Surely you have heard about the curious news in which it is stipulated that Messi will collect part of his salary at PSG in “Fan Tokens”:
These Fan Tokens are nothing more and nothing less than a recent booming trend, in which different sports teams, from soccer, to basketball, wrestling and cricket, are associated with large blockchain projects to "tokenize" the commitment of their fans. . Through the issuance of these “utility tokens”, teams, clubs and leagues are able to create a more direct approach than ever to their followers in terms of decision-making, promotions and exclusive experiences, at the same time that they obtain great benefits for it.
With Fan Tokens everyone wins: both the teams and their biggest fans. Discover in this article what are the keys you should know to stay up to date with this hot trend. Read more: bloomberg
The need for Fan Tokens
The fan club culture is rapidly being modernized. Today, all sports must be highly marketed to achieve the success necessary to be relevant. In ambitious sports, such as soccer, companies make and spend huge amounts of money on maintaining their players, stadiums, and advertising. In order to achieve all of these goals, these sports cannot exist without a huge and consistent fan base willing to fund them.
Recently, due to the COVID crisis, this need has been greatly enhanced. Stadiums are emptier than ever and fans are increasingly enjoying the sport through social media and streaming, from the comfort of their homes. Therefore, sports companies must seek new financing and advertising strategies, through which to maintain and increase the interest and monetary contributions of their fans.
And what better strategy than to take advantage of the crypto explosion for this. As has been demonstrated with the large NFTs and fantasy sports platforms, such as Sorare and NBA Top Shots, leaders in the Non-Fungible Tokens market, fans are very willing to approach the crypto-asset market to feel more involved in them. sports they love.
According to a study courtesy of Morning Consult of sports fans are familiar with the crypto world, and among those who gamble, they are 72%.
It seems that the alliance between the world of sports and that of crypto assets is here to stay.
What are Fan Tokens?
It can be said that a Fan Token is a utility token, that is, an ERC-20 crypto asset that, apart from being a unit of value in a blockchain, and all the properties that this entails, can also be exchanged for different products or services .
In this case, those products and services are related to what a sports club wants to offer its fans, which makes the value of a Fan Token highly dependent on the variety of utilities it may have. The more options involved in owning a Fan Token and the incentive to use it, the more appealing it will be.
But… What are these applications today?
The fans take the floor
Currently, Fan Tokens are focused on giving fans an opportunity to contribute their opinion and interact with their favorite team. This is achieved through the introduction of a polling and voting system, in which the simple fact of owning Fan Tokens gives you voting power. The more you have, the more your decision will influence the polls!
As an example, some surveys carried out so far are:
Music playlist before a game and during breaks.
Inscription on the arm band of the team captain.
Mural in the team dressing room.
Inspirational message from before a game.
Song celebrating a goal.
Equipment bus design.
Team logo design.
Goal, player and play of the year, published on social networks.
Even Apollon FC, through the Socios app, which will be discussed later, managed to take the commitment to another level, allowing its fans to vote for the line-up of their players in a friendly match against Aris Limassol.
The results were surprising: a resounding 6: 0!
Access to tasty rewards
The value of the Fan Tokens does not remain solely in the voting power they grant. They also give Fans access to exciting promotions and exclusive opportunities:
Discounts on team merchandising.
Purchase of exclusive and thematic NFTs.
Access to raffles to get great experiences: meetings with players, VIP tickets, special courses, signed shirts ...
Imagination and what a club or team is willing to give away with Fan Tokens is the limit to how exciting these rewards can be!
Tokenomics
Apart from all these interesting options, we must not forget that Fan Tokens are critical, and, therefore, a large part of their value and success will be determined by how they are distributed based on their supply and demand, and the liquidity they possess. in the market, that is, for its tokenomics.
For now, the most popular Fan Tokens follow the following trend:
They have a limited total supply.
They are initially distributed through an FTO, that is, Fan Token Offering. These events work in a similar way to an ICO: a period of time is established in which a limited number of Fan Tokens are sold at a fixed price, before being subjected to the fluctuations of the crypto market. This tends to give new Fan Tokens a big boost, and generates big funds for the companies that launch them.
Once the initial supply has been distributed and introduced in the crypto market, a percentage of the total supply is added to circulation annually, until the maximum is reached.
As an example, consider LAZIO tokenomics, SS Fan Token. Lazio, courtesy of Binance Fan Token:
As can be seen in the graph, the distribution of tokens between different sectors is also important: as a reward for developers, for the team, and for other types of promotions and utilities.
In this last section, Staking stands out, also known, in this case, as loyalty subscriptions on the different platforms. This is one of the most effective ways to remove large amounts of Fan Tokens from circulation during certain periods of time, increasing their scarcity, and therefore their value. On Fan Token platforms, staking is usually approximated as follows:
Users can lock their tokens for a specified period of time (more rewards) or for as long as they want using Flexible Staking (less rewards, but more flexible).
Depending on the time that users have their tokens in staking, at the end they are granted a reward proportional to the tokens they have had blocked, in the form of more tokens.
As for other possible advantages of having the tokens in staking, it can be given, for example, access to various promotions and exclusive NFTs gifts.
It is also quite common to carry out token burning campaigns, that is, to remove tokens from the supply in circulation on a scheduled basis, with an effect similar to staking.
Having said that…
What are the main Fan Tokens companies?
Currently, the cake is taken by 3 large companies: Socios, Bitci Technology and Binance. All three consist of ecosystems of Fan Tokens built on different blockchains, and these share the characteristics explained above. However, it is worth delving a little into what each of these three projects contributes.
Partners, the ecosystem leader
Among the Socios ecosystem are most of the world-renowned teams, such as PSG, Football Club Barcelona and Juventus. Beyond soccer, it also has partnerships with basketball, wrestling, tennis, cricket teams, etc ... which makes it the largest and most developed Fan Tokens platform on the market.
Socios Fan Tokens live on a PoA (Proof of Authority) blockchain called Chiliz Network, and can only be purchased if you own Chiliz's native cryptocurrency, CHZ. This, added to the fact that the transaction fees of the Fan Tokens are paid with CHZ, makes this crypto asset essential when interacting with the Fan Tokens of the platform.
To obtain Partner Fan Tokens, the cheapest way is through the Exchange integrated in Chiliz, in which the pairs are all CHZ / Fan Token type, and you benefit from very cheap transaction fees. However, due to a recent alliance between Partners and Binance, their Fan Tokens are also available on the Exchanges of this other platform. This also means staking to earn Socios Fan Tokens on the Binance Launchpool.
Among the innovations offered by Socios, is its interesting system for burning Fan Tokens based on the results of a match (it celebrates goals and victories by increasing the value of the Fan Token).
Another of its innovations is the Locker Room, an optional system to the FTO, in which it seeks to attract Socios to potential partner teams, showing them the existing interest in them through their fans. It consists of creating campaigns for possible future partners. In them, fans can put CHZ into staking until the end of the campaign, obtaining in exchange Locker Tokens, which, if the campaign is successful, become Fan Tokens of the new team. If, on the other hand, the team does not end up associating, the user simply recovers in CHZ that he put in staking.
An augmented reality game has recently come out, in which, similar to Pokemon Go, users can chase (and get) CHZ and Fan Tokens by walking down the street all over the world, called Token Hunt. It is presented as an excellent way to get airdrops and introduce new users to the Socios platform.
Bitci Technology
The other blockchain company that is gaining more relevance in terms of creating a Fan Tokens ecosystem is Bitci Technology. It presents itself as a Turkish company focused on offering blockchain solutions to different businesses, among which are sports teams, civil organizations and different institutions.
Currently, it has a considerable amount of partnerships with relevant basketball and soccer teams, among which are the Spanish and Brazilian Soccer Federations, MotoGP. McLaren Racing in F1 and the recent addition of FIFA.
Its Fan Tokens economy is very similar to that of Partners, as they are mounted on a PoA blockchain called Bitcichain, and the value of their Fan Tokens is directly related to that of their native token, Bitcicoin.
The current Bitci Fan Tokens have not had, until now, such an active development as those of Partners, being, for the moment, only one more asset with which you can trade on bitci.com, and with which you can pay for some services and merchandising of the teams associated with them.
However, Bitci Technology is developing a mobile application for Fan Tokens through which its functionality can be increased in a similar way as is done in Partners, based on the participation of fans in voting, in special promotions and raffles, and in the purchase of exclusive NFTs. It is a matter of time to see the potential and interest that these Fan Tokens will generate, in opposition to their more developed competitor.
Another added value is the relationship that Bitci Fan Tokens may have with other projects that are successful in Bitcichain beyond sports. The more value the Bitcicoin has, the more value your Fan Tokens will have.
Binance Fan Token
Binance, the great blockchain Exchange, has also joined the Fan Token business, offering its teams the possibility of taking off through the Binance Launchpad, adding the tokens to its Exchange to ensure liquidity, and promising numerous functions for these utility tokens. Currently the only two teams in the Binance Fan Token project are the S.S. Lazio and FC Porto.
The biggest advantage and difference that Binance offers so far compared to Partners is the launch of its Fan Tokens through the Binance Launchpad, which offers a great initial guaranteed impact. More info here.
Conclusion
It is inevitable, looking at the success of these three companies and the teams associated with them, together with the enormous interest that sports fans show in supporting them, that the tokenization of sports fan clubs will be a standard feature of every team minimally. influential in the future.
In fact, it is interesting to consider that this trend is nothing more and nothing less than its beginning: the different possibilities that Fan Tokens can offer are still being explored, and surely many more platforms will appear willing to contribute something new and innovative to the ecosystem . It will be necessary to create Fan Tokens of all types of teams and clubs in the near future, and for this it is a necessity that there are platforms adapted to all types of demands, needs and budgets. Or, who knows, maybe one will emerge capable of housing the entire ecosystem ...
Even beyond sport, it can be seen that Fan Tokens can be adapted to any group of Fans. See, for example, the future launch of KPOP Digital, a platform where KPOP groups like Black Pink and BTS will have their own Fan Tokens, with a similar operation to those described in this report, only adapted to the fandom of these popular groups. of Korean pop.
Regarding the possibilities of fan involvement: at least I imagine a future where a team fully commanded by them appears: they choose their formation, the crucial decisions in the matches, who to sign, who to kick from the team ... Seeing incredible results like those of the Apollo FC game, such a team could be destined for the greatest of success ... Do you remember the typical friend, relative, or acquaintance who spent the afternoons screaming with emotion and contained rage at the television when his favorite soccer team took a bad decision or did he make a bad move? This would be his chance to influence the success of his favorite team just as he wished. It would be the first sports team commanded by a DAO… And it could be just the beginning!
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