Our previous piece entitled ‘Cryptocurrency’ discussed how digital assets work in terms of being a medium of exchange for financial transactions. While crypto is exciting, it is highly volatile as demonstrated in the quick rise and fall of their prices. Last November 2021, Bitcoin reached its all-time high above €66,500, only to fall to its present value today of €22,700 (August 2022). This demonstrates the instability as well as how cautious one should be when pouring money into such types of digital assets. But not all digital assets are plummeting, one sector within the crypto market that is doing well is fan tokens.
Fan tokens give supporters more then just monetary gains. Fans can participate in polls, gain rewards, and make club decisions, which are priceless for passionate fans.
According to BeInCrypto.com, the total sales of fan tokens reached €3.4 billion in March 2022, and one month later in April global sales was up €1.85 billion, thus hitting a new record high. This naturally makes one wonder what it is about fan tokens that makes them seem immune to a bear market. What are they and are they worth considering for investments? Read on to find out more about these unique forms of crypto.
What Are Fan Tokens
Fan tokens are blockchain based digital assets that give owners special rights, like voting privileges, when it comes to minor club decisions. Sports enthusiasts all have favourite teams, and if someone owns the fan token of their favourite team, this grants them access to many VIP rewards. But the fan tokens themselves are not identified as crypto; the cryptocurrency is Chiliz ($CHZ).
If someone wants to own a fan token, they must first install the Socios app onto a mobile device. Next, they can purchase Chiliz, which is the in-app proprietary currency, and use Chiliz to purchase the fan tokens they fancy. Once purchased, the fan tokens never expire, thus giving the owner access to their favourite team, forever. These are the newest developments in sports digital currencies, and they’ve taken the global market by storm.
How Do They Benefit Fans
The primary goal of fan tokens is to bring fans closer to their favourite team by giving them direct access and including them in the club decision-making. As a specific example, in Italy the Inter fan token allowed supporters to vote on a new goal song at the stadium, which historically hasn’t changed for the past eight years. Inter also reached out to fans to choose the kit design for the upcoming season. Other votes across Europe have given fans a say over which design the new player’s tunnel at the Libertadores de América should have. As you can imagine, die-hard fans would take a lot of pride in being able to make these decisions.
How Will They Perform in the Future
Socios has announced plans to expand fan tokens internationally and reach major sports clubs and leagues across the globe. In rugby, Socios has already signed English Premiership clubs Leicester Tigers, Saracens, and Harlequins. Socios CEO Alexandre Dreyfus has his targets set on the U.S. sports industry and confirmed the company’s expansion overseas to New York, investing €48.7 million. He mentioned plans to make deals with five major U.S. sports leagues, but did not specify which ones. Whichever leagues they are, it wouldn’t be surprising if it was the major sports league looking at Socios track record.
Fan tokens give supporters much more for their money than other digital assets. Fans can participate in polls, gain rewards, and make club decisions, which are priceless for passionate fans. Perhaps this is the reason why fan tokens can hold resilient amidst a bear market.