Author: Alexandre Dreyfus, CEO of Chiliz
Blockchain technology has reshaped various industries that implement it, from financial services to entertainment. This revolution is particularly evident in the way sports fans interact with their favorite teams, providing dynamic and direct engagement experiences through fantasy sports games, digital memberships, and digital ownership of sports memorabilia, transforming passive viewers into active participants.
Although NFTs have experienced significant volatility since their inception, fan tokens have continued to develop steadily, not only surpassing their Web2 counterparts but also offering fans a truly engaging experience through ownership participation.
Data from CoinMarketCap shows that fan token trading volume exceeded $1 billion in just 24 hours, highlighting a strong secondary market and a growing community of enthusiastic and crypto-savvy sports fans.
One of the most significant advantages of blockchain is its ability to break geographical barriers. Traditionally, fan participation in team activities was limited to passive viewing and local consumption. Blockchain technology has dismantled this barrier, allowing fans from around the world to actively participate in team activities and decision-making. This creates a sense of global community, which is particularly beneficial for fans living in areas where their favorite teams are not well-known.
Even in countries like the UK and Italy, which have local clubs, fans eagerly follow foreign teams. For example, Tottenham Hotspur has a large fan base in South Korea. Through blockchain technology, fans from any corner of the world can now actively participate in the decision-making processes of European football clubs, bridging the physical distance with digital connections.
A 2022 study titled "The Psychology of Fan Engagement" found that 63% of sports fans reported that emotional connections with players and teams enhanced their overall sports experience. Globally, 83% of fans believe that the teams they support could do more to enhance engagement, and 24% specifically requested the establishment of loyalty programs and reward mechanisms. Blockchain deepens emotional connections by making fans feel more involved and invested, fostering a more passionate and loyal fan base.
Fans are demanding deeper interactions with sports clubs. When asked about their expectations for future sports consumption, 67% of fans want a more interactive experience, 57% want easier access, and 54% believe it should be more immersive than it currently is. The same study showed that 61% of Gen Z sports fans would create their ideal experience at home with friends and family, indicating that community experience and social interaction are also core elements of Gen Z's entertainment experience.
The era of passive fandom has ended. Blockchain-powered fan tokens empower fans to actively participate in team decision-making, such as voting on team jerseys or match day experiences. In addition to voting, platforms offer various innovative ways for fans to interact with teams and players. Clubs like AC Milan and Real Sociedad provide fans with the ultimate match day experience, such as announcing the starting lineup during home games.
Atletico Madrid and AS Monaco allow fans to appear in official team photos, truly becoming part of the team. These unique opportunities go far beyond traditional fan voting, deepening the interaction and connection between fans and their favorite teams.
Blockchain technology is fundamentally changing the realm of digital and physical sports memorabilia collecting. Digital tokens and collectibles associated with classic moments, sports stars, or major events mark a new era for the sports memorabilia industry. Blockchain authentication technology gives these assets verifiability and tradability, allowing fans to truly own a piece of sports history.
For example, fans can now collect the football used by Romelu Lukaku when he scored his first goal of the season in Serie A. The Korean K League has launched blockchain-based player and team trading cards. These digital cards can be traded on the secondary market, providing fans with a new way to interact with their beloved sport while potentially gaining investment returns.
Research indicates that by 2028, the blockchain sports market is expected to maintain a compound annual growth rate (CAGR) of 9%, demonstrating strong growth potential. Blockchain-based sports applications are rapidly increasing, and digital ownership holds a bright future in the sports industry.
Top sports brands like Paris Saint-Germain, Barcelona, and Formula 1 are leading the trend of blockchain technology application. Building an ecosystem supported by all clubs on blockchain has significant advantages. Although clubs compete with each other on the field, they need to work together to enhance the fan investment experience. Similar to social media platforms, a Web3 environment can cultivate network effects, allowing clubs and fans to interact in a shared space.
Web3 technology enables clubs to truly grasp direct connections with fans. Leveraging this unique advantage, clubs can offer personalized experiences that resonate deeply with their fan base. Deeper fan engagement, unrestricted interaction, and digital ownership collectively create a more inclusive and interactive global fan environment. As more sports brands adopt blockchain technology, its mainstream application will accelerate, further solidifying its position as a foundational element of the global sports industry.
Alexandre Dreyfus, CEO of Chiliz, is a digital entrepreneur with 30 years of experience in the gaming, sports, and entertainment industries. He founded Chiliz in 2018, establishing blockchain-based fan engagement partnerships worldwide.
Related: There is a disconnect between cryptocurrency adoption metrics in India and the actual market conditions.
This article is for general reference only and should not be considered legal or investment advice. The views, thoughts, and opinions expressed in the article are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original article: “Fan Tokens Offer Stability — NFTs Have Not”
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