During the last installments of the cryptocurrency training series, we have been covering general topics about the crypto asset ecosystem. Either from onchain metrics, from terms that have become popular to investment strategies. As you may have seen recently, the Qatar 2022 World Cup opened this past Sunday, November 20. With the arrival of this massive event, I think it fits us perfectly to address the following topic. Yes, in today's cryptocurrency training we are going to talk about what Fan Tokens are and what characteristics they have.
What are Fan Tokens?
Fan tokens are the asset class we will cover in this cryptocurrency training. These tokens are cryptocurrencies that allow their holders to access a series of benefits granted to the fans of each team. The fan token ecosystem can range from sports clubs from different sectors, Formula 1 teams to eSports teams. Let's not confuse them with NFTs, since fan tokens can be traded and are considered fungible. Such tokens are not necessarily backed by other crypto assets such as Bitcoin or Ether; The value of these tokens is defined based on the value that fans give when participating in the ecosystem to win unique prizes. One of the pioneer platforms in the sector was Socios.com, creator of Chilliz (CHZ).
What benefits do they provide?
Fan tokens are purely like other cryptocurrencies, that is, we can trade them as we do with Bitcoin or other tokens. It is true that they are more sensitive to the news given that their movements are based a lot on the trust placed by the fans. These tokens are considered “governance tokens” but with certain limitations. When a fan holds a certain amount of fan tokens, they are granted access to different exclusive benefits, such as:
Club merchandising design.
Among the votes in which you can participate, it includes deciding on the appearance of the team's official merchandising, such as t-shirts, backpacks, caps, posters, etc...
Participation in voting for team actions.️
As is well known, in the world of sport in general, player number 12 is one of the most important players on the squad. Yes, we are referring to the fans, who thanks to the fan tokens can take part in the actions of a team. For example, you can decide what song you want to play during the warm-up and half-time of a soccer game, choose the celebration when scoring a point, where to place exclusive sponsorships on the field or on the shirt. The options are endless.
Discounts on merchandising and more.
As it could not be less, holding fan tokens also gives us the possibility of accessing exclusive discounts. These discounts can range from merchandising to tickets to events.
Tickets for team events.️
One of the benefits most valued by fan token holders. Giving fans the opportunity to attend a team event to support the team is a big plus of fan tokens. These events can range from a soccer match, a Formula 1 car race, an eSports event, or a UFC fight.
What are the main sports that have adopted Fan Tokens?
When the Fan token movement emerged, the first sports they reached were football par excellence, a sport that moves masses all over the world. Although little by little it expanded, currently reaching up to 10 different types of sports. Let's follow the cryptocurrency training to discover the different sectors of fan tokens:
Soccer.⚽
One of the sports with the most followers in the world. Football has been the sport that has moved the masses since its growing popularity at the beginning of the 20th century. They were the first fan tokens to be minted when the fan token phenomenon emerged. The pioneer teams in designing tokens for their teams were such as Manchester City ($CITY), AC Milan ($ACM), Juventus Turin ($JUV) or FC Barcelona ($Bar). With the arrival of the Qatar 2022 World Cup, Fan tokens were not going to be forgotten, we have already been able to see different tokens from World Cup teams, such as Argentina ($ARG), Brazil ($BFT), Portugal ($POR) or Spain ($SNFT). We also have two other teams that unfortunately will not attend the big event, such as Italy ($ITA) or Peru ($FPFT). These tokens have seen the global effect on their prices, for example, the Spanish token has risen more than 50% on the eve of the start of the competition.
On the eve of the opening of the World Cup, the Spanish token ($SNFT) appreciated by almost 50%. Source: Coinmarketcap.
American football.
We know well that Americans love to satisfy and involve their followers in the world of sports. As could not be expected, fan tokens also landed in American football, the variant of rugby that is practiced in the US with great media pressure, as we have seen over the years when the Super Bowl. A clear example of the ties between this sport and crypto assets was the advertising spot for the DVD logo sponsored by the cryptocurrency exchange Coinbase.
eSports.
The growing industry of professional video game equipment has expanded like wildfire over the last decade. We have already seen over these years that this expansion has been seen in the large mass events that have been organized or the huge amounts distributed in tournament prizes. Some of the most popular eSports teams with fan tokens are Natus Vincere ($SHIPS), Vitality ($vit), Team Heretics ($TH), OG ($OG), Alliance ($ALL), Endpoint CeX ($ENDCEX) or Made in Brazil ($MIBR).
Motorsports.️
The motorsport industry has also seen how fan tokens are here to stay. Motor sports such as Formula 1 already adopted fan tokens more than a year ago, when the Renault team was renamed “Alpine”, coinciding with the launch of its fan token ($ALPINE) in collaboration with Binance. Subsequently, the Aston Martin team also joined ($AM), Alfa Romeo ($SAUBER) or McLaren ($MCLs). The performance of the Formula 1 teams has been reflected in the valuation of their fan tokens. The adoption of fan tokens in this sector is no surprise, where cryptocurrencies established themselves a year ago with sponsorships in different teams or the competition itself, as Crypto.com did.
The bearish pressure of the cryptocurrency ecosystem along with the performance of Alpine is reflected in the chart of the $ALPINE token. Source: Coinmarketcap.
The bearish pressure of the cryptocurrency ecosystem along with the performance of Alpine is reflected in the chart of the $ALPINE token. Source: Coinmarketcap.
Hockey.
Another of the most popular and followed sports for Americans is ice hockey. Although it is true that it is a sport that is more similar to its northern neighbors (Canada), fan tokens have also joined the sport practiced on ice. At the moment, it seems that it has only become popular in the US, given that other teams in other countries have not shown interest in bringing fan tokens to their professional leagues.
Basketball.
The world of basketball could not be less when it came to incorporating the new fan tokens to provide the possibility for fans to take part in the team's actions. For the most part we can see the fan tokens of the American national basketball league, the NBA. Both football and basketball have been two of the sectors that have most embraced this innovation, being two of the most followed sports around the world.
The Golden State Warriors, current NBA champions, were the first to mint fan tokens in basketball. Source: Socios.com.
Fighting sports.
Fan tokens have also landed in fighting sports, such as the Professional Fighters League (PFL) or the better known Ultimate Fighting Championship (UFC). This sport, like football or Formula 1, has been one of the first to adopt these tokens and, in turn, blockchain technology and cryptocurrencies. We have clear proof of this in the sponsorship contract of the cryptocurrency exchange Crypto.com with the UFC.
One of the benefits of holding UFC tokens is being able to choose the official poster for the competition's fights. Source: Twitter.
Tennis.
In a more modest way, we can also observe how one of the most elegant sports of all, tennis, has also adopted fan tokens. These tokens offer their holders the possibility of accessing exclusive prizes such as attending a match in a tournament such as the Davis Cup (which has its own token, the $DAVIS), get an object signed by a professional tennis player or get a photo with your favorite idol. 2022/11/curso-formacion-inversion-criptomonedas-125.pngDuring the Davis Cup, holders of the $DAVIS tokens were rewarded with the opportunity to take a photo with their idols. Source: Socios.com.—
What is the future of Fan Tokens?
The Fan Token ecosystem still has a long way to go. Although since the beginning of 2020 with the launch of the first fan tokens by Binance, a market niche was discovered that many viewed favorably. It currently enjoys a total capitalization of $379 million, with a recent trading volume of $398 million. As we can see below, this capitalization may have decreased due to the collection of profits from the holders of World Cup team tokens or due to the end of the Formula 1 season. Likewise, we see how the trading volume has grown by 48% , clearly boosted by the opening of the Qatar 2022 World Cup.
Market capitalization and trading volume of the Fan token ecosystem. Source: Coinmarketcap.
At the same time, it should be noted that we are talking about one of the ecosystems that could grow the most over the years and with the adoption of fans. As we can see in the Google Trends search statistics, Fan Tokens have a long way to go to reach the search results that we can see in competitions such as the 2022 World Cup, Formula 1, the NBA or the UFC.
Comparison of search results for fan tokens with some of the sports it sponsors. Source: Google Trends.
But this does not mean that the fan token ecosystem is not popular, given that this ecosystem has been moving large amounts of money since its creation. As we can see on the Cryptoslam portal, the trading volume of fan tokens has been constant since its launch. It is true that at the beginning the figures were quite modest, exceeding 30 million in sales during the first three months. But if we look at the current panorama, in the month of November alone it has been possible to see a sales volume for a total value of 6.588 million dollars, which teaches us that this sector is little by little becoming more noticeable with the passage of time. of the months.
Graph with sales volume history and records from the last quarter. Source: Cryptoslam!.
Conclusions from this cryptocurrency training on Fan Tokens.
As we have seen throughout this training in cryptocurrencies, Fan Tokens are here to stay. The expansion of this asset class has grown rapidly in a short time, as we have seen in the different sports in which it has been adopted, together with the innovative NFTs that are usually marketed with the same objectives. Without a doubt, the fan token ecosystem has a long way to go, but the truth is that we are in a sector that encompasses sports, one of the most profitable market niches in the world. And we have good proof of its promising future in its sales records, where the trade volume of this ecosystem has been able to exceed 1.000 million dollars consistently throughout this last year, 2022.
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- We must verify the origin of the tokens to avoid falling into scams. Source: Coinmarketcap.
As is popularly conceived, the number 12 player is the most important of the teams, and the adoption of these tokens represents a before and after in the relationship of the fan with the team of his loves. To conclude this training in cryptocurrencies, we strongly remember to consult the sources of origin of new tokens that we can see in the ecosystem (such as Coinmarketcap or Coingecko), since where a trend moves, scammers will move in unison. The platforms that offer the trading of these tokens range from exchanges such as Binance or Coinbase, although we can acquire them directly from the original platforms such as Chilliz, belonging to Socios.com or Bitci, one of Socios.com's main competitors.