What are Fan Tokens? Crypto Assets That Give Fans a Voice – Decipher

The relationship between fans and the object of their affection, whether a sports team or a group, has traditionally been one-sided. Fans buy tickets and merchandise, the team or group pockets the money.

Now a new kind of cryptocurrencythe fan token, promises to change the dynamic of this relationship.

What are Fan Tokens?

Fan Tokens are a type of cryptocurrency designed to provide membership benefits to fandoms of sports teams, bands, and other groups. Fan Token holders are often entitled to membership benefits, such as access to exclusive content, prizes, experiences, and the right to vote on club decisions.

Fan Tokens offer a little something for everyone. For fans, it’s an opportunity to determine, in an (often trivial and non-legally binding) way, the future of their favorite sports team or pop star, and to speculate on their success in web3 markets. For the sports team or the pop star, it’s free money, baby!

These tokens are everywhere, in all sports ranging from football to NFL to cricket. Groups like Portugal. Man also experiences them.

The fan token economy is as bizarre as it is volatile, but for some famous people or organizations, it has proven to be a lucrative revenue stream that keeps fans in the fold.

How do Fan Tokens work?

The basic idea is that an organization like a sports team mints a lot of fungible tokens (as opposed to non-fungible tokens, or NFT), then sells or distributes them to fans or speculators. These tokens often sell in secondary markets, much like cryptocurrencies such as Bitcoin Where Ethereummeaning they are beholden to conventional market forces.

Fan tokens generally provide limited governance rights to holders. The Paris Saint-Germain Fan Token, for example, allows holders to access exclusive VIP experiences and vote for fan edition coverage of the FIFA 22 football match. Fans also selected a message to display in the team locker room for a match in May 2021: “Together we can, Together we will! Let’s take another step towards glory and victory.

What is Socios?

A platform called Socios, created by a company called Chiliz, dominates the fan token market. Indeed, most of them are based on football, a sport in which the platform has agreements with the best teams, including:

• FCBarcelona. Fans opted for a mural in the locker room and a captain’s armband (it read “NO CHILDREN OFFSIDE”). In August 2022, Chiliz bought a $100 million stake in FC Barcelona’s digital studio.
• InterMilan. Fans voted on the first new goal celebration song in 8 years, chose the official team bus and weighed in on the shirt design.
• Manchester City. Fans chose a photo hanging in the players’ area at Wembley Stadium and voted for an editorial about a memorable Man City season.

Completing many of these surveys allows fans to enter sweepstakes to win prizes, such as VIP access to teams, as well as exclusive promotions.

Socios isn’t the only game in town; crypto exchange Binance launched its own fan token platform, known as Binance Fan Tokensin October 2021. It hosts tokens from Alpine F1 Team, SS Lazio, FC Porto and Santos FC.

The market capitalization of fan tokens is modest. As of September 2022, SS Lazio had a market cap of $66 million, Alpine F1 Team had a market cap of $50 million; and PSG, a market cap of $29 million. By comparison, Bitcoin’s market capitalization is over $380 billion and Ethereum’s at $200 billion.

Fan tokens are not limited to the world of sports. Platforms such as Rally and Roll have long been trying to popularize the idea of ​​a social token, where pop star fans and influencers can influence their lives as well. They haven’t taken off in a big way yet; perhaps the biggest is the governance token of Rally, which has a market capitalization of around $140 million.

This may be because the benefits they provide, such as voting on group or sports team decisions, are relatively insignificant. Governance Tokens for Decentralized Finance (Challenge), on the other hand, allow incumbents to play a prominent role in the governance of their respective protocols.

Hold enough of these governance tokens and you could command multi-billion dollar treasury chests and use your control to wield influence far beyond the limited supply of fan tokens. This, in turn, commands value; UNI, the decentralized exchange governance token (DEX) Uniswaphas a market cap of $4.9 billion.

How to buy a Fan Token

Still wanting to give your opinion on the inspirational motto to display in the locker room of your favorite team? To have a chance to do so, you will need to purchase a Fan Token.

The process of buying a fan token is similar to buying any other cryptocurrency. The easiest way to buy them is on a crypto exchange or brokerage, like Binance.

On Binance, for example, you can buy the PSG fan token with three currencies: USDT and BUSD stablecoins, or Bitcoin. You will need to create an account on the exchange and then place a “spot” order for the Fan Token using one of the platform’s supported token pairings. Other exchanges support different pairings.

You can also purchase fan tokens in the Socios app using Chiliz (CHZ), the native token of Socios’ parent company. You can also buy CHZ in the app.

Once you have purchased your fan token, you will receive it in your Web3 wallet, just like any other cryptocurrency.

If your fan token is from Socios, the market leader in sports fan tokens, you can head to the Socios website or app to put your tokens to work. For example, you can use these tokens to earn rewards within the platform or participate in surveys. Or you can sell them on a cryptocurrency exchange, if their value increases.