Sports is an industry badly hit by the COVID-19 pandemic. A football match in Italy even became ground zero of spreading the virus, resulting in the cancellation of matches across the continent.
Though now football seasons are resuming with closed-door matches, it’s not the same without the fans. After all, sports are a mix of both players and cheering fans.
To fill this void between the fans and their supported clubs, blockchain is coming to the rescue – particularly with a concept called fan token.
These tokens are exclusive to clubs or leagues, meaning everyone will have their own token.
Though many including individual sports stars have launched their fan tokens, when it comes to European football, one company is dominating – Chiliz.
What are fan tokens?
As mentioned earlier, fan tokens are blockchain-based tokens for the fans of a particular football club or sportsperson.
These tokens give the fans more engagement opportunities with their favorite clubs or even leagues.
The most interesting one is the voting rights of the fan token holders in making various decisions in the clubs. Yes, fans can choose many small yet engaging things when it comes to their favorite team.
For instance, Barça Fan Tokens ($BAR) fan token holders recently voted to choose a piece of fan-designed artwork to go inside the legendary home dressing room at the Camp Nou.
Juventus fan token holders are also choosing their new goal celebrations song at the Allianz Stadium, while Paris Saint-Germain supporters are placing a direct message on the captain’s armband.
The Atlético de Madrid fans are now voting for a player to overtake the club’s Instagram account.
Not only that, but the fan token holders also will also receive rewards based on their interaction with the club – how many times they vote, how many fan tokens they hold, and a few more parameters.
In the COVID-19 football matches where fans are not allowed to visit the stadiums, 35 $JUV Fan Token holders were brought to the stadium on June 13 during the live match via video link.
Chiliz, along with the clubs, is now planning to give the fans such a virtual experience for every match.
So, all in all, these tokens are enhancing the fan experience to engagements.
Explaining the market of these fan tokens, Chiliz founder and CEO Alexandre Dreyfus 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. There is a lack of engagement and monetization towards this global fan base.”
“All these fans have no significant way to have a voice and have an influence. By owning one of these fan tokens, suddenly you are being recognized, and more importantly, you have a voice and a right to vote on a decision that the club is asking you.”
Dreyfus previously operated a gambling platform.
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Chiliz is also operating a mobile-based platform called Socios.com, obviously a namesake of FC Barcelona’s socios program, where fans can trade the fan tokens and vote for their team.
Huge demand for fan tokens
Fan tokens are in huge demand right now, and this was clearly visible in the recent $BAR fan token flash sale.
Priced at €2 apiece, 600,000 $BAR fan tokens were all sold out in merely 2 hours, earlier this week, thus raising the club around $1.3 million.
Similar to any other blockchain tokens, these Ethreum-based fan tokens can be easily traded on against other cryptocurrencies.
In recent months, Chiliz has launched seven fan tokens, all of which are currently trading significantly above their issue price. $BAR, the most recent one, is trading at nearly $6 apiece, as of press time.
The active trading of the tokens will also ensure the fans to offload their holdings if they don’t agree with the club decision or stake up more if they are really bullish, like the chances of winning a league.
Currently, all these tokens are listed on Socios.com and the Chiliz Exchange against Chiliz’s native tokens, but the company has plans to list them on major crypto exchanges as well.
“Socios.com has been live for just over 6 months, but now fans are grasping the benefits of owning Fan Tokens and how we are able to deliver unprecedented opportunities for engagement with their clubs and unforgettable experiences,” Dreyfus said.
Apart from European football, the Malta-based company has also launched fan token for esports team OG, where the fans are niche, yet very engaging.
It also has plans to bring such tokens for the Ultimate Fighting Championship (UFC), but no timeline for that has been made public yet.
Some competition on the road
Chiliz is not the only blockchain company bringing sports fans closer to the favorite team, using blockchain.
Singapore-based company Global Crypto Offering Exchange (GCOX) is working in the same arena. Though previously, the platform was focused on bringing individual celebrity fan tokens, it recently partnered with LaLiga, the major Spanish football league.
The LaLiga Token holders will receive VIP hospitality tickets, private stadium tours, and regular LaLiga Santander match tickets, along with access to some exclusive merchandise.
Boxing superstar Manny Pacio, who also back GCOX, also launched his fan token on the exchange offering exclusive merchandise to his token holder fans and also intersecting with them on social media.
American singer and songwriter Jason Derulo and Tennis star Caroline Wozniacki also signed contracts with the exchange, but their fan-specific tokens are yet to hit the market.
Tapping a billion-dollar market?
Though fan tokens are limited to voting and experiences, for now, they have penetrated into a massive market. If implemented correctly, they can even tap the massive fantasy sports market.
To give you an idea, a market research firm recently estimated that the fantasy sports market is expected to grow by $9.34 billion between 2020-2024.
Sports fans playing fantasy leagues are also very engaging, and if done right, these fans tokens can totally change these experiences.
“Factors such as the high internet penetration, increasing popularity of e-sports, and the increasing number of sports leagues will have a positive impact on the growth of the fantasy sports market value during the forecast period,” a senior analyst at Technavio said.