Some of the things we've been discussing for years are beginning to take place in real time. Of course, many are not happening in spaces we expected or want, but they are happening nonetheless.
The next major step the world of business has to take is integrating with blockchain solutions. Small businesses, expectedly, will have to embrace available tools and services in the ecosystem to scale to the global audience, whilst the big players will seek control of key infrastructures, essentially leading to building some in-house or personal bridge tech that affords them some level of control.
We see this in the growing number of companies exploring the idea of launching their own dedicated L2 blockchains and now FIFA is doing the same, only it's opting for a masterchain.
This is a big development, considering the masses that will be onboarded and effectively exposed to blockchain tech on a more extensive level.
Football is a sport with an estimated 5 billion supporters, that's at least 63% of the world's population, based on 2023 census data. It's a sport that brings people together, even people that generally don't obsess over it tend to enjoy it whenever they get a viewing chance.
The name “FIFA” is something most football fans know very well regardless of what league soccer they watch, in fact, it's the only sports governing organization that's known even amongst non-football fans.
But what even is FIFA?
FIFA stands for Fédération Internationale de Football Association. It's the international governing body of association football (soccer), futsal, and beach soccer. Founded in 1904 and based in Zurich, Switzerland, FIFA is best known for organizing:
The FIFA World Cup (held every 4 years, the biggest global football tournament)
The FIFA Women's World Cup
Youth tournaments, club competitions (like the FIFA Club World Cup), and other international matches.
FIFA sets the rules of the game (through the IFAB, which it helps manage), regulates international transfers, and promotes football development worldwide. — GPT
FIFA is also known amongst gamers due to numerous soccer related games. This is frankly an industry that's expected to be impacted by this recent development — more on that later.
Now, what's to know about the recent development?
FIFA, the world’s most recognized sports organization, is officially entering a new era of digital infrastructure with the development of its own blockchain network on Avalanche. This initiative marks a pivotal step in the global federation’s evolving Web3 strategy. The FIFA Blockchain is a custom Layer 1 (L1) network, designed to deliver digital collectibles,and next-generation fan engagement at a global scale.
This announcement represents a significant shift in FIFA’s approach to blockchain with a move to a proprietary L1 The goal is to streamline operations, optimize user experience, and deliver consistent, interoperable digital products to its fan base of over five billion people. — Avalanche announced
In a separate independent report by Cointelegraph, it's noted that FIFA is migrating its NFT marketplace to this new L1 blockchain powered by Avalanche.
The Federation Internationale de Football Association (FIFA) has selected Avalanche to power its dedicated blockchain network for non-fungible tokens and digital fan engagement, the organization announced on May 22.
As part of the rollout, FIFA will migrate its NFT marketplace and NFT collection, FIFA Collect, to the new Avalanche-powered FIFA Blockchain.
FIFA added that “future plans and business cases are planned but not yet publicly disclosed.”
What most blockchain tech enthusiasts should care about is the various business use cases this can lead to and how it could become a blueprint for the rest of the sports world.
FIFA is a very profitable organization, with significant commercial claims on revenue generated from sports events like the world cup.
Certainly, these revenues are directed to fund various things to further improve these competitions but this does not invalidate the fact that a significant amount flows to FIFA.
The last world cup reportedly generated $7.5 billion for FIFA alone and the general value generated during the event is anywhere between $15-20 billion, based on popular estimates.
With a dedicated L1 blockchain, FIFA can build products that allow these values to flow through a globally accessible network, potentially generating more revenue through fees and generally due to less friction in accessibility.
That said, an L1 blockchain allows FIFA to modernize its business, bringing the governance of the world of soccer on-chain. Think about global transfer systems for players happening directly on-chain.
This is something major leagues can choose to integrate with, if the solutions are built, or simply mirror for nation-based competitions.
So not only would an L1 blockchain promote flexible consumer spending and access to FIFA products, it can also be a great way to digitize the sports business.
Real time biddings for players can all happen on-chain.
Real time dispute resolutions. Governance can really take on a new shape and all of this process would be generating value for FIFA in money and reputation.
The gaming world can also integrate with the FIFA L1, using available data to improve soccer games and also improve in-game collectibles by using NFTs on-chain.
The world of sports could get a lot more connected by building on-chain. There are zero downlines unless there are funny businesses companies may not want the world to see.
Otherwise, this is an opportunity to effectively expand.