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Table of Contents
Key Takeaways:
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Fan tokens are fungible digital assets that are typically used by sports teams, music bands, celebrities, etc to engage with their community
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The token can give holders access to exclusive experiences, such as VIP seating at games or behind-the-scenes tours of the team’s facilities.
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Socios, a blockchain-based sports app, is one of the biggest fan tokens platforms, allowing teams and organizations to create and sell fan tokens.
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Fan tokens have gained traction recently due to the FIFA World Cup event as fans buy fan tokens of their favorite teams to show their support.
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Regular sports fans who bought fan tokens may learn more about web3, thus fan tokens can act as a gateway to increased real-world adoption of web3.
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Fan tokens are highly speculative in price and in utility and their value may increase and fall drastically before and after events.
What are Fan Tokens?
Fan tokens are a type of digital asset that is issued and managed on blockchain platforms. They are used to represent and engage with communities that typically involve sports teams, music bands, etc. The current total market cap for fan tokens has grown to over $220 million across 100 tokens.
Fan tokens can provide holders with access to exclusive content such as voting rights, and allow participation in other forms of engagement with the team or community. Some fan tokens have recently been gaining popularity as an increasing number of fan bases show their support by purchasing them in hopes of participating more directly in their favorite communities.
How do Fan Tokens Work?
Fan tokens are similar to other fungible cryptocurrencies and can be bought or sold on the market. Some fan tokens offer holders the ability to vote on certain decisions, such as the team’s starting lineup or the design of a new jersey. The token could also give holders access to exclusive experiences, such as VIP seating at games or behind-the-scenes tours of the team’s facilities.
They are most known for being used across sports communities. This can range from soccer leagues and NFL teams. Most of these tokens are issued by sports teams as part of a way for teams to get closer to their communities. Other communities that have active fan tokens include e-sports gaming and movies.
Like all cryptocurrencies, fan tokens can be volatile but provide some form of utility to keep fans engaged while acting as a valuable way to monetize their fan bases and generate income for organizations.
What is Socios?
Socios is a platform that allows teams and organizations to create and sell fan tokens. As mentioned, these are digital assets that give fans the ability to participate in certain decision-making processes and access exclusive experiences and rewards. The majority of fan tokens are powered by Socios on the Chiliz blockchain and the Binance Fan Token Platform.
Socios has a mobile app available on iOS and Android, where fans can buy, trade, and manage their fan tokens. To date, the app has over 1 million downloads, engaging fans by allowing them to participate in polls and voting events, access gamification features, and engage with their favorite teams in new ways. The platform aims to improve the relationship between sports teams and their fans and provide new revenue streams for teams.
For example, a soccer team could create a fan token and sell it to its fans on the Socios platform. The team could then use the proceeds from the sale of the fan tokens to fund new initiatives or invest in the team’s future.
Chiliz Blockchain
Chiliz runs on its own Chiliz blockchain with its own permissioned sidechain for Socios.com based on the Ethereum blockchain. It hosts every team, league, game title or other organization that connects with the platform, together with each organization’s crowd voting mechanisms run as a semi-autonomous organization on this blockchain.
Running their own permissioned sidechain will drastically reduce transaction costs by allowing the use of a Proof of Authority (PoA) consensus algorithm to confirm each new block of the permissioned chain – with each block storing polling/ decision results – instead of necessitating the use of Proof of Work (PoW) consensus. Other than being a scalability solution, this system also ensures transparency as Socios.com’s PoA sidechain will be publicly auditable.
As there are currently no direct competitors to Chiliz when it comes to the tokenization of sports-related management of voting rights, Chiliz further dominated the sports industry that uses blockchain technology for fan engagement. Chilliz is able to capture an audience that is outside of crypto, and word of mouth has a tendency to spread fast in the sports world.
Fan Tokens and the 2022 World Cup
With the FIFA World Cup underway, many fan tokens have seen a spike in volume as fans worldwide start to buy into their favorite team’s fan tokens to show their support. Some teams have a bigger fan base which could result in a higher market cap for the fan token.
Most fan tokens surrounding the FIFA teams have dropped off slightly since their previous run-up in November before the tournament started. The largest fan tokens that have benefited from the hype around this year’s FIFA World Cup are the SS Lazio Fan Token (LAZIO), Santos FC Fan Token (SANTOS), PSG Fan Token (PSG), Barcelona Fan Token (BAR), and Universidad de Chile Fan Token (UCH).
Other large market teams participating in the FIFA world cup include the Portugal National Team Fan Token (POR), Spain National Football Team Fan Token (SNFT), and Argentine Football Association Fan Token (ARG).
Argentine Football Association Fan Token
The Argentine Football Association Fan Token is the official token of Argentina’s national football team. The token peaked right before the start of the World Cup at $9.19 on 18 November, before dipping until the quarter-finals.
During the World Cup, holders of the token can earn points through voting, predictions, and other interactions with the Socios.com app, with prizes to be won.
As Argentina has reached the finals of the 2022 World Cup, the token is once again on the rise, with a 76% increase in value over the past week at time of writing.
Lazio Fan Token
The SS Lazio Fan Token (LAZIO) is a digital token of the SS Lazio football club from Rome. Since its launch in October 2021, it has managed to secure the largest market cap among fan tokens at $28 million. LAZIO traded at a peak of $26.75, surpassing other popular organizations like Santos FC and is currently trading around $4.40.
It was designed to improve the fan experience for supporters of the soccer team. LAZIO works as a governance token with additional utility that allows fans to participate in team voting polls, hunt for digital collectibles, purchase NFTs, and access gamification features tied to fan rewards and other experiences.
The fan token can be used for multiple purposes such as engagement through voting sessions, meet-and-greet sessions with players, signed merchandise and also a loyalty subscription to earn fan rewards and more.
The LAZIO fan token serves as a way for fans to be a part of S.S. Lazio and take the global fan base to another level. LAZIO holders can also enjoy future benefits such as making purchases on the SS Lazio e-commerce ecosystem and paying for sports tickets or team merchandise.
Santos FC Fan Token
The Santos FC Fan Token (SANTOS) is a digital token of the Santos football club from Brazil. Santos FC is a Brazilian football club with a strong, loyal following. Their history spans more than 110 years and its success is one of the primary reasons why Brazil has dominated the football scene for decades. SANTOS is the second largest fan token by market cap at $23 million behind LAZIO and is currently trading at $5.68 after peaking at $22.34 in September 2021.
SANTOS token holders are affiliated with the club’s e-commerce ecosystem and are given access to tickets and merchandise. Fans also have the chance to vote for the team’s warm-up song, and for the verbiage on the team captain’s armband. Most notably, holders can also purchase digital collectibles and NFTs. The club plans to release all of its football fan tokens to the public by 2031.
PSG Fan Token
The PSG Fan Token (PSG) is a digital token of the Paris Saint-Germain football club from France. Paris Saint-Germain (also known as PSG) has won numerous titles, including several French Cups as well as the UEFA Cup. PSG launched its own token in January 2021 which reached an all-time high of $58.79 after just 8 months in August 2021. As of December 2022, the PSG token is trading at around $5.23.
PSG token holders are entitled to a range of benefits, including the ability to vote on messages for match day and the captain’s armband, as well as the opportunity to select award recipients for various categories, such as top goals and top defensive plays. In addition, token holders are given the chance to win signed merchandise, VIP services at the stadium, and interactive player experiences.
Barcelona Fan Token
The Barcelona Fan Token (BAR) is a digital token of the Barcelona FC football club from Spain. Barcelona FC has a distinguished history which includes multiple domestic cup titles and international championships such as the UEFA Champions League, UEFA Cup, and others. The BAR token was first released in June 2020, reaching a peak of $72.55 in March 2021 and is currently trading at $3.42.
BAR holders are provided with various benefits, including the ability to vote on club decisions and influence the match day playlist and messages displayed on the captain’s armband. In addition, token holders may be eligible for VIP benefits on match days, such as the opportunity to meet the team and win match tickets. They may also have access to exclusive merchandise that is not available to the general public.
Universidad de Chile Fan Token
The Universidad de Chile Fan Token (UCH) is a digital token of the Universidad de Chile football club from Chile. Universidad de Chile is a highly successful football club that has a strong presence in South America.
Over the years, the team has won 18 league titles, six of which were achieved in the last decade. These accomplishments have solidified Universidad de Chile’s position as one of the top football clubs in the region. UCH was released in November 2020, after which it soared to a high of $43.87 and is currently trading around $0.45.
UCH fan tokens provide their owners with a range of benefits, including the ability to participate in polls and vote on decisions related to Universidad de Chile. UCH token holders can also engage with other fans through the Socios Chat platform, earn VIP rewards, compete on leaderboards to be recognized as the top fan in their region or country, and enjoy exclusive promotions from the club and its sponsors.
How to Buy Fan Tokens
If you want to have a vote on decisions like choosing between a new design for your organization room or even attending community-held events, you need to buy a fan token. The process of buying a fan token is similar to buying any other cryptocurrency.
One of the most common ways for you to buy fan tokens would be through the Socios app. Before, buying your preferred fan token, you have to get some Chilliz (CHZ) which is the native token of Socios. You can buy CHZ with your credit or debit card directly on the app. You can also purchase CHZ on centralized exchanges like:
Fan Tokens on Socios are usually sold in limited quantities through a Fan Token Offering (FTO), which is very similar to the well-known Initial Coin Offering (ICO). Once the FTO has ended, the price is then determined by supply and demand on the market. If your bought your fan tokens from Socios, you can even put your tokens to work to earn rewards via the Socios website or app, or enter in polls to vote on the platform.
There are other markets where fan tokens can be bought and sold. You can also purchase them on a crypto exchange like Binance where you can buy different fan tokens with multiple currencies such as USDT and BUSD stablecoins, or even Bitcoin for some fan token pairs.
Conclusion
Fan tokens are a rather new concept to the world and serve as a small sector within the cryptocurrency market. These tokens have the potential to provide a new way for fans to engage with their favorite teams and vice versa. By owning a piece of their favorite team and participating in the decision-making process, fans can feel more connected to groups that they love.
While these tokens usually come with certain benefits, fan tokens come with their own set of challenges. Do note that fan tokens are highly speculative and their value can fluctuate greatly, which carries a certain risk when investing in them. As the use of fan tokens continues to evolve, it will be interesting to see how this new concept will change the way fans engage with their favorite teams in the future.