Sweet NFTs: MLB remains focused on creating collectibles with Candy Digital, as multiple leagues are in the market (2024)

While the cryptocurrency market is still reeling from the bankruptcy of FTX and the struggles of other exchanges, collectible NFTs could be on the upswing. Decrypt, a leading publication covering the crypto and NFT industries, reported that NFTs surged to $2 billion in transactions in February — an astounding increase of 117% from January and the highest since the May crash of the Terra exchange that kicked off the crypto implosion of 2022. In March, Decrypt reported it came in at $1.95 billion in transactions, just a 4% dip from February’s surge.

Candy Digital is an NFT partner with Major League Baseball, signing their first deal together in 2021, and its recent sales point toward that surge. The company said in the past five weeks, it’s sold out all five of its collections:

■NFTs commemorating the first hits of Cardinals left-fielder Jordan Walker (118) sold out in an hour and Yankees shortstop Anthony Volpe (100) sold out in a minute.

■Plays of the Week digital collectibles packs (think baseball cards but for plays, not players) both sold out, with the April 3 drop going in five minutes and the April 10 drop lasting 15 minutes.

■MLB Showstopper player packs sold out within five minutes on March 29.

Candy Digital CEO/COO Scott Lawin said the takeaway from these quick sellouts isn’t as much about speculation, as what happened with cryptocurrencies and the NFT boom in 2021, as it is about collecting.

“What that says to us is your fans and customers and collectors are much less focused on the vagaries of the cryptocurrency market, and they’re much more interested in what they see as the future of collecting and the future of connecting with the teams, with the athletes and with the stories that they love,” Lawin said. “The collector mindset around opening that pack, that digital pack of icons, that mindset of having a collectible that commemorates your experience at a game or an important moment in sport, that really is independent of where crypto trades.”

This is what Kenny Gersh, MLB executive vice president, media and business development, envisioned when the idea of blockchain-based tokens like NFTs first began to intrigue him in 2007-08. In 2018, MLB launched MLB Champions, an early NFT mobile game from blockchain developer Lucid Sight (it also issued NFT tokens for the Dodgers). In Champions, you played with little bobblehead-style characters, tied to third-party wallets like OpenSea and MetaMask. It shut down in 2020, as it struggled to gain traction in the casual market (one of the most challenging to crack in all of gaming). One learning Gersh took away from it was that people didn’t want to deal with wallets for their NFTs.

“We didn't quite know what the market sort of wanted yet, or fans weren't quite ready for it. So that didn't really have mass success, but we learned a lot about it,” Gersh said. “From that experience, I learned sort of what the potential was for creating these types of assets. And then I think what we've been doing with Candy is sort of slowly building that, those building blocks of fan adoption and giving them an easy way to buy digital assets.”

The big takeaway from MLB Champions for Gersh: Don’t tie assets to wallets and cryptocurrencies. Candy Digital uses the Palm blockchain (which takes Ethereum), but it has its own infrastructure for storing tokens without third-party wallets. Those wanting tokens can also make purchases with a credit card, “buying things the way they would normally buy baseball cards or other collectibles,” Gersh said.

Early investments, future payoffs?

Gersh is a “big believer” in Web3, what industry folk see as the next evolution of the internet, where blockchain technology helps secure not just currencies and items but also enables users to take them from one region of the web to another (including virtual worlds like the metaverse). MLB and companies like Candy Digital, Sweet and Ticketmaster are experimenting with ways to turn tickets into NFTs, which fans could use as collectibles, not just to show they were at a game, but also enshrine with memorable moments (like Volpe’s first hit, especially should the touted Yankee become a Hall of Famer one day).

But take this idea further and attach those NFTs to a physical good, as Kolex does with its T-shirts.

“I think there is a future where token-based or token-gated access to merchandise and experiences and content will become more mainstream and important,” Gersh said. “So if you are a holder of a certain number of tokens, and by tokens I don't mean cryptocurrency … we can then tell that, OK, you now have a digital wallet that has these particular tokens or NFTs. And for that we’re gonna reward you with a free month of MLB.tv.”

Leagues and teams could also do this to give away other merchandise in collaboration with other brands, using the NFT tickets as a special incentive to bag a limited item. And this is something Candy Digital is hoping to do in the future as well, blurring the lines between the digital token and a physical item.

“Our digital ticket products are a great example,” Gersh said. Those are commemorative tickets for folks who go to certain MLB games. Ultimately, that digital ticket should be something that can unlock an experience in the stadium. It might get you a discount on merchandise and over time, for folks who are recording their participation by going to games, give them special rewards of digital rewards as well as physical rewards.”

One day, go to enough games and check in with your NFT pass, and you might get not only a signed Volpe collectible token, but a picture as well. These are the kinds of experiences sports leagues and companies are looking at for the future.