NBA Player tokenizes contract in light of coming recession

Oct 18, 2019 | Finance | 3 comments

NBA star, Spencer Dinwiddie has chosen to play it safe by tokenizing his contract ahead of what he believes is an inevitable global recession. According to Dinwiddie, the economic data available, especially in the United States, is a logical reason for anyone to avoid keeping their funds in any of the correlated mainstream banks. You can consider this a serious issue when even an NBA player tokenizes his contract in light of a coming recession.

Some of the factors noted by Dinwiddie:

  • United States’ $22 trillion debt
  • Worldwide hyperinflation
  • Lower interest rates
  • Fed’s potential quantitative easing

An Alternative Kind Of Money

From the beginning, Bitcoin was described as an alternative kind of money. Many of the early adopters believed, and still believe, that it is not just an alternative kind of money, but a better kind of money. Ten years down the road, the entire cryptocurrency industry has grown beyond just Bitcoin. Many other cryptocurrencies have been created through a process known as tokenization.

What we have now are ways in which value can be stored using blockchain tokens, to the point that an NBA player tokenizes his contract in light of a coming recession. These tokens are governed by decentralized protocols that are not affected by the same indices that govern fiat money. So, if Dinwiddie is talking about using cryptocurrency tokens to protect himself from the usual losses that are associated with recessions, then we should probably listen up.

Dinwiddie’s contract tokenization exercise would see him offer his $34 million 3-year contract extension to the public. The extension was signed last year, and he plans to offer it in the form of blockchain assets for investors to buy into. This will come in multiple parts as an investment round that opens on 14th October 2019.  The contract is broken down into pieces that are worth $150,000 each for investors. This will offer investors the opportunity to receive part of Dinwiddie’s salary, beginning from December 2019.

How Tokenization Is Growing In Popularity

This is similar to the typical crowdsale and tokenization exercise that has been made popular by start-ups in the blockchain industry. The funds raised will imply that Dinwiddie receives his contract pay upfront for his personal use. Holders of his token will on the other hand receive a share of his salary, plus any bonuses that may accrue as time goes by.

The concept of tokenization is gaining ground and becoming more popular. It is a style of investment that a lot of people expect to grow in popularity in the near future. This process offers individuals across the globe an opportunity to own parts of assets that may have never been accessible to them. You can be in Asia and own part of a building in Europe without needing to visit the location or go through complicated legal procedures.

The smart contract of blockchains have narrowed down processes, creative a more inclusive ecosystem in the investment market. Before now, who could have imagined owning a part of an athlete’s contract without being a member of his legal team? Well, here we are, and Dinwiddie has put up his contract for public ownership.

Perhaps, if Dinwiddie’s prediction, which is already public knowledge, comes to pass, and the global economy slumps into an expected recession, then this will be remembered as a very smart move. An NBA player who tokenized his contract in light of a coming recession.

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