Compare / Block (Square) vs Dapper Labs
AT A GLANCE
FUNDING HISTORY
Block (Square)
Dapper Labs
BUSINESS MODEL
Block (Square)
Block makes money across several business lines. Square (the seller ecosystem) charges merchants a flat percentage per transaction — 2.6% + $0.10 for in-person payments, higher for online.
Cash App takes a fee on instant deposits, Bitcoin trading, and Cash App Pay transactions. Afterpay (acquired for $29 billion in 2022) earns merchant fees on buy-now-pay-later transactions.
TIDAL is the music streaming service (acquired from Jay-Z). Block also earns Bitcoin revenue — Cash App is one of the largest Bitcoin brokers in the US, though margins on BTC trading are razor-thin.
Dapper Labs
Platform and marketplace — Dapper Labs builds NFT products and earns revenue from primary sales (minting new NFTs and selling them to users), marketplace transaction fees (5% on peer-to-peer trades), and licensing fees paid to sports leagues for using their IP. The company also built the Flow blockchain, which it controls and operates.
Revenue is heavily tied to NFT trading volume and new user acquisition. The licensing deals with NBA, NFL, UFC, and LaLiga give Dapper Labs exclusive rights to create digital collectibles from official content — a massive competitive moat when the market is hot, and a significant cost burden when the market cools.
HOW THEY STARTED
Block (Square)
The origin story starts with Jim McKelvey, a glass blower in St. Louis and old friend of Jack Dorsey.
In 2009, McKelvey lost a $2,000 sale on a glass faucet because he couldn't accept credit cards. The customer wanted to pay with Amex.
McKelvey couldn't process it. The sale fell through.
McKelvey called Dorsey, who was already CEO of Twitter, and they started brainstorming. The problem was obvious: millions of small businesses, street vendors, farmers market sellers, and independent contractors couldn't accept credit cards because merchant accounts required monthly fees, credit checks, and clunky hardware that cost hundreds of dollars.
Dorsey and McKelvey wanted to make it so anyone could accept a credit card using just their phone.
They built a tiny white card reader that plugged into a smartphone's headphone jack. The reader cost almost nothing to manufacture and Square gave it away for free.
The software was simple — swipe the card, enter the amount, the customer signs on the screen, done. Square charged a flat 2.75% per transaction with no monthly fees, no contracts, and no minimums.
The product launched in 2010 and spread through small businesses like wildfire.
Dapper Labs
Roham Gharegozlou was running a blockchain company called Axiom Zen when his team launched CryptoKitties in November 2017 — a game where users could buy, breed, and trade digital cats as NFTs on Ethereum. It went so viral that it congested the entire Ethereum network and accounted for 25% of all Ethereum traffic.
CryptoKitties proved that people would pay real money for unique digital assets, but it also proved that Ethereum couldn't handle consumer-scale applications. Gharegozlou spun out Dapper Labs in 2018 to solve both problems: build consumer NFT products AND build a blockchain (Flow) that could actually handle millions of users.
The NBA came calling in 2019, licensing their highlights for what became NBA Top Shot. When Top Shot launched in October 2020, a LeBron James dunk clip sold for $208,000.
By February 2021, Top Shot was processing $50 million in daily transactions. The NFT boom had arrived and Dapper Labs was at the center of it.
HOW THEY GREW
Block (Square)
Square grew by giving away the hardware. The card reader was free.
That eliminated the biggest barrier for small businesses. A food truck operator, a yoga instructor, a farmers market vendor — anyone could start accepting cards in five minutes without spending a dollar upfront.
Square made its money on the transaction fees that followed.
The simplicity was the pitch. Traditional merchant services involved contracts, monthly minimums, tiered pricing, and hidden fees that required a finance degree to understand.
Square charged one flat rate for everything. No surprises.
That transparency built enormous trust with small business owners who had been burned by traditional processors.
Cash App grew through peer-to-peer payments and a brilliant viral strategy. The app launched in 2013 as a simple way to send money to friends.
Rappers, influencers, and content creators started using their $cashtag for tips and payments. Cash App sponsored hip-hop events and partnered with musicians.
By 2024, Cash App had over 55 million monthly active users — more than most banks.
Dapper Labs
Licensing deals with major sports leagues gave Dapper Labs content that no competitor could replicate. NBA Top Shot specifically targeted sports fans, not crypto enthusiasts — a much larger addressable market.
The custodial wallet and credit card payments removed every crypto friction point, making it possible for someone with zero blockchain knowledge to buy an NFT in two minutes. Pack drops with limited supply created urgency and excitement similar to physical trading card releases.
Building the Flow blockchain gave Dapper Labs control over transaction costs and speed, avoiding Ethereum's congestion and gas fee problems. Celebrity involvement (Michael Jordan, Kevin Durant, Will Smith all invested) generated press coverage and credibility.
THE HARD PART
Block (Square)
The Afterpay acquisition for $29 billion in 2022 was controversial. Buy-now-pay-later was already facing regulatory scrutiny and growing delinquency rates.
Critics argued Dorsey overpaid at the peak of the market. Afterpay's revenue growth slowed significantly after the acquisition, and write-offs on bad consumer debt increased.
It remains the biggest bet Block has ever made.
The Bitcoin obsession worries investors. After renaming Square to Block in December 2021, Dorsey went all-in on Bitcoin — investing company cash in BTC, building Bitcoin mining hardware, and creating TBD (a Bitcoin-focused developer platform).
While Cash App's Bitcoin revenue is huge on paper ($10+ billion annually), the margins are tiny. Investors question whether the Bitcoin focus distracts from the core payments business.
Competition is intense on every front. Square competes with Stripe, Toast, and Clover for merchants.
Cash App competes with Venmo, Zelle, and Apple Pay for consumers. Afterpay competes with Klarna, Affirm, and bank-native BNPL products.
Block has to fight multiple wars simultaneously with finite resources.
Dapper Labs
The NFT market collapsed. NBA Top Shot's monthly sales fell from $224 million in February 2021 to under $5 million by late 2022.
The $7.6 billion valuation from 2021 looks nearly impossible to justify with current revenue. Massive layoffs — the company cut over 50% of staff in multiple rounds through 2022 and 2023.
The Flow blockchain never achieved the developer adoption needed to become a major ecosystem — most NFT activity stayed on Ethereum and later Solana. Licensing deals with sports leagues require minimum guarantees regardless of volume, creating fixed costs that hurt when revenue drops.
Regulatory risk — the SEC has investigated whether NBA Top Shot moments are unregistered securities. And the core question: are digital sports highlights a lasting collectible category or were they a pandemic-era novelty?
THE PRODUCTS
Block (Square)
Square is the merchant ecosystem — point-of-sale hardware, payment processing, invoicing, payroll, loans, and online stores for businesses of all sizes. Cash App is the consumer side — peer-to-peer payments, direct deposit, investing, Bitcoin buying, and the Cash App Card (a debit card).
Afterpay is the buy-now-pay-later product — split any purchase into four interest-free payments. Square Banking offers business checking accounts and loans.
Square Online lets merchants build e-commerce websites. TIDAL is the music streaming platform that pays artists higher royalties.
Dapper Labs
NBA Top Shot — officially licensed digital basketball highlights ("moments") sold as NFTs. Users buy packs, trade moments, and complete challenges.
NFL All Day — same concept applied to American football highlights. UFC Strike — officially licensed UFC fight moments as NFTs.
LaLiga Golazos — Spanish soccer league highlights as digital collectibles. Flow blockchain — Dapper Labs' own blockchain designed for consumer applications, used by NBA Top Shot and other products.
Dapper Wallet — custodial crypto wallet that works with credit cards, removing the complexity that makes normal crypto wallets unusable for regular people.
WHO BACKED THEM
Block (Square)
Khosla Ventures, Sequoia Capital, Kleiner Perkins, Visa, Goldman Sachs, GIC (Singapore)
Dapper Labs
Investors include Andreessen Horowitz, Coatue Management, GV (Google Ventures), Samsung, and celebrity investors including Michael Jordan, Kevin Durant, and Will Smith. The $7.6 billion valuation was reached in a 2021 funding round.