Blockchain is an incredibly adaptable technology with many applications across various industries. Blockchain in motorsports, for example, offers several compelling use cases that are rapidly gaining traction among teams, drivers, fans, and other industry participants. Let’s take a closer look…
Like so many other sporting disciplines, motorsports have taken a significant hit on revenues over the last 18 months. Even as many other countries start loosening restrictions, the Australian F1 Grand Prix, scheduled to take place in November 2021, has now been cancelled. Where events have taken place, they’ve been mainly behind closed doors, meaning a total loss of ticket and merchandising sales on race days.
Furthermore, with an unreliable events calendar causing ongoing frustrations around the globe, teams have struggled to engage fans. Many are turning to new digital strategies that can help to develop remote connections with supporters and begin to claw back some of the lost revenues.
Blockchain-based tools can play a central role in any digital fan engagement strategy. They offer innovative new ways to create rewards and merchandise, which cater to the preferences of a global, digital-native fan base. There are also opportunities to explore new avenues of financing, create efficiencies in bringing vehicles to the track, and make innovative use of analytics in crunching driver and race data.
1. Fan Tokens
Fan tokens, a branded cryptocurrency token based on the blockchain, have already arrived in the Formula 1 ecosystem. In May 2021, Aston Martin and Alfa Romeo became the first F1 teams to adopt this burgeoning trend.
Fan tokens allow fans the opportunity to purchase exclusive access to their team or driver, perhaps in the form of behind-the-scenes interviews, shoutouts on social media, meet-and-greets, or whatever activities excite fans the most. Fan tokens can also convey rights to participate in votes or polls, and allow fans to own a speculative asset that’s linked to their team’s brand.
Aston Martin and Alfa Romeo join a raft of major soccer clubs that have also issued their own fan tokens, including Manchester City, Juventus, and Paris Saint-Germain.
2. Digital Collectibles (NFTs)
Not to be confused with fan tokens, non-fungible tokens, or NFTs, offer the opportunity to create scarce or even unique motorsports-themed digital collectibles. Once again, Aston Martin is blazing the trail in the motorsports space with this concept.
The team created a series of pieces of digital content from behind the scenes of its preparations for the 2021 season. Aston Martin then minted and sold this content as exclusive motorsports NFTs to fans.
Another example of racing NFTs could be digital collector’s cards of drivers. Thanks to blockchain technology, NFTs are provably scarce and indestructible, offering fans the opportunity to own a piece of digital content they can treasure.
3. Transparency in Manufacturing and Supply Chain
Blockchain is already used by large vehicle manufacturers such as BMW to help bring transparency and traceability to supply chains. There are thousands of parts involved in building a racing car or bike, and tracing the origins of each piece based on paper trails is extremely difficult, not to mention fraught with issues such as tampering and fraud. If a faulty part is allowed to enter the supply chain, the risks are significant.
Manufacturers are now collaborating on industry-wide solutions where each part has its own blockchain record, providing a secure and consistent means of tracing all components involved in a vehicle’s build.
4. Blockchain-Based Loyalty Platforms
Blockchain makes it easy to allocate tokens as loyalty points when fans take particular actions to engage with the team or driver. They can then redeem these points to spend on tickets and digital or physical merchandise.
The benefit for motorsports operators comes behind the scenes, as these loyalty schemes can also be used to promote engagement with sponsors. Because each transaction is recorded immutably on the blockchain, it allows teams to provide sponsors with a high level of transparency on performance metrics, allowing them to track fan engagement and return on investment.
5. Tokenization of Drivers or Teams
Blockchain can be used to tokenize almost anything—and that includes motorsports drivers and teams. In the case of an up-and-coming driver or team who finds themselves facing down the immense barriers to entry in motorsports, tokenization could be transformative as a means of crowdfunding.
It offers a means of appealing to supporters for financing, while ensuring a guaranteed payout once the operation is in profit, thanks to smart contracts on the blockchain.
Larger or more established participants could use the same principles to tokenize a share of their value as an entity, and donate the tokens to charity as a way of sharing profits with worthy causes.
Blockchain-based ticketing offers several advantages over centralized systems. For example, blockchain tickets are tamper-proof and cannot be copied or destroyed, making them more resistant to counterfeiting.
Ownership of a ticket can be assigned to an individual, making it difficult for touts to buy tickets in bulk and sell them on the grey market. With the transparency of blockchain, there can be no disputes over prices paid or who bought which tickets.
7. Phantom Racing
Phantom racing is a brand-new concept pioneered by a handful of forward-thinking blockchain motorsports projects. It uses a dedicated blockchain network to collect and store a huge amount of detailed data regarding how a driver performs on any given race track.
This data is then crunched and presented in a format that means driver performances can always be compared side-by-side. It doesn’t matter if they’re driving different cars on different tracks in different locations—phantom racing is a consistent measure.
8. Sponsorship Opportunities
Perhaps a less technological solution, but the blockchain and cryptocurrency space are currently undergoing record funding. As such, marketing budgets are healthy, providing the potential for sponsorship deals and other mutually beneficial collaborations.
A recent high-profile example is Formula 1 announcing Crypto.com as its global partner for the new Sprint series. Such deals and partnerships may also help to facilitate the process of motorsports operators launching their own blockchain-based fan engagement initiatives or other tools.
These applications illustrate that there are plenty of creative ways that blockchain can support the motorsports industry by offering fresh new means to engage fans, support incoming talent, and solve legacy problems.
Protokol delivers blockchain-based solutions to the sports industry, helping to engage fans, generate new revenue streams, and stand out from the competition. We can develop custom solutions that integrate with existing technology stacks and an end-to-end development service for seamless implementation. Find out more, or contact us now for a consultation.