This constantly changing and developing era of modernization and technology is bringing new and exciting platforms for users to participate in and engage with. Cryptocurrency, the technology featuring a new form of money exchange, is now reaching new heights. Multiple new concepts that were unthinkable a few years back are now ruling the market. One such concept is that of fan tokens, and it has been a major attraction, especially among sports fans.
A glimpse at 2020 shows that every business and industry suffered huge setbacks, yet cryptocurrency and related services performed remarkably well. Many institutions, especially sports clubs, have adopted new ways to make money and raise funding for their programs. Sports clubs launched fan tokens that brought in a new form of fan participation through cryptocurrency.
What are fan tokens?
Fan tokens are a special kind of cryptocurrency that gives holders access to various fan-related activities. These fan-related activities include voting in some of the club decisions, special match ticket discounts, teams’ bus designs, etc. These are just a few examples of what could be the possible activities that are offered by fan tokens.
NFTs vs Fan Tokens
Fan tokens give fans memberships and allow them to gain exclusive offers and have a voice in the team's decisions like never before. Fan tokens are replaceable with other such tokens, making them ‘fungible’ as opposed to Non Fungible Tokens (NFTs).
Rise of Fan Tokens
Prominent sports clubs like AC Milan, Inter Milan, Santos FC, and FC Porto, etc., are the initiators of fan tokens. Initially, fan tokens sparked during the COVID-19 lockdown. Sports organizations needed an alternative to generate revenue that was impossible due to Covid restrictions.
Many organizations plan to launch their digital assets after seeing the waves they have created for other clubs. Some major sports clubs which sell fan tokens are FC Barcelona, Manchester City, etc. Of late, many US sports teams are expected to join in on the hype, while some associations like NFL, NBA, and NHL have reached agreements with Socios.
How Do Fan Tokens Work?
Fan tokens operate on a no-fixed-value principle, meaning their weightage comes from the value of fan participation and involvement. Fan tokens have a fluctuating value. Initially, a fan token is offered at a fixed starting price. Then, it either gains or loses value over time. Fan tokens determine the shape of fan activities, participation, and revenue streams for sports teams offering those tokens.
Using a fan token
Socios.com is one of the leading platforms for buying fan tokens through the currency ‘Chiliz ($CHZ)’. People who buy a fan token can then earn rewards, win prizes, and get involved in several activities, like deciding the team's motto. Other perks associated with these crypto assets are meets-and-greets and easy access to signed objects distributed by stars of the fans’ favorite teams and clubs. Sometimes, teams offer exclusive promotions to fans with the number of owned fan tokens equal to or more than a specified threshold.
More the Merrier
More tokens mean more privilege and access to the activities. Fans have more say in the decisions of the fans’ respected teams or even individual stars that you bought the fan tokens for!
Fan token vs DAO token
Fan tokens are analogous to DAO governance tokens. A governance token allows token holders to decide and have a say in tech issues. Fan tokens can be considered a way of expressing ‘team patriotism’ by fans.
Types of fan tokens
Different sectors have introduced multiple kinds of fan tokens. Sports tokens and music tokens are the most famous types of tokens. These serve a common purpose: increasing fan involvement and generating revenue.
Gaming
Gaming applications and e-sport teams use fan tokens to enhance community engagement. For example, some of the big names Socios has partnered with are Team Alliance and Team Heretics, among many others.
Football
More than 19 Football clubs have already made their respective fan tokens. Examples include PSG, AC Millan, Manchester City, and FC Barcelona. Football has the most fan tokens associated with it compared to all other sectors involved with such digital assets.
Fighting
Fan tokens increase fan participation in chats and polls in professional MMA organizations. For example, UFC and PFL have released their own fan tokens.
Movies
The entertainment sector has stepped into the world of digital assets recently. One of the major movie companies ‘Mogul,’ has introduced NFTs and a DeFi platform for the showbiz industry. Additionally, they have announced a plan to introduce fan tokens for this sector as well.
How to identify a fan token?
As a part of a fan club or sports club, people are familiar with the logos and slogans of the clubs. Hence they can easily identify a fan token when they see it. Before buying a fan token, you can check its worth by knowing its market capitalization. The seller of the fan token sells a particular one that the fans identify and buy. These fan tokens serve a different purpose than other cryptos( like Ethereum); they solve financial or tech problems in a more fan-based reward system.
Benefit to clubs
A fan token serves to be a helpful tool for clubs and teams as it helps them generate revenue on a much bigger scale. Now that the effects of Covid have been minimised, the focus of fan tokens has changed. It is directed more towards an enticing and reward-based fan experience rather than revenue generation. Some good examples are fan tokens in both the sports and music industries. One of the most in-demand fan tokens nowadays is the ‘KPOP fan token’ It is a fan token for famous Korean popular music.
Crypto vs Fan Token
Like cryptocurrencies, fan tokens can be sold, bought, and traded. The difference between the two is their value; for example, Ethereum tokens being stablecoins, have a fixed value. Whereas fan tokens have a set selling price at the start, which changes over time. It changes per market movement and how much participation it gets from the token holder.
How to buy fan tokens
Where to Buy
There are some platforms from where one can buy fan tokens, for example, Socios.com, Phemex, etc. Initially, a seller sells a fan token for a fixed price at that time, known as ‘FTO’ (fan token offering). After which, the prices rise following the gain in popularity of the token. You can use cryptocurrencies like Chiliz ($CHZ), Tether (USDT) etc, to buy fan tokens. Fans first have to purchase CHZ through a crypto exchange if they wish to purchase a fan token.
How to Buy
These simple steps summarize the process:
- Buy Chiliz or other acceptable cryptocurrencies from Socios.com or any other crypto exchange.
- Select the desired token and specify the number of fan tokens you want to purchase.
- Receive your tokens after the system verifies your payment.
The price change of the tokens varies with popularity, wins, and losses. Tokens may rise in value if the team is considered a champion, while if the team does not perform well, its token value may fall.
The more fan tokens one has, the greater will be the access and right to vote on a variety of matters surrounding their favorite team.
Five Fan Token Projects You Should Know
1. Santos FC Fan Token SANTOS
Binance launched this fan token for the famous Brazilian football club. Benefits associated with this token include the opportunity to engage and the right to vote on various team matters. The buyers of this token are granted privileges like limited NFTs, rewards, and GameFi access. It is traded at US$ 12.59 and the associated market capitalization is US$ 57 million as of 25 October 2022.
2. Lazio Fan Token LAZIO
The credit for this token’s launch also goes to Binance. FC Lazio has many awards attached to its name, including winning 2 Italian Championships, 1 UEFA Supercup, 7 Italian Cups, 5 Italian Super Cups, and 1 Italian Serie B championship. The price of this token is around US$ 4.41, whereas the market capitalization is US$ 37.97 million as of 25 October 2022.
Alpine F1 Team Fan Token ALPINE
The Alpine F1 Team Fan Token was launched on the Binance platform. A fan who is an ALPINE holder can experience exclusive fan-related activities and directly participate in merchandise signing and meet-ups. This token has a limited collection of NFTs that hold rewards. Unique offers include a private fan meeting with the F1 team, officially signed objects by the F1 Team, and more. Its price is US$ 2.99, with a market cap of US$ 34.02 million as of 25 October 2022.
FC Porto Fan Token PORTO
This Portugal-based token is among the newest tokens to be launched, but it has one of the most active fan bases. FC Porto was founded in 1893, making it the oldest football club in the country. FC Porto (PORTO) fan token has a price of US$ 4.2 and a market capitalization of US$ 32 million as of 25 October 2022.
Paris Saint-Germain Fan Token PSG
Socios.com launched the Paris Saint-Germain Fan Token (PSG). This token allows fans to have a say in the seasonal goals of the team. Moreover, VIP access and official merchandise are also included. PSG token holders had the opportunity of voting for the cover design of the limited edition FIFA-22 PSG. Some holders of this token even got a video call from first-team players through this platform. According to the club, their token’s trading volume had increased by more than 130% in just five days after the rumors spread of football player Lionel Messi joining the team. The token is worth US$ 6.72, with a market cap of US$ 25.83 million as of 2 June 2022.
Closing Thoughts
Many platforms provide the opportunity to buy and sell fan tokens, including Zipmex, Phemex, Cryptocap, etc. It is a new innovative, rewarding system that generates revenue for the organizations and increases fan engagement with their beloved franchises. The worth of a fan token increases as the owner uses it to participate in related events. Additionally, they allow the fans to be more involved with their favorite teams and stars.
