The fan tokens are an attempt by soccer clubs to increase their fans’ loyalty, even in America or England. It’s about much more than increasing their own revenue. The token gives owners additional privileges and special offers and allows them to participate in voting. They get something very unique and special that sets them apart from regular ticket buyers. Clubs usually enter into partnerships with crypto companies, which provide the platform for trading the tokens.
Football clubs with their own cryptocurrencies
Among the clubs with their own cryptocurrency is Paris Saint-Germain, for example. PSG’s own token has been available for purchase since January 2020. Owners of the token get the right to participate in polls on platform Socios and get access to special merchandising offers.
Football fan tokens – the list
We have compiled a list of the main football clubs that offer their own tokens:
The table is not exhaustive. It will not remain with the listed clubs. The list of clubs with their own token is growing. English clubs like Manchester City are also involved in tokenization. American soccer clubs are likely to follow soon. Whether the trend will be successful in the long run remains to be seen.
The financial benefits of fan tokens
So far, the tokens have been a worthwhile source of revenue for clubs. FC Barcelona sold its cryptocurrency within 20 minutes, taking in around $1.3 million. Similar to an IPO, clubs use the revenue to self-finance. This is sometimes sorely needed, as the Corona crisis has caused many revenues to disappear in 2020-2021. Juventus Turin manager Giorgio Ricci, for example, told Reuters that cryptocurrency is a longer-term solution. And one that isn’t just designed to bridge the pandemic revenue shortfall. One benefit for fans is that it will allow fans to participate in the club who otherwise wouldn’t be able to get to the stadium.
Football cryptos and the market fluctuations
For football clubs, then, fan tokens serve a similar function as stocks. Just as the value of a stock can rise and fall, cryptocurrencies are also subject to constant fluctuations. However, these can be even more violent than the fluctuations on the stock market – the volatility of soccer cryptos is sometimes enormous. In addition, there is another problem for the clubs
- Shares in football clubs depend primarily on the success of the club and its players
- With tokens, on the other hand, the general crypto market is decisive for the price
Fans are not always enthusiastic about the financial intentions of clubs: Borussia Dortmund’s fan token, for example, failed to catch on as the club’s management intended.
Distortions in the crypto market
Certainly, demand from club fans also plays a role. If you look at the prices of PSG, BAR and ASR, the following is noticeable: the ups and downs of the prices are very similar to other coins in the same period. So, if the overall crypto market is in a good mood, it will have a positive effect on the tokens of the football clubs and vice versa. However: many of the football cryptos suffered harsh losses that were more severe than other coins and tokens at the same time. The losses were recovered by some of the tokens over time. So investors who kept their eye on the ball were able to sell again at a significantly higher price. The question remains for investors, however, whether soccer cryptos are suitable as a long-term investment or whether the whole concept is just a short-lived trend.
What do fans receive for their football tokens?
Unlike a stock, token holders don’t get paid any returns. Instead, they get a number of privileges. These include:
- Special voting.
- Participation in exclusive events.
- Meet and greets or live chats with players.
- Exclusive merchandise and discounts in the fan store.
For example, in December 2020, PSG token holders could vote on what message should be written on the captain’s armband (the choice was: “ICI C’EST PARIS”). At Juventus Torino, it was up to the token owners to decide which songs should play as the victory anthem. They chose two pieces of music by the British band Blur. With such and other votes, the supporters of their club have the opportunity to actively influence the external image of the team and put their own stamp on it. This works in a similar way with Formula 1 tokens.
What are the risks of football cryptos?
Other rewards include the chance to meet the team or individual players. If a meet and greet is not possible, then a live chat may be an option for token holders. There, only they are allowed to get in touch with the players. Furthermore, special fan merchandise, such as signed jerseys, beckons. Should the fan turn away from his favorite club at some point, he can still sell the cryptocurrency and thus lose all the privileges associated with the tokens. Of course, there are also risks: those who lose their accesses suffer a total loss. Also, it is not guaranteed that one can actually sell his fan tokens. The risk of loss must therefore be assessed before an investment is made.
What is the role of Socios in fan tokens?
The Socios platform is an important partner for many football clubs with their own fan tokens. Socios is a website and app for football and its fans. Here, the various club cryptos can be bought and sold again. When a new football token is launched, the clubs use Socios as a platform for their “Initial Fan Token Sale” (FTO). However, they don’t buy them with their credit cards or fiat currencies. They rely on Chiliz (CHZ). Interested parties sign up on Socios or download the app, register, and then purchase Chiliz. We have provided a guide to Socios for our readers.
Other Echxanges get in on the action
Binance is now also getting in on the action. Probably the largest crypto exchange in the world supported Socios.com and the Chiliz platform at the launch of the FC Barcelona token. Some fan tokens can since also be bought on Binance with Bitcoin, Tether (USDT) or Binance USD (BUSD). The Turkish NFT platform Bitci also plans to list its own football tokens in the coming years. The national soccer teams of Uruguay and Brazil have already signed up.
Chiliz as an exchange currency
The cryptocurrency Chiliz can be purchased on Binance, Coinbase or with the Socios app, among others. Users deposit euros on the app and use them to buy CHZ. They then exchange them for the desired token using the app. Chiliz aims to bring blockchain-based products and services to mainstream users. The project focuses on entertainment, sports and alternative payment methods.
Ethereum’s token standard
Chiliz is an ERC-1155 token based on Ethereum. As such, the tokens rely on the Ethereum blockchain. If fees within the Ethereum network increase or transaction congestion occurs, then this will also have a negative impact on the trading of the tokens. It is possible that Ethereum will be able to overcome these obstacles with future updates. Besides, there are already a number of other blockchain platforms with token standards of this kind that could offer themselves as alternatives.
Fan tokens are NFTsFan tokens are NTFs (non-fungible tokens). "Non-fungible" in this context means something like "not exchangeable". They are unique tokens with clear ownership. Normally, one token or coin is no different from another. NTFs are different: each of them is unique, indivisible and cannot be mixed with other NTFs. Thus, there are also tokens for wine or games. Shoe tokenization is also a new trend.
FAQ – Frequently asked questions
The Socios platform, for example, offers the purchase of football cryptos via its own app. Here you buy the cryptocurrency Chiliz (CHZ) and exchange it for the desired token. Chiliz can also be purchased on Binance and other exchanges. Socios offers its own wallet for storing the token.
As with other coins and tokens, the value of football tokens depends on supply and demand. There is no fixed price, instead the price fluctuates depending on the market situation. If demand increases, then the price also increases; if it decreases, then the tokens are also worth less. In addition to the demand for the tokens, the overall situation on the crypto market also plays a role.
Since this is a fairly young phenomenon, it remains to be seen how well the tokens will do as an investment in the long run. So far, they have experienced both their ups and downs. The overall market sentiment has played a role, as have investor interests. The tokens have already proven the potential of enormous price gains.