3 min read
As the coronavirus keeps him off the court and in self-isolation, Spencer Dinwiddie, the basketball player who in January tokenized his contract with the NBA, is using his clout to push his fans into the arms of a licensed decentralized lending service, Cred.
Through the partnership, announced today, NBA fans can earn up to 10% interest on cryptocurrencies they own, among them Bitcoin, Litecoin, and Ethereum, from the Spencer Dinwiddie & Cred partnership website. Interest can be paid in fiat or cryptocurrency.
The partnership is no different than Cred’s usual offering. Stake some crypto, and the company will turn it into cash and loan it out elsewhere. Users receive the interest on the principal—as well as their original stake—minus a cut taken by Cred and any partnered company, such as the Litecoin Foundation, TrueUSD, and Bitcoin.com. Cred builds the system and handles the legal compliance and customer service.
The difference here is that it’s integrated directly into Dinwiddie’s fan page, and that Dinwiddie’s cut goes toward the Dinwiddie Family Foundation, a charitable fund that provides college scholarships to disadvantaged and at-risk youth.
Dinwiddie, who in January tokenized his NBA contract for the Brooklyn Nets on the Ethereum blockchain, said in a statement that he hopes to “educate my fans on the power of cryptocurrencies and blockchain while they earn interest on their digital assets.”
That includes providing his own real-time response to the current economic downturn. “Tried to tell y’all,” he tweeted today.
The basketball star, 26, is currently in self-isolation after several members of his team, including Kevin Durant, tested positive for COVID-19. Following outbreaks within the league, all NBA games have been postponed indefinitely.
Dan Schatt, CEO of Cred, told Decrypt that crypto “can be very insular.” Dinwiddie, a world-famous athlete who’s knowledgeable about blockchain, “is the perfect spokesperson here. He's really the guy pushing the envelope...in most of professional sports,” he said.
Schatt is quick to point out that Dinwiddie is “going to be educating people on stablecoins,” which are much less volatile than cryptocurrencies like Bitcoin because they are pegged to fiat currencies. Schatt says the player isn’t pushing people toward investing in Bitcoin, the cryptocurrency whose price last week was cut in half.
“I think he's being very, very responsible in how he's educating his fan base,” said Schatt. Dinwiddie is “making it easy for his fans to get educated [and] get access.”
Nonetheless, stablecoins are something of a gateway drug to other cryptocurrencies. Stablecoins, which can generate three to five percent in interest on Cred, can be traded for Bitcoin, which can earn interest rates of up to 10%.
Using stablecoins to entice NBA fans into buying riskier and more volatile cryptocurrencies isn’t irresponsible, he said, because, though unfortunate Bitcoin holders lost half of their money last week, cryptocurrencies will weather the storm better than other assets, like gold or oil. “I think this store of value argument is real and is responsible and is factual,” he said.
If Dinwiddie’s hoop dreams came true, why can’t Cred’s?
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