Blockchain technology, and the ensued cryptocurrency market, has proven to be extremely adaptable. A decade after its inception, it’s harder to find markets where blockchain use hasn’t been proposed than markets where it has, with anything related to the internet having a clear advantage.
With the appearance of creator-focused blockchains, aimed towards allowing those who create content for the internet, as opposed to the site that hosts it, to profit from both views and advertising, it was only a matter of time before fanclub-like blockchains appeared. And appear they did!
An e-sports rooted craze
Knowing that blockchain technologies have had a much easier time penetrating groups where technology use and innovation was big, it’s no surprise that one of the first implementations of a fan club token system was e-sports.
It took a while, to be fair, as the first team to announce such a program did so only last year, but by now several have joined the fray and it’s looking like e-sports fan club tokens will be the next big thing in the market, and perhaps the largest change to its functioning since the implementation of Twitch back in 2011.
The e-sports team to first take the steps into the blockchain business was OG, best known for having won the Dota 2 The International championships in 2018 and 2019. The announcement was a relatively quiet one, but coming from such influential figures in the community it still made waves: OG was partnering with crypto startup Chiliz, owners of the Socios.com platform to offer fan club tokens.
This year, the concept of fan club tokens went even further, reaching real-life sports teams. As of today, several dozen football and sports clubs have tokens of their own, and no, they’re not just for niche clubs – Spanish giant Barcelona FC sold 600,000 fan club tokens back in June, generating 1.2M Euro in revenue in under two hours.
What do these tokens do? Are they cryptocurrencies?
A crypto token refers, generally speaking, to any asset exchanged in a blockchain. Cryptocurrencies, like Bitcoin or Ethereum, are tokens, but there are many other types of tokens: Tokens representing services, subscriptions, and even real estate properties exist.
Crypto token properties vary, and with it so do its possible uses. The tokens we know as cryptocurrencies are generally fungible (that is, they are all identical, have the same value, and in many cases you can’t even track what any given token has been used for,) and in most cases they’re also divisible, giving users the chance to own amounts lower than 1 token, usually down to the thousandths, hundred-thousandths, or millionth parts of a token.
Not all tokens share these properties, however, and while fan club tokens could be considered fungible and, depending on the implementation, perhaps also untrackable, they’re certainly not divisible – or at least most of them they won’t be. This is partly thanks to the expected uses of these tokens, which would make it impossible to use in amounts lower than a whole unit.
Fan Club Tokens: Interesting uses that matter to fans
The part that looks most difficult to fathom at first is what these tokens could be used for, or what they might even mean. It’s easy to understand what cryptocurrencies mean, as they’re currencies and also represent ownership over a percentage of a blockchain.
Other tokens can be understood easily too, as a token that represents a service (that is, that can be traded for it) has an intrinsic value, and tokens that represent properties or real estate can be equaled to property deeds.
When it comes to fan club tokens, however, people are often left scratching their heads in wonder, thinking about what they could mean. Do these tokens represent ownership of the team or something?
The answer is no, they don’t represent ownership of the team. Even if you owned all 600,000 Barcelona FC tokens you wouldn’t have a say on team makeup, nor would you receive any part of the earnings the team reported.
What they do represent is the right to a vote – or as many votes as tokens you own – on less important, somewhat superfluous issues the team might want to defer to their fans for. For example, if the sports team were trying to settle on a new uniform, they could make their options public and ask their fans – the ones who hold tokens – to vote on whichever they prefer.
There are other possible uses, of course. Preferential seats could be offered first to token holders, or the right to buy such a ticket could be exchanged for a token. For musicians, particularly pop or rock stars, token holders could be offered special VIP packages, in much the same way current fan club members often get special rates on ticket sales.
Another, perhaps less common, but expected use would be market-based: These tokens, while initially sold at a set price, can well be resold at whatever price the market dictates. People who purchase tokens for a somewhat middling teams might find said tokens greatly appreciate in value after a good season, thus giving them an investment element.
Which of these tokens are out now?
Since the market is still very new, there aren’t all that many teams offering tokens yet live on the market. As of August, the Chiliz network had barely 10 fan club tokens out, and by this writing that list has grown to 20 – small steps, but important ones nonetheless for a growing market.
Among the offered tokens, the most important ones are for OG e-sports team, Atletico de Madrid, Barcelona FC, Juventus, Paris Saint-Germain, and fighting leagues UFC and PFL. The number is expected to increase during 2021, as more people grow aware of blockchain technologies, cryptocurrencies, and how they’re entering real-life.
While definitely a marginal use, fan club tokens might be one of the first blockchain uses to make it to the mainstream, since soccer fans are loud and dedicated – thus not willing to let go of the opportunity to vote on small team decisions.
Moreover, Binance’s recent listing of several fan club tokens can be considered an endorsement of the concept – and in the crypto world, you can’t do much better than having Binance’s support.