Blockchain technology has become a bit of a buzzword around many corporations and enterprises, but the scope of this powerful technology is disrupting more than just big business. The potential of technology is spilling into the sporting arena with football tickets distributed on the blockchain, tickets being available for Bitcoin, and blockchain fan tokens all viable opportunities for teams.
As the world continues to digitize, and different sectors and industries become more reliant on technology, they begin to look at the next generation of digital technology. Within the sporting realm, digitalization has been directly felt with the emergence and rapid growth of e-Sports, but even traditional sports are getting online more.
The ability to leverage digital and new technologies is allowing sports teams, and the accompanying businesses, to engage and monetize their fan base further. The current COVID-19 pandemic has proven just how essential a strong and supportive fanbase is, a fan base that can survive on more than match days alone.
Sports teams are also realizing that the need for secondary revenue streams has never been more important. It is through the digitalisation of fan experience and engagement that this can be met. As the world becomes more digitized, so the consumers also look for more digital solutions — and sports fans are no different.
Blockchain Fan Tokens are one such wave sweeping the sports world. They have already started gaining traction at some of the world’s biggest sports teams; UFC, FC Barcelona, Juventus and PSG are just a few examples of major teams and organisations already reaping the benefits of blockchain fan tokens.
What are Fan Tokens?
So, what is a fan token? The term ‘fan token’ is quite explanatory as it refers to a token, which can represent value and ownership, that a fan of a specific sports team, owns and gains value from. From this simple explanation, there is a broad spectrum of uses and benefits.
These tokens are finite digital assets that can be bought, sold or exchanged by fans to create a team-based economy. They can also then work as a currency and be interchangeable for merchandise, collectables or exclusive interactions.
For the user of these fan tokens, there is no confusing blockchain or cryptocurrency interface to worry about as they are as basic as points on a mobile app that can be topped up or awarded. It is the back end that holds the powerful technology that never needs to interact with the fans.
In a blockchain sense, there are utility tokens, and there are security tokens. The Fan Token is usually a utility token and this again gives a hint at what these tokens can offer — utility. Tokens created on a blockchain can be programmed to have many different uses for the fans and can offer exciting benefits and bonuses not possible elsewhere.
Other than just the monetization of these tokens for use in a fan token economy, the blockchain aspect of these tokens means they can be used for non-critical voting and other levels of engagement.
But there are benefits and utilities too that are currently unmatched without blockchain technology in sports. Most importantly, this new team-based economic ecosystem can turn into a new revenue stream for teams. The creation of these tokens, for instance, can provide a massive capital boost when they are first sold. For example, Barcelona’s fan token sold out, and earned them $1.3 million, in less than two hours.
By offering new forms of engagement with fans, fan tokens are incentivized to be used for buying merchandise, entering competitions, and even voting in polls and other non-critical or collaborative decisions — such as which song is played when a goal is scored.
Why use blockchain?
Tokens are nothing new, and using a traditional token in a sports team setting is quite possible, but the recent boom in these tokens has come off the back of blockchain technology for a very good reason. Blockchain use cases in sports offers an already-made, and programmable, economy through the distributed ledger. Furthermore, the tokens have a vast utility that can be enacted without the need for intermediaries or additional cost and effort.
The token economy and distributed ledger enables the fan tokens to be monetized similarly to Bitcoin, but the utility of the token also means that they can be used for voting rights, fan, sponsorship and ownership engagement as well.
Blockchain is also well regarded for its community and democracy and for this reason, blockchain in the sports industry makes sense. For a sports team and a fan base, this is well suited. Putting forward a fan token for a team emboldens the community spirit and creates a stronger sense of belonging through added engagement.
This visible community spirit and a higher level of engagement can also act as a lightning rod to new fans, and fans from across the globe. It is a new method of engagement for fans that have not got the opportunity or access to be a part of the team, other than through digital engagement. It suddenly becomes a lot more than just attending matches in the given city.
Finding the right solution
One criticism of the blockchain space is that it is still too nascent and new for major businesses, and even sports teams, to actively pursue just yet. But this narrative is waning. In fact, the narrative is changing as sports teams clamour to create a fan token in order to leverage new opportunities and gain a competitive edge.
Blockchain is a powerful business tool, and its potential is being released already by some of the world’s leading teams. Barcelona, with its $959.3 million in revenue from 2018-19, has already had its successful $1.3 million Fan Token launch.
The demand for such tokens is high from fans; the solutions on offer from providers are at a very professional level, and the potential for teams is massive as providers can do so much with the disruptive blockchain technology.
Protokol’s Blockchain Fan Token Solutions
At Protokol, we dedicate our work to providing enterprise blockchain solutions for the sports industry. By providing a professional service in a nascent technology we know there is a lot to be done, and a lot that can be done. So, by leveraging market-leading blockchain platforms, we create solutions (such as fan tokens) that are tailor-made for your sports team.
Sports teams are under pressure in the current climate, and even before COVID-19 the business of sports was incredibly competitive. This has forced teams to look to other areas to boost revenue, engage with fans, and become more global. The fan token has emerged as the leading opportunity to tick all these boxes.
Our blockchain and business experts understand the requirements of teams looking to get ahead and leverage this new technology. We know how to take a project from testing to implementation and into full production in line with the clients’ needs and focus.
If your league or team wants to understand in greater detail how blockchain technology can help address challenges and help achieve your strategic priorities, have a conversation with our experts. We’ll help you explore how blockchain tech can help you engage with your fans, reward loyalty, drive better ROI for sponsors and leverage new revenue streams.
In fact, take it a step further and book a free video consultation to truly understand the scope of Protokol’s potential for your team or organisation.