contract will be tokenized after all, even if the NBA pushed back the player’s plan to come up with a tokenization platform especially developed for entertainers.
— Spencer Dinwiddie (@SDinwiddie_25) January 10, 2020
The Athletic reported Dinwiddie is going to issue shares from his contract starting on January 13. The decision comes a few months after his plan to create a tokenization platform that issues debt instruments according to future earnings for entertainers, was rejected by the NBA.
Dinwiddie Announced the Tokenization Last Year
In 2019, Dinwiddie announced he wants to tokenize his $34.5 million contract of 3 years in order to raise the sum of $13.5 million in year one. The objective was to raise an upfront lump sum of his contract’s value to give token holders payouts throughout the entire season.
Dinwiddie’s Plan Barred
In September 2019, it was said by the basketball league that Dinwiddie’s tokenization plan is barred, as the NBA players’ collective bargaining agreement doesn’t allow it to take effect. Forbes reported the contention point was the eventuality of Dinwiddie executing an option in year 3 of the contract, if he promised investors major dividends for signing a contract that pays more. Dinwiddie said this clause being removed and a flat bond being offered instead would help him go on with his plan, meaning accredited investors are going to be offered the option to buy tokens for a $150,000 minimum buy-in fee, which will make his contract more valuable to begin with.
Paxos to Provide Payout and Escrow Services for Dinwiddie
Dinwiddie decided to go with Paxos Trust Company for the escrow and payout services, with the PAX stablecoin to be used. Even though Dinwiddie's spokespeople, Paxos or the NBA hasn't made any comments on the matter, Dinwiddie tweeted on Friday that the launch of the Spencer Dinwiddie bond will take place on January 13. As reported by Athletic, the NBA is looking over his plan, so Dinwiddie may not actually be given the green light for going live on Monday, as he wants to.