NBA Star Spencer Dinwiddie Wants To Tokenize His Contract So That It Becomes ‘Recession-Resistant’
On Sept 13th, it was reported that Brooklyn Nets point guard Herbert Spencer Dinwiddie plans to convert his $34 million contract into digital tokens. The move permits the NBA player to receive a payment as investors purchase the digital asset. Spencer Dinwiddie can lose out on some future financial gain to pay investors. However, the payment offers the Nets point guard the possibility to speculate his earnings elsewhere.
Nevertheless, there's a method that allows professional players to tokenize their contracts while increasing their net worth at a similar time.
Dinwiddie's venture comes in multiple parts: there's his new investment platform for sports lovers and speculators, DREAM Fan Shares, wherever individuals should buy a replacement form of debt security, the professional athlete investment token (aka PAInT). The first-ever PAInT offered is Dinwiddie's own, the SD8, that's designed on the Ethereum blockchain. The investment round opens Oct. 14 at $150,000 for each one to authorized investors. Investors can receive monthly payments—a portion of Dinwiddie's pay and interest—beginning in Gregorian calendar month.
“The player option allows me to, hopefully, sign a lucrative deal in my prime, before retirement,”
“If you're in a situation where you've played to a level where you can make more money, then you opt-out and you make more money. And if you play poorly, then you opt-in and take the money that's scheduled to be on that piece of paper. That's the way the NBA works—it guarantees a floor for you.”
While Dinwiddie's concept is clear, he points out that his token and his scheduled payments from the Nets, which can keep an equivalent of whether or not or not the market crashes, which makes us deal with less risks at hand.
Athletes Keep Going Broke
News of professional athletes filing for bankruptcy is no longer shocking. 60% of NBA players are in money distress within 5 years of leaving the league, 78% of NFL players go broke after 2 years once the expiration of their final contract, as reported by CNN. Also, CNBC writes that reckless defrayal is one amongst the explanations why skilled athletes go bankrupt.
The tendency to blow it all, combined with the lack of financial education are excellent reasons why obtaining a lump sum payment might not be a wise call for several professional players. However, players will safeguard their earnings by tokenizing their contracts and then investing in good contracts.
Dinwiddie believes that players – and different people in several industries – can stay a lot of financially secure within the long run if they're ready to build a business around their efforts. Using a blockchain-based platform would help assure investors of what they're buying into, he says that he thinks a blockchain is more transparent and is much more efficient.