Although I have encountered Fan Tokens in the past (like LAZIO, PORTO) mostly via Binance, I never really delved deeper into them or learned what they really are, their utilities, or how they came about.
According to Wiki, Fan tokens were first introduced in 2019 when football clubs Juventus and Paris Saint-Germain launched their own official tokens. They were followed by various clubs like Barcelona, Manchester City, Arsenal, and FC Porto among others.¹
Let's dive a little deeper and learn more about them.
What are Fan Tokens
These are fungible digital assets that give their holders various membership perks. These tokens are specific to a team or a club and can be bought via Fan Token Offering (FTO) or on the open market when they are made available.
They are "like points on a mobile app that a team could award or top up to their fans. They are not a currency that users can use to purchase goods, but can exchange Fan Tokens with other Fan Token holders on selected crypto exchanges"².
They are digital assets that the holder, a fan of a specific sports team, club, or player, owns and derives value from.³
Per CMC, the Chiliz token (CHZ) is the very first and most prominent fan token.⁴ Other popular Fan Tokens include FC Barcelona Fan Token (BAR), Manchester City Fan Token, Paris Saint-Germain Fan Token, Juventus Fan Token. They range from sports teams (soccer to NFL to cricket) and also music bands.
Currently, the top 5 based on market capitalization are as follows:
Simply put, Fan Tokens are digital assets that give the holders special or exclusive benefits. The tokens are fungible, hence, they can be exchanged for sports club merchandise, VIP experiences, and more. Their worth or prices are "derived from how much fans value being able to participate in the club and earn unique benefits."⁵
Utilities
Membership/Rewards Benefits: Fan Tokens serve as an automatic key for holders to unlock or gain access to fan-related memberships such as VIP status at games and events; access to exclusive content not available to the general public such as behind-the-scenes footage, interviews with players and coaches.
Access to Merchandise & Collectibles: Holders are given access to the club's merchandise and collectibles.
Voting Rights: Depending on the club, holders are given the right to vote on club decisions, merchandise designs (such as the exterior design of the team bus, pattern choice for new team kit designs, MVP categories, match locations, etc)⁵.
Apparently, they are comparable to corporate shares where holders "may not be granted a decisive say (like governance tokens do in tech-related features), at least they allow fans to vote on club matters is a welcome step and makes them feel like a part of the club."⁶
Loyalty Rewards: Fan Token holders can "accumulate loyalty tokens by using or engaging with the app and participating in team polls, games, quizzes, and more. The loyalty tokens can then be used to redeem team merch, memorabilia, match-day & VIP experiences, meet & greet events, and more from the Fan Rewards feature."⁷
Fan Token Markets
Fan Tokens are available on Pancakeswap and in various centralized exchanges (CEX) as follows:
- Chiliz: The trading platform for all the sports & entertainment tokens
- Socios
- Binance
- KuCoin
- Bithumb: one of South Korea's largest crypto exchanges
Summary
Fan Tokens are digital assets (not necessarily a cryptocurrency) that are specific to a certain club or sports team. These tokens grant holders (usually fans) to enjoy certain perks or benefits, including discounts on ticket events or merch, exclusive rewards, and promotions that are not available to the general public.
Fan Tokens play an important role in a team's or project's revenue stream as they can be sold to fans through an initial coin offering (ICO) or FTO and then traded like other cryptocurrencies. They also enable fans some investment or monetization opportunities.
While these tokens cannot be used to purchase goods, they can be traded in several exchanges like Chiliz, Pancakeswap, Binance, and others.
For infotainment only. Sources: Cointelegraph / CMC / Binance / Socios
Lead image created on Canva. Logo/s from Socios. Screenshots linked directly to their sources. No copyright infringement intended. 18092023/10:48ph