No doubt, you’ve noticed the absolute pandemonium in the crypto space this past week or so… it seems to be the “crypto winter” that just keeps giving. Luckily, most of us can stand a safe distance back and take in the changes knowing that the growing pains are leading to bigger, better things. What does this mean? That things aren’t as bad as they seem. In fact, we’d think it a little bit suspect if such a young space didn’t experience some growing pains.
Indeed, we see things differently. We see a space that’s growing, figuring out what doesn’t work, and what does. We see those nuggets of goodness emerging from the turmoil, and we’re looking toward the future of the space and what could be. So, in that spirit, this week we’d like to bring you information about a token in the space that is acting as a shining beacon for all who love the blockchain to see… fan tokens. What’s that? Well, we’re here to tell you.
A fan token is a new avenue for creators, brands, and fans to connect…. they act as a type of cryptocurrency that awards membership benefits to holders. For example, you could hold fan tokens for your favorite sports team, musical group, artist, or any figure or organization you love and want to interact with. Examples of benefits that are awarded to token holders are things like prize giveaways, trips with a celebrity, exclusive content, and the ability to have a say in certain decisions.
These tokens are really cool, and when paired with NFTs, are lighting up fan engagement. And we’re specifically interested in how this is playing out in the sports space, where these tokens are yet again changing how the fame game is played. According to industry data aggregator CryptoSlam, monthly volumes for global fan token sales went from $2.2 billion in January of this year to a massive $6.4 billion in September… compare that to NFT sales, which have all but collapsed.
The Secret Sauce
It’s important for us to interject here that, it’s not that NFTs don’t have value. That’s not why the space is struggling right now… rather, it’s that NFTs are finding their place and usefulness in the space. Fan tokens present a way to marry the two in what could be a more useful, meaningful synergy for both creators and users. Fan tokens differ from NFTs in a few ways that make them valuable and useful in ways that NFTs alone cannot be.
You see… fan tokens are interchangeable “fungible digital assets”, and tokens always hold the same given value. This scales really well, and it works like a dream for the intended purpose of the assets. Furthermore, unlike NFTs, it doesn’t cost all kinds of money to mint these tokens, which is a primary hindrance to NFT scalability. These two tools, working in concert, have the potential to play a powerful role in brand and creator engagement. Since fan tokens are a product, they can be used to acquire NFTs, which are a technology.
The Perfect Pair
Cryptocurrencies and sporting events are partnering up, and there is money to be made. In fact, cryptocurrency sponsorship is the quickest growing segment of sports marketing. But, unlike other coins, fan tokens have immediately evident utility, and this is making for the perfect pair in the blockchain sports space. As we’ve said before… in this space, if you can dream it, you can make it. If you can make it, you can make money from it. With these tokens, in this space, the flocks are coming and there is opportunity.
Both Gen Z and Millennials spend plenty of time in the sports and the crypto spaces… so the partnership of the two, and new avenues for engagement being born, seem to be only natural. As Chief Executive Officer of StormX, Simon Yu, has pointed out, the opportunities in the space abound, and these teams and professionals are chomping at the bit to get to and satiate these younger, hungry fans. The combination is win-win.
Seeing as how Mr. Yu’s StormX (a software that allows users to earn crypto as they shop) is a sponsor of the Portland Trail Blazers, we think he knows what he’s talking about. The numbers back him up and tell the story for him: the sponsorship of sporting events is a global industry worth $40 billion… of course crypto belongs there, of course fan tokens make sense. If that isn’t enough to convince you… in the last year alone, over $3 billion was spent on sports sponsorships, and most of it was contributed by crypto companies.
Could fan tokens become a staple of the blockchain space, especially when it comes to sports? We think so, at least in some capacity. As we see these initial features roll out with these tokens, we’ll no doubt see smart people in the space think up new ways to engage with fans and utilize tokens to make connections more meaningful. We think it’s a great idea and has the potential to evolve into something truly special… come back next week. We’ll have more from the world of crypto, and we’ll bring it straight to your inbox. See you then!