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Spencer Dinwiddie Converts His NBA Contract into Digital Token Investment Vehicle

Spencer Dinwiddie NBA Brooklyn Nets

In a groundbreaking move for the NBA, Spencer Dinwiddie of the Brooklyn Nets is starting his own company to convert his new contract into a digital token investment vehicle.

Dinwiddie, who’s set to begin a three-year, $34.6-million extension he signed with the Nets last December, will receive payment up front in a lump sum – a first for an NBA player. In layman’s terms, Dinwiddie is essentially treating his new contract as an investment vehicle in order to secure himself long term by giving up some financial future in return for a smaller, immediate payment.

What Exactly is Tokenization?

A “token” is a term common in the digital currency world in which things can be turned into digital assets to be distributed and shared, similar to stocks from companies on the stock market. By tokenizing his already lucrative deal, Dinwiddie is transforming his extension into a type of bond where he will pay investors back principal and interest which will be covered by what he’s owed by the Nets.

The 26-year-old’s decision could have a major ripple effect if it’s successful and will likely lead to more athletes deciding to tokenize their contracts in the future, both in the NBA and among the other major North American professional sports leagues. It could also have a massive impact in future NBA collective bargaining agreement negotiations if more players decide to follow Dinwiddie’s path.

By acting as a trailblazer in contract tokenization, there is certainly some risk involved in Dinwiddie’s new arrangement. Right now, though, the potential benefits significantly outweigh the drawbacks in yet another example of how cryptocurrency is permeating the traditional financial world.