In the world of sports and art, a new way of interacting with fans is emerging, supported by blockchain technology. It is called a fan token, with which you can influence the official decisions of your favorite team as a fan. This type of interaction between the team and its fans has appeared in the last few years and has experienced great success. Let’s see what it’s all about.
The relationship between fans and their favorite sports teams or bands is traditionally one-way. Fans buy tickets and merchandise, and the team or group raises money. Well, there’s a new type of cryptocurrency on the market—the fan token—that promises to change the dynamics of this relationship. FC Barcelona, AC Milan, Manchester United, and Manchester City are some of the big names that have already adopted blockchain technology for a more interactive relationship with fans.
Now, you can make some decisions and be part of the board. This could be a big step towards the future. Until now, fans could cheer in the stands and bet on their teams at popular online betting sites. Everything else was beyond their reach.
What are The Fan Tokens?
Fan Tokens are cryptocurrencies that give holders access to various benefits associated with fan membership, such as voting on club decisions, rewards, merchandise designs, and unique experiences. They can be used by sports clubs, music fan clubs, and other organizations to democratize and organize experiences, establish club leadership, and more. These fan tokens offer something for everyone. It is an opportunity for fans to determine in some (often trivial and legally non-binding) way the future of their favorite sports team or pop star and speculate on their success on Web3 markets. But this is an excellent opportunity to earn free money for a sports team or a pop star.
Unlike NFTs, fan tokens are completely “fungible”. This means that just like fiat or cash, you can exchange tokens for sports club merchandise, VIP experiences, and more. In addition, they play an important role in strengthening the club community.
Today, these tokens can be found everywhere, for example, in the aforementioned football clubs (Manchester City, Barcelona, Inter Milan), boxers (Manny Pacquiao), pop stars (DJ Khaled), etc. The fan token economy is unusual and unstable. Still, for some famous people or organizations, it has proven to be a lucrative source of income that keeps fans interested and engaged.
How Does Fan Token Work?
The basic idea is that an organization such as a sports team mines many fungible tokens (as opposed to non-fungible tokens—NFTs) and then sells or distributes them to fans or speculators. These tokens are often sold on secondary markets like cryptocurrencies, meaning they depend on regular market forces.
Once users have access to a certain amount of Fan Tokens, they can vote on various issues concerning their favorite club. Things that fans can vote on mainly depend on the individual club but can include club merchandise design, tour bus design, ticket sales, match locations, and MVP categories.
These benefits allow fans to feel more involved with the club they already support and add an extra level of pride and prestige, as the value of their fan tokens is likely to increase over time as the club grows. Fan tokens create an exclusive community of the most dedicated fans. They give fans a new way to participate in an exciting voting and reward system. The more fan tokens you have, the more influence you have on the club and the more loyalty you show to your team.
For example, Fan Token Paris St. Germain gives wearers access to exclusive VIP experiences and voting on the cover of the FIFA 24 Fan Edition. Fans also chose their slogan, which was displayed in the team’s dressing room at a match in May 2021.
What is Socios?
The Socios platform, created by the crypto company Chiliz, dominates the fan token market. This is because most of them are based on football – a sport where the platform has signed contracts with the best teams, including:
- FC Barcelona: The fans decided to paint the dressing room and the captain’s armband (which read “NO CHILD OFFSIDE”). In August 2022, Chiliz bought 100 million shares in FC Barcelona’s digital studio.
- Inter Milan: Fans voted on the first new goal celebration song in eight years, chose the team’s official bus, and decided on the shirt design.
- Manchester City: Fans chose the picture that hung in the players’ area at Wembley Stadium and voted for an editorial about Man City’s memorable season.
By participating in a number of surveys, fans can participate in draws for prizes such as VIP access to teams and exclusive promotions. Socios is not the only such platform on the market. In October 2021, crypto exchange Binance launched its fan token platform, Binance Fan Tokens. Alpine F1 Team, SS Lazio, and FC Porto tokens are available on it.
The aforementioned Chiliz describes itself as a leading provider of blockchain fintech services for sports and entertainment. Chiliz (CHZ) is the most popular fan token platform with its own blockchain. CHZ is a native ERC20 utility token on the Chiliz network. It is secured by the Ethereum blockchain and serves as the digital currency behind the Chiliz and Socios.com platforms. The token’s market capitalization at the time of writing is $1.2 billion.
Fan Tokens Are Not Limited to Sports Only
Platforms like Rally and Roll have been trying to popularize the idea of a “social token.” There the fans of pop stars and influencers can also influence their lives. Their success has not yet been great. Perhaps the largest is Rally’s management token, which has a market cap of around $100 million. This is because the benefits they provide (voting on band or sports team decisions) are relatively insignificant.
Governance tokens for decentralized finance (DeFi) projects allow owners to take the lead in managing their protocols. If you have enough of these tokens under your control, you could influence the use of a multi-billion dollar treasury. Also, you can have an impact far greater than the limited supply of fan tokens under your control. This, in turn, creates value. For example, CAKE, the managing token of the PancakeSwap decentralized exchange (DEX), has a market capitalization of 576 million dollars at the time of writing, and the UNI token (Uniswap) as much as 4.7 billion dollars.
Outside of sports, the Kpop Fan Token (KPOP) is quite popular. It is the original token of the KPop digital platform. KPop Digital is a new and innovative decentralized finance (DeFi) protocol that rewards every token holder with various possibilities. KPop Digital is a community-driven platform dedicated to sharing merchandise, exclusive access promotions, licensed digital photos and moments of popular KPOP idols, VIP events and opportunities to experience KPop in South Korea.
How to Buy Fan Tokens?
Fans must purchase CHZ through a cryptocurrency exchange to obtain fan tokens on the Chiliz network. However, some tokens exist outside the Chiliz network and their Socios.com platform.
These tokens are rare digital assets that provide access to an encrypted ledger of ownership of voting and membership rights. CHZ tokens can also be used to buy and trade different fan tokens on Socios.com. Fan tokens can be traded on Chiliz.net, their internal exchange and trading platform for CHZ tokens.
CHZ is offered by all major crypto exchanges: Binance, Coinbase, KuCoin, Huobi… When you buy a fan token, you get it in your Web3 wallet like any other cryptocurrency. If your fan token was issued by Socios, you can visit the Socios website or app and use the tokens there. For example, you can use these tokens to win rewards on the platform or participate in surveys. You can also sell them on the cryptocurrency exchange if, for example, their value increases.
Conclusion
Buying cryptocurrency is still a hazardous investment. It is already known that the cryptocurrency market is unstable. Meme coins are the most prone to drastic price swings. However, high risk can always mean high reward, as the price of some meme coins can skyrocket if they catch on and become even more popular. With any investment, it is always best to carefully consider the value and solutions that the product represents. Fan tokens can be less of an investment and more of a purchase of special benefits that sports clubs, music groups, and other artists may provide.
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FAQ
What is a fan token?
Fan Token is a crypto token that you use to influence the official decisions of your favorite teams. They offer you VIP prizes, exclusive promotions, etc… If you want to be part of a sports club, fan token is the perfect solution for that.
Can I lose my fan token privileges?
Fan Tokens are your digital ticket to your favorite teams. Unlike regular membership fees, these tokens never expire, and you can keep them. That’s what separates them from season tickets or some other things you might own.
Can I sell my fan token?
Once you earn fan tokens, you can use them over and over again. However, like any asset, you can buy and sell them. The price of these tokens depends on supply and demand. In fact, you cannot influence the price, but you can decide when and if you will sell them.
Is it a fan token a good investment?
Fan Tokens create an exclusive community of the most dedicated fans and give them a new way to participate in an exciting voting and reward system. The more fan tokens you have, the more influence you have on the club and the more loyalty you show to your team.
Is it smart to buy cryptocurrencies?
There is no universal answer to this question. Investing in cryptocurrencies is very similar to investing in stocks or gold. The point is to decide what your entry price is and how much you are willing to risk. After that, monitor the market and decide for yourself when it’s time to sell.
