Fan tokens are a lucrative digital asset that transforms the dynamics of the relationship between fans and sports clubs, bands, or other passions. In the following sections, we’ll explore all they can offer.
What are fan tokens?
In a nutshell, fan tokens are a type of cryptocurrency or digital asset created using blockchain technology. They are created to empower fans to engage with their favorite sports teams, clubs, or celebrities by granting different access rights, privileges and other perks.
Those who own such tokens can use them to access exclusive content, participate in polls and surveys, and even vote on certain decisions related to their favorite teams or clubs. For example, fan tokens may allow fans to vote on which charity to donate to, which player to sign, or even which jersey design to use for the next season.
How do fan tokens work?
Fan tokens are usually issued by organizations and are sold to fans through an initial coin offering (ICO).
They can be traded on cryptocurrency exchanges, which means that their value can fluctuate depending on market demand. But they differ from typical cryptocurrencies that have their applications in payments and financial services. Rather, fan tokens are designed to serve specific functions in a closed system.
We can aptly compare them to DAO governance tokens because, as mentioned above, a fan token can give its holder certain rights, most notably, the right to vote on various community-related matters concerning their favorite sports club or celebrity. These may include merch and kit design, tour dates, giveaways and so on. In this way the tokens boost fan engagement and strengthen the club/celebrity-fan relationship.
Popular fan token platforms
A number of fan token platforms can be used to acquire these digital assets. Perhaps two of the most eminent ones are Socios and Binance Fan Tokens.
Created by Chiliz, Socios is undoubtedly the market leader in fan tokens. The platform has successfully partnered with some of the world’s largest and most popular soccer teams, like FC Barcelona, Inter Milan, and Manchester City.
At the same time, the crypto exchange Binance is also competing in the market with Binance Fan Tokens. Some of the partnerships it has established include FC Porto, Alpine F1 Team, and Santos FC.
Other platforms include Zipmex, Phemex, and Cryptocap.
Fan token use cases
Although we’ve mostly mentioned sports as the main industry where fan tokens can be utilized, they’re also popular in the gaming, music, fighting, and movie industries. They offer a range of membership perks like rewards, merch designs, unique experiences, and voting rights.
For example, they are used by gaming applications and e-sport teams to encourage fans to take part in the community. Names like Team Alliance and Team Heretics are just two examples of those that are already jumping on the bandwagon of fan tokens.
The examples are a lot more in the sports industry. More than 20 football clubs, including PSG, AC Millan, Manchester City, and FC Barcelona have created their unique fan tokens. In the fighting space, UFC and PFL have adopted the technology, encouraging more people to actively participate in chats and polls in established MMA organizations
The future ahead
Overall, fan tokens are an innovative application of blockchain technology that has the potential to change the way fans interact with sports teams and celebrities. Their potential has become even more evident in recent years, with the COVID-19 pandemic making it more difficult for fans to attend live events, thus forcing sports clubs to find alternative ways to connect with fans.
And as more sports clubs and celebrities become aware of that potential, interest in fan tokens is likely to increase in the coming years.