NBA Top Shot and the Flow Blockchain

Dieter Shirley, cofounder of Dapper Labs, and Dan Boneh, Professor of Computer Science at Stanford University, trace the evolution of NFTs from CryptoKitties to the Flow blockchain. This video was recorded during a16z's NFT Summit, a conference featuring the best NFT builders and thinkers discussing the latest trends in NFTs, co-hosted with the Stanford Center for Blockchain Research. Find all the talks from the NFT Summit here: https://bit.ly/NFTsummit Check out a16z Crypto Startup School here: https://bit.ly/a16zCSS

• 0:15Speaker 2

  Dan Bonet, who you met earlier will be joined by Dieter Shirley, co-creator of CryptoKitties, creator of the Ethereum standard ERC 721, chief architect of the Flow blockchain and co-founder of Dapra Labs. So I will now hand it over to Dan to kick off the conversation.

• 0:33Speaker 1

  Yeah, thanks, Ariana. And uh welcome, Vieter, for joining us. Um so let's see. The first thing I wanted to ask you is uh since you you're kind of the uh creator of uh flow and uh uh the flow blockchain, maybe you could walk us a little bit through the flow origin stories, sort of all the way from CryptoKitties to uh where we are today, how did that come about?

• 0:56Speaker 0

  Sure thing. Uh thanks so much, Dan. It's uh great to be here and talking to you again. And uh hello to the whole uh whole audience listening. Um yeah, I mean, uh 2017, uh, you know, I worked for a company called Axiom Zen. Uh and we were always trying to make uh uh exciting new technologies um and uh and and just um you know creating new startups and then trying new ideas. Uh it was venture studio. And so uh in 2017, everybody was going nuts for crypto. Um but you know, we were we were a little disappointed that everything, everybody was uh raising money to build things, and so few people were building anything. Um and so we wanted to build something that that uh that people could interact with and play with right then and there.

• 1:41Speaker 0

  And um, and so we we looked at a bunch of different ideas before we finally settled on on creating crypto kitties. Um crypto kitties, of course, uh, you know, I think exceeded everybody's expectations of of what it could do. Um unfortunately we it also exceeded uh everybody's expectations of what Ethereum uh could handle. Um and so coming out of that experience with Crypto Kitties, we we we realized that there were sort of three important uh things that needed to uh be built um in order for consumer blockchain to be a reality. Um the first one, which we we thought we did a great job uh with our first swing uh was creating amazing content, something that appealed to people who weren't uh into you know financial uh you know uh ideas and um and for whom tokens are maybe a little bit too abstract, uh something tangible that they could understand and something fun.

• 2:35Speaker 0

  Um the second thing we realized is that we just needed to have a better uh onboarding experience. Um the number of people who were excited by CryptoKitties but couldn't get involved because they didn't want to install MetaMask or they didn't understand what the the 12 uh keywords for their seed phrase were, or um, they didn't want to upload their passport to coin uh uh Coinbase in order to be able to buy their crypto. Um that was a that was a huge barrier to adoption. And then of course the third thing was um that we we we felt we needed uh a higher capacity blockchain. Um we didn't expect that we were gonna have to build the last one because you know everybody on their dog was was uh proposing new blockchain um projects at that time.

• 3:21Speaker 0

  Um but of course the the most common way of of hitting blockchain scale was uh to use sharding. Um and I think sharding works well again if you're focused on the financial use cases. Um but we had a real vision for again more fun games, entertainment style products. And what we realized is that what Ethereum gave us and what Ethereum 2 is unfortunately going to be taking away from us is a single shared state space um where every smart contract can talk to every other smart contract um and and maintain those you know acid uh transaction guarantees that make the whole thing secure. Um and as DAP developers, building on top of a sharded blockchain seemed uh incredibly daunting to us. Building a smart contract that works, it doesn't have bugs is hard enough already.

• 4:08Speaker 0

  Having to deal with a sharded state space um and deal with asynchronous communication was a real problem. And so we designed flow to be unsharded while at the same time allowing for very large participation um and and maintaining that decentralization. Um and uh and and we did it by by sort of splitting the no the network into different types of nodes that have different roles, um, and which is sort of a different way of approaching blockchain uh design. Um and you know, it's it's up, it's working now, and we have lots of docs out if anyone has um wants more details into how that stuff works.

• 4:45Speaker 1

  And the sort of the NBA Topshot is sort of the largest application on the flow blockchain at the moment.

• 4:51Speaker 0

  Exactly. We we felt pretty strongly that you know there was no point in uh in sort of imagining that you know if you build it, they would come, right? That that time had passed, that just having a blockchain was enough. We knew that in order for people to want to experiment with something new, they need to see how it worked. Um they needed to engage with it. And so NBA Topshot um has been running on flow since day one, it's about a year now. Um, and uh it it shows what's possible on top of uh on top of flow. Um so

• 5:23Speaker 1

  maybe just in one sentence is to make sure everybody's on the same page. Can you just say in one or two sentences what is NBA Topshots?

• 5:28Speaker 0

  Oh, sure thing. Um so NBA Topshot um is a sports collectible uh experience. Um we take uh some of the most amazing uh moments in the game of basketball um and we capture those into limited edition collectibles. And so each of those uh moments is is captured as an NFT. Um and then we we do uh limited edition runs of those. Um some are you know very rare, uh, as few as 49 uh of a particular moment will be captured. Um and then some of those are much more common into the uh thousands or tens of thousands of copies. Um and so um, you know, and then you know, the fun part is is building up your collection and finding your favorite players and your favorite plays and um and you know, just capturing what what basketball means to you uh in in your collection.

• 6:15Speaker 1

  And sports collectibles are a really good example of an NFT. Um could you could you say a little bit about uh what was hard about building NBA Topshot? Like uh that's a very, very successful NFT that runs on the on the flow network. You did something, you did something right. What was hard about building NBA Topshot.

• 6:35Speaker 0

  Um well, I think the hardest thing about building NBA Topshot is that we started building NBA Topshot before Flow was done. Um so uh we we had uh we we had to start designing because we were building an app and a blockchain at the same time. And so, you know, we knew sort of broad strokes what flow was going to look like and and you know what it was capable of. Um but you know, the APIs of how you would interact specifically that you know, not all of those details were were nailed down. Um and so there are some things about NBA Topshot that if we were to uh rebuild it today, uh we would never we would never do it that way. Um and so um, you know, for example, you know, I think the the most uh obvious one is that there's a there's a very tight link between the Dapper wallet um and NBA Topshot. You there are no other wallets that work with NBA Topshot today and Dapper Wallet doesn't work with any other DAPs today.

• 7:25Speaker 0

  And of course, we're now having to, you know, do all the work to uh to separate those and and uh make the uh open connection um to uh to the rest of the ecosystem. Um but at the time when we were starting to build this, there you know, there was no definition of what that open ecosystem would look like.

• 7:43Speaker 1

  So the I guess also I imagine beyond that, uh the user experience, I imagine took quite a lot of work to design. Is did you have any kind of insights you can share with what does it take to build the user experience for for such a successful successful app?

• 7:55Speaker 0

  Well, I mean, that part is um, I mean, I guess uh I guess maybe for crypto people that is the most daunting part. But um, you know, I I think you know, we we we just brought in people who um had uh experience um and we already had several of them on staff who who had experience building high polished consumer-facing applications. Um and you know, in a lot of cases it's not uh it's not rocket science, it's just uh having the will to actually do the hard thing. Um, you know, and I think I think the the onboarding um uh into Dapper is probably the thing that is you know, where the complexity beneath the service is is so effectively hidden to the users that they don't realize what's happening. But um, I'm sure anyone who's ever run any kind of exchange or or uh uh um you know crypto onboarding and offboarding service knows that the traditional fiat world of finance and the crypto world um uh of tokens, they do not play nicely with each other.

• 8:53Speaker 0

  One of them has a presumption that every transaction is undoable. Um the other has the presumption that no transactions are undoable. Um and that opens uh just an enormous uh possibility for fraud. And so the the complexity that went into Dapper wallet, um, so that users can just show up with an email address and a credit card and start buying NFTs. Um and and then training them and uh for real money is is truly extraordinary.

• 9:19Speaker 1

  So I think actually a lot of people are really curious, like uh what would the negate the negotiations with the NBA were like, like uh how how the easy or difficult was that or how did that go?

• 9:32Speaker 0

  Well, I mean it's a big organization. They're you know, they're they're not uh they're not a scrappy startup willing to do anything, right? Like it obviously it took a long time, but one of the reasons we went with the NBA, um, you know, coming out of CryptoKitties, it was pretty easy for us to get meetings with people, IP holders who who were uh willing to consider doing something in the NFT space. Um and one of the reasons we loved going with the NBA, and we we signed that agreement back in in 2018. Um and so uh and it was because Because they were really, they were really committed to the long term. This wasn't just an experiment to them. This wasn't just something that they, you know, like a like a boost to the bottom line. They were really committed to the idea that we should take our time, we should create an experience that felt authentic to a basketball fan.

• 10:21Speaker 0

  We should have a long-term engagement so that what we were creating is something that people could have faith in over the long term. And they wanted to work with us because they saw that we had put together a team that was really committed to making sure that the fans had a great experience and that those collectibles were meaningful. And not just, you know, sort of, you know, putting these videos, uh, you know, just locking these videos onto the blockchain, but putting a whole uh great user experience around it.

• 10:50Speaker 1

  Yeah, and I think a lot of a lot of the fans are uh part of the reason why it's so successful is they actually get to engage with the players that uh of you know for the NFTs that they buy. This is like an amazing experience for the fans. So yeah,

• 11:03Speaker 0

  I I think I I would have never guessed that the players would have been as excited about it as they are. Um I mean, I guess maybe in retrospect it's obvious, but certainly early on when we when we talked to some of the players um uh and um you know, and and we'd hear reports, I mean I wasn't in those calls, but we hear reports from from our our team show the players you know demos of of the app before it had been released, and and you know, for me it was like great, it was just like we've captured the you know, that basketball culture, that basketball vibe, uh and the players are into it. But I I I wouldn't have guessed that the players would have been so excited about actually engaging and and trading in them. So yeah,

• 11:42Speaker 1

  and they actually interact with the fans, right? I mean, so you buy if you're a player and somebody buys your NFT, you actually engage with the fan, and that's actually uh great for both sides.

• 11:50Speaker 0

  Exactly. So

• 11:51Speaker 1

  that's part of part of the all the uh excitement about this. So uh since you you're like on the front line of this of this space, I have to kind of ask you um, what are the biggest challenges that did you see in the NFT space? Like what what would you like to have to happen to take it to the next level, or like what do you think deserves attention from the community? Uh what should the rest of us be working on? So what like what are the big challenges that you see facing us?

• 12:16Speaker 0

  Yeah, I think I think the legitimacy challenge is gonna be the hardest one. Um I think right now there's there's there aren't really enough. Um there hasn't been enough time for people to really know who are the teams that are like really committed to this, who are going to be, you know, have a multi-year uh record of creating supporting and growing these communities versus who is just sort of like you know, yoloing it and just trying to like you know capture the the latest trend. Um and so I think I think that that's that's gonna be difficult. I think that there is going to be be a period of time when there's a washout of of some of these these teams that maybe you know, maybe you could they didn't even necessarily have bad intentions, they just bid off more than they could chew and and didn't realize how how complex what they were they were implicitly promising to people really is.

• 13:12Speaker 0

  Um, you know, the good news is is that provided that the NFTs are on a good blockchain um are supported by open infrastructure, um at least the NFTs will uh continue to exist. But unfortunately, we even are seeing NFTs being released on sort of relatively close platforms. Um and uh it's it's hard to say what the future of those will be. Um and so I think I think that's a that's a really tough one. And then, you know, the the um uh the other thing that I think is is really challenging is um is just trying to figure out what the um uh trying to get the right balance between uh scarcity and and abundance. Um, you know, these things matter um because um, you know, most of them are one of a kind or very small number of of a kind.

• 13:57Speaker 0

  Um, but um, but that also is exclusionary. And and so trying to find that balance so that everyone feels like they can get some, they can they can engage in some way um without it be just you know losing it its it's uh its value as you know, this is something that uh very few people have, and that says something about me, I think is gonna be really difficult. Um and then on the technology side, it is again, I think that that it's it's interacting with the traditional finance world. Um not everyone wants to go in and out of uh in and out of tokens in order to engage with art. Um and so how do you make it so that people can get that aspect of it without necessarily having to be aware of the fact that there are there are uh these money life tokens involved as well.

• 14:45Speaker 1

  So part of your advice is when you when somebody buys an NFT, make sure it's actually on a reputable platform. So you really do have the permanence and the NFT can't be can't be stolen. Yeah. Um and I guess this this other point you bring out is really important, which is today, I guess to engage with NFTs is you have to deal with crypto, right? You have to get crypto tokens somehow. So you you can buy you can buy them, and you're asking if there's a better, if there's an easier way to do that. Yeah, is that is that one of the things? Yeah, I mean,

• 15:12Speaker 0

  I think I think the challenge is getting people in in a way that is authentic and easy. Um and those two things maybe are at odds sometimes, and and I think it's a lot of work to do to do both at the same time.

• 15:24Speaker 1

  Yeah, it makes sense. Um

• 15:26Speaker 2

  I'm gonna I'm gonna jump in, Dan. I'm gonna steal your your microphone metaphorically. Uh I want to make sure we get to a couple questions from the audience because once again, there are many. Um so Deanar, first of all, we're getting a lot of excitement around your background. So curious if there's a story there or if you can tell us what that's about.

• 15:45Speaker 0

  Um so this is, yeah, so this is one of the pieces of um uh of concept art uh for NBA Top Shot. Um we work with uh an exceptional artist who's created a number of these um and uh and and yeah, so this is uh I think it's a it's a beautiful thing. And um I I don't know if you can see it entirely, but it I think it really does capture uh sort of that that basketball vibe and the top shot vibe.

• 16:10Speaker 2

  Awesome. Very, very on-brand for you. Perfect. Um another question by being on your own blockchain, don't you lose the opportunity for interoperability with the innovation taking place on open networks? For example, using Dapper Labs NFTs in the metaverses like Sonyum space or decentraland.

• 16:31Speaker 0

  So I all of the um all of the metaverses right now um have the ability to sort of plug in for multiple chains. Um, you know, whether or not they choose to is going to be up to them. Um but yeah, it was it was absolutely a difficult decision. Um we loved the fact that we were part of this bigger ecosystem and and crypto kiddies benefited enormously from that. Um but at the end of the day, you know, Crypto Kitties broke Ethereum with sort of you know 10,000-ish users per day. Um, and you can't build a consumer company at that scale. It's it's it's simply untenable. And so there was really no choice that we needed to go somewhere else. And so then the question was, well, what which of these new platforms is gonna have the attributes that that we need to build on the kinds of experiences we want to build?

• 17:20Speaker 0

  Um, and and the answer ended up being the one the one we build ourselves.

• 17:25Speaker 2

  Yeah, so maybe a derivative question or a related one is um what kind of apps do you see as a good fit for flow?

• 17:33Speaker 0

  Um yeah, I mean, I think that's it, that's an excellent question. So, you know, um right now, you know, flow is flow is very young, um, and it's a it's a it's an early stage protocol. Um, and so we're working really closely with people who want to bring apps to flow. Um, and I think that you know the the vibe that we want to create and the the teams that we'll be able to spend the most time with and and provide the most support to are the ones who really are doing something that is more consumer-oriented, um, really appeals to people who aren't necessarily into crypto, although maybe it appeals to the fact, you know, some of the people who are crypto curious and and haven't gotten into it yet. Um and which really uh focuses on creating value for the user.

• 18:20Speaker 0

  Um and and what we mean by that is is they're they're trying to create things that people will not just want to sell, but also buy and own and hold. Um and I think that um really having that focus on making something that that people really you know want to hold on to in the long long run. That's that's a more sustainable for for a business, um, but it's also just makes it a much better experience for all the users as well.

• 18:47Speaker 2

  Right, that makes sense. Um last question, unfortunately. I think we we have enough for all day, but um let's see, one last one. Uh any main learnings from building ERC 721, any regrets on what should or should not have been in the standard?

• 19:09Speaker 0

  Yeah, so uh I mean we wrote ERC 721 concurrent with CryptoKitties. Um and uh and you know, obviously we learned a lot building crypto kitties. Um most of what you know that ERC finalized after CryptoKitties launched, and most of it was fine. The one that that I was pushing for, and and and I felt like at first the community, most of the community was pushing against it and and maybe it was the right thing to do in order to rush

• 19:37Speaker 1

  uh

• 19:37Speaker 0

  to in order to get uh resolution quickly. But that was the question of metadata, um, and having like a standard way of saying, well, well, what is this? What is this piece called? What is its, you know, does it have a serial number? Does it have uh an artist associated with it? What is it is there a standardized way to get an image associated with this thing? Um And that was, it was tough. And I mean, the reason why we threw it overboard was just it was a classic bike sheddement where everyone and their dog had ideas about how that would work. And it was hard to sort of find that one minimum viable version of that that everyone could agree on. But I think in retrospect, it has led to some confusion and complexity in the NFT space that perhaps we could have could have avoided.

• 20:27Speaker 2

  Got it. Well, fortunately, NFTs are flourishing regardless. So clearly you made a huge contribution to this space with that one. So I think we all uh we all appreciate it.