NBA Player Spencer Dinwiddie's Contract Tokenization Plans Set to Move Forward
According to reports the New Jersey Net's star guard's plan to tokenize his NBA contract is getting the green light from the NBA after all.
Official word has not been released from the NBA, but Dinwiddie is moving forward come Monday as the issue preventing him from moving forward has been resolved.
Tokenize Player Contract
Player Option Issue
From what I am reading it seems the issue with the NBA's collective bargaining agreement and his plan to tokenize was the player option he has in the 3rd year of his three year $34.5 million contract.
Basically, if he was to exercise that option to try and garner and bigger and better contract after two years then investors of the token would benefit from that.
This caused issue with the NBA as that is considered "gambling" and it looks as if Dinwiddie was able to rectify that by removing the clause from the offering and making the token a flat bond on the contract amount.
Accredited Investors Only
The plan still needs to adhere to US securities laws so will only be available to those who qualify as accredited investors.
The token will allow Dinwiddie to raise the majority of his contract value upfront, less roughly $2.5 million which is essentially the proceeds amount on the contract that will be paid out to investors.
He is enlisting the Paxos Trust Company to provide escrow services and facilitate payouts to token holders using its dollar-pegged PAX stablecoin.
So basically he is discounting the future earnings from the contract and selling them now? But as a token?
Yeah, basically. Not sure it's the greatest move but he seems to be hell bent on tokenizing his NBA earnings so it could be as much about that too.
Sounds like he's a true crypto believer :)
Wow, this should be the start of many in the future, now we just need Lebron to do something like this.
Interesting to see if this becomes a trend...