NBA Botches halts NFT launch on Ethereum due to protocol issues

Some bugs caused NBA fans to not get the NFTs they were entitled to, but the league said it would compensate them.

The NBA’s plan to give away 18,000 free NFTs to fans has run into problems.

The basketball league launched a new NFT collection called "The Association" yesterday, which was designed to provide exclusive NFTs to the earliest members of the NBA Discord server. Unexpectedly, a security vulnerability appeared in the collection's smart contract: the computer code that enables NFTs to be created and traded led to users minting NFTs unfairly and clearing the collection in about an hour.

The NBA acknowledged the loophole yesterday and said it would work to resolve the issue for its fans. Today, the league announced that it would increase the number of NFTs in its collection from 18,000 to 30,000 to ensure that everyone who should receive one will get one.

NFTs, short for "non-fungible tokens," are unique tokens used to represent ownership of digital assets, such as art and other types of collectibles. In this case, each association NFT represents an NBA player: 75 NFTs from 16 different teams, for an initial total of 18,000 NFTs. NFTs are "dynamic" and will change and may increase or decrease in value, depending on the real-life performance of the players associated with them.

Each NFT will be reserved for early members of the NBA Discord server, which just launched last Friday. These members are given access to an "allow list" (another term for a whitelist) that will reserve one free NFT for each Ethereum wallet address registered on the list.

But that promise to fans was undermined by a bug in the association’s smart contract that allowed whitelisted users to access other wallets that they were not originally allowed to use.

The contract also didn’t properly record the number of NFTs per wallet. “If the contract was in place, he could mint the entire series of NFTs in one transaction,” a Twitter user said on Wednesday, providing an overview of the code.

This BUG caused some users to directly mint the NBA NFTs they wanted. Some users minted more than 100 and then quickly sold them on the secondary NFT trading market OpenSea for more than 0.30 ETH (about $1,000 at the time).

The NBA paused the drop of the NFT more than an hour after it was released after realizing their smart contracts were being exploited.

However, this isn’t the NBA’s first use of NFTs. NBA Top Shot, which was released as NFTs on the Flow blockchain, gained notoriety last year but helped to drive mainstream attention to sports NFT collectibles. While there’s no explicit relationship to Top Shot in the NBA’s latest NFT, the league has promised some additional rare association NFTs to Top Shot collectors.

Despite yesterday’s bug annoyance, the NBA appears ready to move forward with its plans for the Association’s NFT collection. “We have identified wallets on our allowlist that were unable to mint NFTs yesterday and will be airdropping NFTs from The Association’s collection to those fans,” a representative from the NBA announced in its official Discord server.