A look at the future innovation direction of fan tokens under the World Cup Upsurge
The sports industry has long been a hot demand market, and the large base of native fans and huge development prospects have made the Crypto pay attention to and build the sports field. In reality, there are many incidents of crypto circles cooperating with other teams or stars, such as crypto.com's naming of Los Angeles Lakers' home arena, Binance's endorsement of soccer star Cristiano Ronaldo, and OKEX's cooperation with Argentina's national team. Against the background of the upcoming 2022 Qatar World Cup, fan tokens of the World Cup concept have naturally received market attention. In this article, we look at the major fan tokens to find out the commonalities and potential innovation directions.
After a global epidemic that caused zero ticket revenue from empty games and greatly impacted club finances, clubs around the world are actively looking for another revenue stream beyond broadcast and ticket revenue, and fan token sales could be the new path. According to Socios.com, various fan tokens generated nearly $200 million in revenue for its partner clubs in 2021. In reality, we often see many teams are afraid to make big transfers or are on the verge of bankruptcy due to financial pressure, and through fans buying fan tokens to raise funds for the team, the team can sell fan tokens to help with the team's player transfer matters and financial difficulties.
Whether incubated at Binance or at Chiliz, the fan token role has certain commonalities. As the name suggests, fan tokens are built with a fan-centric approach to improving fan experience and engagement that aspire to turn fans from passive receivers to active influencers.
The increase of fan participation can be reflected in affairs decisions. Fan token holders can participate in some of the team's decisions, such as the selection of the best player of the month or match, the team's motivational banners at home, the season's full posters, and the warm-up tracks, strengthening the connection between the team and the fans. Moreover, by holding fan tokens you can enjoy fan discounts such as discounts on home VIP tickets, the opportunity to meet soccer players, for example, one-on-one with star Immobile at LAZIO, and other benefits. In addition, fan tokens can be used to collect club-related NFT and showcase one's unique club NFT through a Fan profile, which can be used as a social business card to show a fan's personal loyalty to the club.
However, actually most of the fan tokens are simply transferring the off-chain IP to the on-chain. The token holders' rights and benefits are not much different from offline members' rights and benefits, such as team peripherals, choosing captain's armband pey patterns and other such special benefits are not immediate needs or rare things for offline members' fans, and the fans' demand is not very enthusiastic. And in clubs that place more emphasis on tradition, tokenization of club governance rights can lead to opposition and even loss of loyal members. In the emotion-driven, speculator-dominated fan token circuit, uncertainty is high, and holders need to bear the risk of coin price fluctuations on their own, so it also leads to the fact that long-term fan tokens are mainly held by a small number of die-hard club fans in the Crypto.
In addition, most Fan Token communitie ares still relatively inactive, even on the team's official Twitter feed, where activity in the comments section is still low. Actual user activity is also low when it comes to using fan tokens to participate in voting governance activities. In voting with the S.S. Lazio Fan Token, the total number of votes per activity averaged no more than 1,000 votes, both in specific matters and in the best player selection. Despite the banner of serving the fans, the activities of the project that the holders can reach have little weight of participation, and what they can vote on are minor and insignificant matters, and the holders have no real right in the participation of the club in important matters.
The "NFT + Fan Token" model: The explosion of the NBA Top Shot demonstrates the fan frenzy for collecting NFTs in the Paninica style. In the case of the Porto (PROTO) fan token, fans can use fan tokens from the Binance platform to buy the club's NFTs or blind boxes to obtain scarce NFTs, both to satisfy the collector's sentiment of some buyers and to get a high return in the market. At the same time, you can also stake NFT in NFT PowerStation to get the rewards of that fan token. Depending on the rarity of NFT representing the level of fan power, the higher the fan power the more fan token rewards the user collects after staking, and the fan gets passive income.
The "DAO + Fan Token" model: Fan token can go beyond participation in a handful of team affairs to create a DAO to crowdfund the acquisition of a team for full operation. It is what the Krause House DAO tried to do when they aimed to buy an NBA team and raised a maximum of 1,000 ETH in just six days during the crowdfunding process. Although the acquisition of the team is still a long way off that doesn't stop us from envisioning an expansion of fan token holders' rights after the team is acquired -- fan token holders can share the team's operating income equivalent to the shareholders' income, achieving the alternative "Entertain to Earn". The majority of the team's decision-making power is truly delegated to the fan base, which participates in major team decisions through collective democracy, while blockchain-based voting is transparent and fair to avoid the corruption that can easily occur in traditional team management.
We can also find activities similar to on-chain betting in the market, such as using fan tokens to get NFT for guessing game wins and losses, and destroying tokens when teams score goals in the game. On the whole, the functions of different fan tokens are basically homogeneous, and the innovation also stays more in minor tinkering with the original basic functions. But even in the crypto winter, soccer fan tokens are still worth looking forward to as a few hot narratives with the World Cup upsurge.