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With major sporting events being postponed or taking place without a public audience, the pandemic has pushed the sports industry to find new ways to make money and connect with fans. Plus, while cheering on your favourite team live in the stadium will probably never be replaceable, blockchain-based tokens have allowed a new wave of fan support. What if you could get exclusive offers or have a vote in team decisions? These are just two examples of what so-called “fan tokens” can do.
What are fan tokens good for?
Fan token offerings have been around for a while, but the trend really took off last year when major football team FC Barcelona launched their token in June 2020. They were sold out within two hours, generating revenue of €1.2 million. The idea behind it is simple: Fan token owners can participate in team polls, get early access to ticket sales and feel more connected to their favourite players through an app.
FC Barcelona might be the biggest fan token offering so far, but it’s not the only one by any means. As of now, 18 football teams offer fan tokens, soon to be joined by Manchester City’s token.
How are fan tokens and the cryptocurrency Chiliz connected?
The latest teams joining the sports token world have created a buzz around Socios.com, the platform most of these tokens are running on. The Maltese startup created the cryptocurrency Chiliz to buy and sell their fan tokens. Shortly after AC Milan’s fan token offering, Chiliz reached a market cap of more than €1 billion in March. At the time of writing, Chiliz’ market cap has reached over €2 billion.
Whether it’s deciding on locker room artwork or getting exclusive rewards, the tokenisation of sports teams has allowed fans to feel closer to their teams than ever before – even with major parts of the world locked down. Alexandre Dreyfus, CEO of Socios.com, stresses how fan tokens can monetise previously underserved markets: “For the biggest clubs in the world, 99.9% of sports fans are not actually in the stadiums, or even in the same city or country of the club that they are supporting,” Dreyfus told AP.
Tokens have also gained traction in the esports world, but vanishing ticket sales have forced the global sports industry to find new revenue streams. According to Socios.com, fan tokens have generated $30 million in 2020 for its clubs and partners on the platform. Football teams are still the main driving force in fan token offerings, but other sports such as racing are catching up. Socios.com recently announced its US expansion plans, hoping to get teams of the NBA, NHL and MLB on board.
Another way of blockchain technology enabling fan engagement and generating more revenue are digital collectables. As we mentioned before in our article “Why everyone is talking about NFTs”, non-fungible-tokens have created a hype around digital arts and memorabilia in the sports world. The NBA Top Shots marketplace has reached over $300 million in sales since its launch in October 2020. In the football world, Sorare is the biggest trading platform for NFTs. The platform started out in fantasy football but has since brought in big European football teams. Sorare now generates $6.5 million per month through selling collectables. In that sense, fan tokens are similar to NFTs as both are revolutionising whole industries right now.
These recent developments indicate that the tokenisation of the sports industry will only grow bigger in the future, allowing fans and teams to engage with each other in new ways.
If you want to join the fan token world, you can learn more about Chiliz on Bitpanda.