Fan tokens or sports cryptocurrencies are digital assets that enable sports teams, leagues, clubs, associations and players to strengthen fan engagement.
Founder & CEO, SportZchain
Siddharth is a serial entrepreneur with a passion for sports and blockchain technology, including cryptocurrency. He commenced his entrepreneurial journey by founding startups like ADSONCAB.COM and The Sepoi. Over 14 years of extensive experience and in-depth knowledge in corporate strategy, private equity, entrepreneurial ecosystem, Blockchain and passion for sports helped him lay the foundation for SportZchain.
As a diehard sports fan or enthusiast, you might find yourself trying out new ways to get a more direct and first-hand experience with your favorite sports teams or clubs. Maybe this is the reason many fans participate in fantasy sports, or watch games in a bar, club or restaurant so that they can cheer their favorite teams together. The latest upgrade on this front has been fan tokens (FTs), which allow its holders to embrace sports in an exceptional way.
These tokens provide fans with exclusive access to sports content, a closer association with the team or club concerned and also monetary rewards. These tokens are a form of cryptocurrency. But as opposed to virtual currencies, fan tokens require making use of blockchain technology from a third party.
What is sports currency?
Did you Know?
Sotheby’s has sold $65 million of NFTs in 2021, while arch-rival Christie’s has sold more than $100 million of the new type of crypto asset
View Details »Fan tokens or sports cryptocurrencies are digital assets that enable sports teams, leagues, clubs, associations and players to strengthen fan engagement. It is especially helpful for teams to remain connected with fans who live in a different geography and so may not have the opportunities or freedom to connect directly.
The thing is, when we tokenise a particular part of an industry, we enable the consumers or fans to participate and interact with the workings of that industry. As fans of various sports and teams, we love nothing more than being able to participate in the functioning of our favorite teams — from choosing the colour of their jerseys to making player transfers. Holders of FTs can participate in such decision-making processes. Having such a right to vote increases the value a fan gives to the sports ecosystem. It also makes every step taken by the team concerned more intimate for the holder of a FT.
The value of sport currencies
These tokens make fans more than just spectators. Through a fan token or sports token, a passive fan is converted into an invested fan. He or she can also gain from the financial upside of the team concerned. These assets aren’t necessarily backed by the underlying value principles of Bitcoin or Ethereum. FTs get their worth from how much fans value participating in the club/team and earning unique benefits.
Holders of FTs can get the rights to influence binding and non-binding decisions on their clubs or teams. This includes club merchandise discounts, voting rights on club polls and even picking charity initiatives. No amount of money can buy certain intrapersonal experiences such as going on a team lunch with your favorite sports personalities. FTs can give that to a holder of the token.
Having sports tokens is almost like having a platinum membership card that comes with exclusive rewards and VIP access. Fans have access that doesn’t expire and isn’t limited to a particular season. These perks could add an extra layer of pride and prestige to the tokens.
What’s more, these sports tokens are completely fungible (unlike NFTs) and can be exchanged in any transaction for products in the future. If the team creates more utility for these sports tokens or wins a league, it will directly impact the demand for these tokens. A classic example of this is Paris Saint-Germain FC (PSG). When five-time Golden Boot winner Lionel Messi joined PSG, the fan tokens of the team rose exponentially, benefitting token holders across the world.
Global sports teams participating in fan tokens
A wave of sports tokens and enhanced fan engagement has taken the sports industry by storm. Certain teams have taken the lead. For instance, in January 2020, Atlético de Madrid became one of the first football teams to issue FTs. They were followed by many other teams, including FC Barcelona, Valencia CF, AC Milan, Juventus, Manchester City and AS Roma. In basketball, Cleveland Cavaliers has joined a fan token platform. Unsurprisingly, Indian Premier League franchises Punjab Kings, Royal Challengers Bangalore and Kolkata Knight Riders have also jumped on the bandwagon by joining a blockchain-powered sports engagement platform. Similarly, gaming, motorsports and even MMA (mixed martial arts) have started shipping their individual blockchain-based tokens to fans across the world.
In a nutshell
The crypto market is extremely volatile and purchasing such assets will always be deemed a high-risk investment strategy. However, these assets are slowly becoming a part of modern-day culture and regulators are also giving them a closer look now.
Having said that, sports fans should realise that FTs give them a chance to interact more with their favorite teams and be a part of an exclusive community. The more fan/sports tokens you own, the more influence you have over your favorite team. And higher the chance you have of earning monetary rewards. All this while continuing to get entertained by watching and cheering your favorite game or sportsperson. It could make you a real game changer.
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Bought on₹Current Value₹ Buy (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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