Fan Tokens vs Crypto Space
[TL; DR]
Sports teams and entertainment clubs create fan tokens to engage their supporters and raise additional funds.
Examples of popular fan tokens are Manchester City Fan Token (CITY), FC Barcelona (BRA), Paris Saint-Germain Fan Token (PSG) are
Holders of specific fan tokens have the privilege to purchase products and services from their teams on special terms such as discounts.
Socios is a well-known blockchain where sports teams and other organizations within the entertainment field can create their own tokens.
Introduction
The evolving gaming sector provides sports fans with a chance to interact with their teams in a more meaningful way than before, thanks to the introduction of fan tokens. Many popular teams around the world, especially in Europe, have their cryptocurrencies called fan tokens. Teams in various sporting fields, including soccer, rugby and netball, can develop their own tokens. This article discusses how fan tokens are changing the sporting and entertainment sector.
What are Fan Tokens?
Fan tokens are a type of cryptocurrency which give their holders the right to special treatment such as discounts on purchase of the organization’s assets. Basically, a cryptocurrency is a digital asset based on the blockchain which enables people to buy goods or sell them or carry out any other financial transactions.
The values of tokens depend on several factors such as their supply and popularity. Most notably, however, the values of cryptocurrencies depend on the supply and demand. That is the reason most tokens have limited supply. Speculation is one of the factors which increase their demand. In addition, the demand for fan tokens also depends on the number of fanatics or followers the team has.
Source: Chilizmedium
Since most fan tokens are utility by design, they maintain stable values which may increase constantly over time. A utility token is a cryptocurrency which acts as a medium of exchange on a certain blockchain. In this case, team fans use the fan tokens to buy various services and products the team offers such as non-fungible tokens and sports memorabilia. They also play a big role in the teams’ funding mechanisms.
How do Fan tokens Work
Chiliz is the major blockchain that enables sporting clubs and teams to create their own fan tokens on its platform, Socios. Sporting teams and related entertainment organizations can form alliances with Chiliz so they create their own tokens on the blockchain. Once a team makes an agreement with Socios, it can develop its own fan tokens on the platform. From there, it can issue this cryptocurrency using the Socios platform through its Fan Token Offering (FTO) feature.
A fan token offering works like an initial coin offering where the users purchase the cryptocurrency at a constant price. This is because at that time market forces do not determine the price of the token. Also, this increases the adoption of the token as many users buy it at a discounted price. After the FTO, the market forces of demand and supply influence its price.
Already, over 160 teams have forged partnerships with Socios. Most of them have already issued out their fan tokens. Apart from soccer teams, there are many clubs from other sporting disciplines like cricket, rugby, motorsports, netball, ice hockey, basketball and tennis that have joined Socios.
Types of Fan Tokens
Broadly speaking, there are two types of fan tokens. First, it is a utility token which people use to buy various products and services their teams sell. Second, fan tokens also exist in the form of non-fungible tokens (NFTs). Such NFTs can have logos of the respective teams or pictures of certain players. Apart from these two broad types there are other forms of Fan tokens, mainly tied to specific sporting disciplines such as gaming and movies.
Gaming: There are fan tokens for e-sport teams. These are the tokens which enable the teams to interact with their fans in several ways. For example, Socios has alliances with Team Alliance OG, Natus Vincere and Team Heretics.
Football: Also, there are fan tokens for various soccer teams. By standard, most of the existing tokens are for various soccer clubs such as Manchester City, Juventus, AC Millan, FC Barcelona and Young Boys.
Source: Marca
Fighting: There are tokens for Mixed Martial Arts disciplines. So far, several such organizations have affiliated to Socios and have already developed their tokens. For instance, Ultimate Fighting Championship has its own fan tokens.
Movies: Several companies in the filming and movie industry have also created their fan tokens. An example of such a company is Mogul whose mission is to develop and promote film arts products.
Examples of Fan Tokens
Now that we have explored several types of fan tokens, let’s focus on a few examples.
Manchester City Fan Token (CITY)
There is no doubt that Manchester City Soccer Team is one of the best in the English Premier League. Since it has a large fan base around the globe, it introduced its token to engage them.
FC Barcelona
FC Barcelona, a leading soccer team in Spain, has also introduced its fan token called BAR which enables its supporters to purchase its products and services.
Paris Saint-Germain Fan Token (PSG)
Again, another top soccer team, Paris Saint-Germain has a token called (PSG). Paris Saint-Germain has many supporters around the world and wishes to interact with them on a more meaningful level than before.
Uses of Fan Tokens
Fan tokens have many uses, the reason why different sport teams and entertainment organizations are using them. The team’s fans use the tokens to purchase its products and services including their merchandise and collectibles.
The tokens also entitle their supporters to exclusive events such as “meet and greets”. They also give token holders membership to their team communities. As such, they can participate in decision making through polls and surveys. For example, tokens holders can participate in making decisions on issues relating to their clubs. They can have inputs on the designs their clubs use on their merches and tour buses.
Future of Fan Tokens
Fan tokens promise to be the next big thing in the crypto space considering that many people support sporting and other entertainment clubs. Importantly, fan tokens bring supporters closer to their teams. One reason for this is that many sports fans live very far away from their teams and cannot attend their functions. Thus, the fans will buy the tokens as a means to connect with their clubs or teams.
To this effect, Dreyfus, the founder of Socios said: “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.”
Usually, die hard sports fanatics would like to give their teams financial support. Therefore, people can financially support their teams through buying and holding fan tokens. As many people purchase these cryptocurrencies, their values increase. It is important to note that with the use of the internet and satellites to watch international games, fans around the world can support teams of their choice.
Source: Francisesport
The blockchain has created new ways in which fans interact with their teams. In the past, team supporters would buy their club jerseys, balls and equipment. Now, the fans can keep memories of their teams’ best moments through acquiring their digital assets such as non-fungible tokens. Since such supporters use their team fan tokens their prices are likely to remain reasonably high.
Conclusion
Fan tokens are cryptocurrencies for sporting teams and organizations in the entertainment sector. Also, fan tokens can exist in the form of non-fungible tokens. Holders of fan tokens get preferential treatments such as discounts when purchasing their teams’ products and services. More significantly, the tokens enable the fans to contribute to the team’s decision making process.
Author: Mashell C., Gate.io Researcher
This article represents only the views of the researcher and does not constitute any investment suggestions.
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