Blockchain and sports

As a result of this information, our team wanted to tell how the world of sports and blockchain technologies are connected. In this article we provide examples of the most popular NFT collections from sports, popular FAN tokens and major sponsorship deals. We will try to explain why sports is so closely connected with the blockchain and what pitfalls there might be in this interaction.

But there are also utility tokens. A utilitarian token means that the owner receives some (not always material) benefit. For example, access to something that is not available to everyone else. An example would be a fan club token.

Here are examples of Fan tokens:

This club was one of the first to start using tokens back in 2019. Paris Saint-Germain mines the PSG token on the Ethereum blockchain. PSG tokens allow their holders to participate in the process of choosing the message that will be written on the captain's armband. They also get access to some of the club's VIP features and can use tokens to purchase official football club merchandise.

Coinmarketcap link

The SANTOS token is based on the Binance Smart Chain under the BEP-20 standard. SANTOS holders can participate in all Santos team events and voting. Fans can vote on Binance's fan token platform for things like the team's warm-up song for a football game.

Coinmarketcap link

BAR runs on Ethereum and can be accessed on the Socios fan token platform. BAR holders can enjoy numerous types of rewards, such as voting on various decisions affecting the club, including the inscription on the captain's armband.

Coinmarketcap link

And dozens of such examples can be given. Each owner receives priority over users who do not own tokens (for some fans, this may be important).

Typically, NFT tokens for athletes are cards with the main moments in their career (video, photo, GIF, cartoon or drawing), which are produced in limited quantities. Cards that are not quickly sold on the primary market are burned or left in free circulation.

Here are examples of popular NFT fan collections:

Considered the gold standard of sports NFTs, the collection is a wildly successful project created by Dapper Labs in partnership with the National Basketball League (NBA). NBA Top Shot also serves as a sports NFT marketplace that combines a collection process similar to traditional sports trading cards with the blockchain technology used in other NFT platforms.

Despite the fact that today the chart seems to be at zero, sales of the collection continue to impress. Sales peaked on February 22, 2021, at over $47 million in one day.

Similar to NBA Top-Shot but based on American football, NFL All Day tries to create the same buzz with each new collection.

While the prices aren't as high as NBA Top Shot and the players aren't as well-known internationally, it connects the sports community to Web 3. The NFL's greatest moments have been officially licensed, and fans can save and trade them as they see fit.

The biggest boom in sponsorship of sports by cryptocurrency companies occurred in the period of 2021-2022. One of the most striking example was the sponsorship of 8 crypto companies of 8 different Formula 1 teams at once.

Of the three aspects of interaction between the world of cryptocurrencies and sports, sponsorship occupies a leading position. Today, cryptocurrency exchanges from all over the world support the sport. In March 2022, one of the largest exchanges, OKX, became an official partner of the Manchester City football club.

By the way, Socios.com (a blockchain-based fan engagement platform) is also an official partner of the Manchester City football club

Cryptocurrency exchange Crypto.com has entered into a sponsorship deal with the UFC. According to the publication's sources, the site will pay the UFC $175 million over 10 years. As part of the agreement, the Crypto.com logo will be placed on items of combat equipment, including the clothing athletes wear in tournaments, as well as staff clothing

And the AC Milan football club is sponsored by the BitMEX cryptocurrency exchange.

E-sports has not been left out either. For example, one of the main championships in Counter Strike: Go (currently Counter Strike 2) is sponsored by Coinbase, and Coinbase is the second exchange in the world in terms of trading volume after Binance.

Despite the decline in capitalization and activity of the NFT market, fan tokens are becoming more popular and useful, it is clear that we will continue to see crypto companies sponsoring sports teams.

These partnerships could lead to a future in which fans have more influence over their teams' minor decisions. It could also free up significantly more funds for sports teams and athletes. Unfortunately, such partnerships, collections and tokens also have a downside.

In December 2021, the MUFC token was released. This was a token fan of the English football club Manchester United. Thanks to aggressive online marketing, which included an airdrop, the token's fan base grew in a short time. The token was released on the Binance Smart Chain network.

All users who used the token became victims of major fraud. In order to avoid this situation, we recommend that you check the token’s smart contract through our Btrace tool.

Sometimes, problems also result in cryptocurrency instability. In 2022, one of the largest crypto exchanges, FTX, collapsed. Due to the collapse of the stock exchange, many investors suspended transactions in cryptocurrency, which led to fear and mistrust in cryptocurrency. Because of the collapse of such a large exchange, everything went like a huge snowball, for example:

Cryptocurrency exchange WhaleFin wants to terminate the contract with Atlético Madrid due to a sharp drop in revenue.

WhaleFin belongs to the famous Amber Group platform - it provides a full range of services in the field of digital assets, including investing and trading. And Amber Group suffered heavy losses, with approximately 10% of its trading capital held on FTX.

Atlético signed with WhaleFin in the summer of 2022 - a 5-year contract, the club receives 42 million euros per year. Chelsea also collaborated with this company, but the WhaleFin logo was visible only on the sleeve (Atlético is the title sponsor). The contract with the Londoners for 23 million has already been terminated.

And in the case of our example about Formula 1, everything also did not work out in the best way with all the teams. For example, the racing division of Scuderia Ferrari terminated its contract with crypto sponsor Velas. The partnership lasted from 2021 and was valued at $30 million per year. The parties planned to involve racing fans through NFTs and other joint projects.

The official reason for the termination of the partnership was “failure to comply with the terms of the contract.” Insiders say Ferrari allegedly violated copyright provisions by allowing Velas to issue NFTs with their images. And the crypto company was found to have financial violations. The parties are facing legal action over the matter, the sources added.

Sports clubs and sports organizations need to be more careful about partnerships. The cryptocurrency world is too unstable; cryptocurrency rates can fall in an instant and then soar. Because of this, contracts with major sports companies may be called into question. Often, such interactions between sports and blockchain result in a huge number of users on both sides. Only, unfortunately, in cases where contracts are not fulfilled, not only the parties, but also ordinary users lose funds.

The problem of fraud with cryptocurrency, in particular with fake FAN tokens, requires special attention and accuracy. Here are some strategies to help you avoid these pitfalls: