This is the second installment of Modern Token’s revision of crypto in the sports industry. Read the first part here. This post discusses how sports clubs and leagues can leverage the blockchain as a unified payment system for fan-oriented services.
One of the use-cases in the overlap between crypto and sports is the use of cryptocurrencies as a unified mean of payments for sports-related services. Crypto and blockchain projects like Fan360, Blocside (Blocside Sports Ltd.), Infinivi, and FanChain build an ecosystem around the existing fans’ networks and aggregate all fans’ activities by partnering with the providers of adjacent services: betting platforms, merchandise distributors, streaming platforms, etc. The resulting tokenized platforms provide fans with the sports-related services necessary to:
An interesting case is that of sports fan club network FanWide, which uses their FanChain token as user rewards. Recently, FanChain has also signed agreements with the NFL Players Association, WNBA Players Association, and Friday Night Fights. The platform enjoys the support of multiple representatives from the US professional sports industry, receiving endorsements and backing from retired NBA commissioner David Stern, NFL tight end Vernon Davis, Syracuse Men’s Basketball coach Jim Boeheim, and NBA All-Star Steve Smith.
Some platform tokens can even enable the holder to participate in the life of a club by taking part in polls or contributing to some of the club’s decisions; this is where a cryptocurrency token becomes a fan token.
The fan bases of some clubs are bigger and more solid than the population of small countries, with global communities straddling all international boundaries. Fan token offerings (FTO) are an innovative way for clubs, large or small, to create and sustain engagement with fans. FTOs provide a way for these masses to vote on certain club issues such as man of the match awards or jersey design. Therefore, although the trading value of a fan token will naturally depend largely on how the team fares on a competitive level, FTOs may be the future of fan engagement.
Market Research Agency Nielsen notes the trend for increased fan’s inclusion into the life of a sports club or celebrity as well as strengthened connection between the athletes and their supporters. And fan tokens follow exactly this vector of user engagement trends.
Indeed, fan tokens are drawing interest from some of the biggest sports clubs. Paris Saint-Germain and Juventus have both announced partnership deals this season with the blockchain platform Socios.com to launch FTOs. Socios.com, a Maltese company owned by ChiliZ, claims to have raised $66M from financiers, including Binance. The platform issues club-branded tokens, which come with various minor voting rights and privileges attached for the fans, and are also tradeable on the Socios marketplace against the ChiliZ native token. The tokens can also be representative of VIP status for their holders.
Meanwhile, Brazilian Série B soccer side Avaí recently became the first club to globally launch their own fan cryptocurrency with its official partners SportyCo and Blackbridge Sports. 22 million Avaí FC tokens were made available, each priced at $1, to help raise funds which the club say are vital to fight for a place in the top division.
After all, what if fans were entitled to vote with their own dime to determine the fate of the club: who should be the coach, where to recruit the players and mascot, and what should be a playing strategy? Wouldn’t it change the results of World Cups and sports landscape globally?
If combined with extended voting rights, solid legal framework and increased member’s control over the whole course of club development, FTOs can become DAOs in application to sports—or “DAFO”, a model of sports management through a consensus of fan-token holders.
Fan-Controlled Football League is one of the projects propagating this concept. The platform is aimed to be fully managed by participants—from voting on which coach to hire to real-time play calling during the games. The control that a fan will have over their team depends only on the amount of crypto tokens he owns, earned for the activity on the platform. The platform is a future yet to come, though the league made some steps forward: in 2017 the league launched a professional American football team ‘Screaming Eagles’ with the games live-streamed via Twitch and has recently signed NFL stars Marshawn Lynch and Richard Sherman as team owners.
The purpose of this two-part article was to study the landscape of crypto entering sports through some specific cases. How many of these projects will deliver on their strategy at least partially is yet to be determined. Another more pressing question is one of social maturity—are our сontemporaries from different parts of the globe ready to take on more responsibility and make their voice matter? As crypto market analysts, we are curious to observe whether the concepts of self-governance, decentralization and crypto economy will stand a reality-check by one of the largest and tightest social groups in the world — sport enthusiasts and fans.
Written by Aleksandra @Coreference, a crypto market researcher at Modern Token.