Sports fan token have been trading three years in the main crypto exchanges, with the aim an alternative for clubs to gain financing and for fans to be closer to their favorite teams. It hasn’t worked out as such as one would expect in the world of sports fandom where shifts of euphoria and indifference happen quickly, combine that with crypto and NFT noise.
The days are early for gauging its success as it still in almost virgin times. Football legend Lionel Messi’s transfer from FC Barcelona to Paris Saint-Germain created interest in the French club’s fan token, $PSG and is a good example of the price volatility linked to excitement.
The Fan Token Market
The market cap of the sports fan tokens has been as high as $491 million, and its daily traded volume is $241 million. Still a relatively small market but growing. The biggest 10 fan tokens have an average daily volume of $13 million, which is only 28% of the daily volume traded on average for the 364 coins listed on Binance, according to CoinMarketCap and Coingecko data.
The world’s largest fan token by market capitalization, Manchester City, has a market capitalization of $56 million and the daily traded volume is under $15 million, according to data from CoinMarketCap.com. Its price is half of what it was issued for.– Bloomberg
Alexandre Dreyfus, founder and CEO of Socios.com, a company that partners with clubs to develop the tokens says these coins are not intended to be investment assets, but rather to provide a service, said Alexandre Dreyfus, founder and CEO of Socios.com, a company that partners with clubs to develop the tokens. Think of them more as memberships in this context.
Socios.com has 57 fan token partners, ranging from football (soccer) to Formula 1, up from 20 a year ago, which Dreyfus says indicates a developing market. Leading Argentine club Boca held talks with Socios.com
“We’re seeing an uptick in interest from clubs in issuing fan tokens,” Dreyfus said. “Fans will be able enjoy exclusive games and content and score points that they can redeem for official signed products, free tickets or VIP experiences.”
The PSG Fan Token Euphoria and Indifference with Messi
Lionel Messi has been a PSG player for eight months now giving us a time to reflect on the price action of the $PSG token. The token spiked as rumors of the pending transfer flowed. After the spike prices were down 34% a week later, and 73% from when the tokens were issued after four months.
For background the soccer legend stunned the entire sport when La Liga rules made it impossible for Barca to renew the player’s contract and Messi was forced to move to PSG on a Bosman transfer. He made his PSG debut as a second-half substitute against Reims on August 29, 2021. He then had his first PSG start in the Champions League trip to Brugge on September 15.
His results and fan mood can be seen somewhat in the accompanying $PSG chart. Messi’s final four Ligue 1 matches of 2021 were rather disappointing with no goals and just one assist as PSG managed only one league win in December. Fair to say he had a rather underwhelming first-half to the season at PSG domestically. Five of Messi’s six PSG goals in 2021 came in the Champions League, with just one in Ligue 1, though all four of his assists arrived in domestic competition.
Messi missed the start of 2022 after contracting COVID during the winter break. He made his first appearance of the year on January 23 as a 64th minute sub in the big win over Reims. Messi scored his first goal of 2022 on February 6 during the 5-1 victory at Lille.
The biggest disappointment of the season for PSG on March 9 as they were eliminated from the Champions League.
Lionel Messi: 2021-22 stats
- Appearances: 27
- Starts: 25
- Goals: 8
- Assists: 10
Football Fan Tokens
Football clubs that have issued tokens include Manchester City, SS Lazio, FC Porto, Santos FC, FC Barcelona, AC Milan and Trabzonspor. The world’s largest fan token by market capitalization is Manchester City and has a market capitalization of $56 million
FC Arsenal raised $5.5 million through fan tokens, though most transactions are closer to $2 million.
Football club tokens are an alternative for clubs to gain financing and for fans to be closer to their favorite teams. However, they are yet to live up to these expectations. The main criticism from fans is there are few tangible benefits.
Bloomberg reported the Juventus token allows fans to use the tokens to buy VIP tickets, while the PSG token was used to allow holders to vote on the design for the new team bus and club slogan.
“The problem with current fan tokens is the clubs do not actively promote them or the utility the tokens have”, said Oliver Bell, CEO and co-founder of XCAD Network, a company that makes tokens for content creators. “The people that are buying them are not necessarily fans of the clubs at all; the only buyers are crypto enthusiasts.”
Binance, the world’s largest crypto exchange by traded volume, which has issued four fan tokens. Binance on April 7 began offering Lazio fan token holders the opportunity to stake, a process that allows owners to earn passive income on the coins without having to sell them.
The tokens are used to help validate transactions on the blockchain, with the rewards and fees divided among the participants and the exchange. Binance offered holders 8% of annualized returns when they keep the Lazio tokens locked for 30 days, or 15% if they keep them for 90 days.
Source: Binance, Bloomberg
From The TradersCommunity Research Desk