Much like soccer tokens, opinions are divided among American and British fans of motorsports. For some, they are a way to interact with the team in a new way and even participate in important decisions. For others, they’re heavy-handed profiteering with no added value. We explain what Formula 1 tokens bring you and what are the pros and cons.
Cryptocurrencies in football
Necessity is known to be the mother of invention. Sports clubs are looking for new ways to make money. Some football clubs are launching their own fan tokens. Owners of these cryptocurrencies can participate in voting, get access to special events or discounts in the fan store. For the clubs, this offers a new source of income.
And now also in Formula 1
So it’s not surprising that Formula 1 is now following suit. And once again, the fintech platform Socios.com is playing an important role. There, fans in the U.S. and UK receive tokens of their Formula 1 team. “We started with football clubs, then we went into esports, cricket and the UFC – and now we’re going to Formula 1,” CEO Alex Dreyfus tells Motorsport-Total.com. Dreyfus had announced the collaboration with the first Formula One team in the spring. At the time, he remained tight-lipped about who it was. Socios.com conducted a vote in the so-called “locker room.” The question was whether users of the Socios app could imagine investing in a Formula 1 fan token. The answer was a unanimous yes.
At the start: Alfa Romeo and Aston Martin Cognizant
The first Formula 1 teams with their own cryptocurrencies are Aston Martin Cognizant and Alfa Romeo. The following features connect the tokens:
- Both tokens are based on the Chiliz cryptocurrency.
- Alfa Romeo released the “SAUBER token” in May
- Aston Martin launched the “AM token” in the same month.
- Two million tokens could be bought by fans at a sale.
To buy, you have to register extra on Socios. You can find out how to do that in our guide to Socios. Socios promises to release the tokens for regular sale in the future as well.
If you as a fan can have a say in decisions at the club, then we also want to guarantee integrity and fairness.Socios CEO Alex Dreyfus
Prices have fallen since then
But currently tokens from SAUBER or Alfa Romeo and AM cannot be bought on the platform. Those who did not strike in the summer when Socios offered them for sale at the token sale will have to be patient. Moreover, prices have fallen since then. It is possible that they will rise again when the tokens can be bought regularly on the Socios app. Then, as a motorsports fan in America or England, you could get in at low prices. And then sell the tokens again at higher prices, if that should be your strategy.
The role of the Chiliz token in Formula 1
Many fan tokens are closely linked to the cryptocurrency Chiliz (CHZ). This can be exchanged for the various tokens of clubs and teams. If you want to buy a token from Aston Martin or Alfa Romeo, you first have to buy Chiliz. This is available in the Socios app. Afterwards, you exchange it for the desired cryptocurrency. The blockchain securely records the transactions, as well as the ownership. You are then the sole owner of the cryptocurrency.
Formula 1 NFTs at Crypto.com
Socios.com has the most tokens on offer for Formula 1 fans. The platform has focused on football so far. However, over time, more and more tokens of other sports have been added. However, the competition is not sleeping. For example, the exchange platform Crypto.com has entered into a partnership with the Aston Martin motorsport team and has since listed the team’s NFT Collectibles. Here, special videos linked to NFTs can be purchased. However, these are not fan tokens in the true sense of the word. Because these NFTs do not offer the same features and privileges as the SAUBER token from Alfa Romeo or the AM token from Aston Martin.
What are the benefits of Fan Tokens?
There are several good reasons for motorsport enthusiasts to seek a bond with their favorite team using blockchain, says Socios CEO Alex Dreyfus: “If you can own something as a fan and have a say in decisions at the club, then we also want to guarantee integrity and fairness. That’s why all voting takes place via blockchain. No one can trick it.” Cryptocurrency blockchains aren’t just for sending bitcoin and other coins back and forth. They also record data transparently and tamper-proof. Fan tokens can be used to participate in voting, among other things. Either you, as the owner of the tokens, unlock this possibility or you have to spend them to get a vote.
Ownership of the Formula 1 token has been clarified
Clearly identifiable and clear ownership is an advantage of tokens and blockchain technology. When you hold a team’s token in your wallet, it’s all yours. Thus, it is firmly inscribed in the blockchain. Ownership claims are thus unambiguously clarified without much bureaucratic effort. The tokens can also be easily resold or shipped. This is also done without bureaucratic effort.
Bonuses for the fans
The Non-fungible Tokens (NFT) are unique, not exchangeable and marked with clear ownership. The fan thus has a special feature that not every other fan can call his own. Which bonuses the teams offer to the fan can vary depending on the team or club. At Alfa Romeo, for example, token owners gain access to the following areas:
- Special votes
- VIP rewards
- Exclusive sales promotions
- Augmented reality features
- Chat forums
- Games and contests
These features are available on the Socios platform and on the app. It doesn’t matter whether the owner is a member of the team’s fan club or not: possession of the token alone is enough to access these features.
Risks of Formula 1 tokens and fan mistrust
Fan NFTs are still a new phenomenon. It is impossible to say with certainty whether cryptocurrencies in motorsports will last in the future. To be sure, blockchain and cryptocurrencies have proven to be a lucrative alternative source of revenue in sports. However, many fans distrust cryptocurrencies. On the one hand, because they don’t understand the technology behind it. Because they fear risks. Or because they see the tokens as just another means by which Formula 1 can earn even more money. One thing is certain: Fan tokens are a way to generate revenue from fans even without ticket sales. Perhaps the tokens will even create a kind of “two-tier society” among fans.
Opportunities for motorsport tokens
At the same time, the tokens also offer new opportunities for fans to get closer to their teams and have a say. It is becoming apparent that in the future, teams and clubs will have to move in the direction of the fan community. Away from sponsors and towards direct contact with fans. To do this, they must also offer something that pleases the fans, involves them and inspires them.
McLaren tokens soon available via Tezos?So far, there are no tokens available from McLaren, but that could change in the future. In June 2021, the team announced it would be working with the Tezos blockchain to develop an NFT ecosystem. This is expected to be more environmentally friendly and use less energy thanks to Tezos. What tokens and features will end up being remains to be seen.
FAQ – Frequently Asked Questions
So far, there are only two tokens in Formula 1. On the one hand, there is the AM token from Aston Martin, and on the other, the SAUBER token from Alfa Romeo. More tokens from different teams will certainly follow in the future. A similar development is already emerging in soccer.
The largest platform for sports tokens so far is Socios.com. Trading with the cryptocurrencies primarily takes place via the app. Here, users buy the Chiliz (CHZ) token and then exchange it for the desired cryptocurrency. The app also provides access to the special privileges associated with the tokens.
What the tokens offer you varies depending on the token and the team. Among other things, owners of the tokens can participate in voting, competitions and games of the Formula 1 teams. As a fan, you get access to exclusive chat rooms and sales promotions. Special VIP rewards can also be included.