Fan tokens have started to attract prominent football clubs to invest and become a part of the blockchain/cryptocurrency revolution. Well-renowned clubs like PSG, FC Barcelona, AC Milan, AS Roma etc. have all entered the fray. So, what are fan tokens exactly? Read on...
Lionel Messi's transfer from FC Barcelona to Paris Saint Germain (PSG) was quite historic in two ways. One, nobody expected the football legend to leave his home club. Two, PSG paid a one-time bonus of one million euros to Messi in the form of PSG fan tokens.
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Fan tokens have started to attract prominent clubs to invest and become a part of the blockchain revolution in a way. Apart from PSG, well-renowned clubs such as FC Barcelona, AC Milan, AS Roma, and Galatasaray have invested in the crypto market as well. But what are these fan tokens? Let's dive in.
What are fan tokens?
Fan tokens are a form of cryptocurrency that gives fans the right to vote on the operations of the club. Fans are also provided access to special merchandise, promotions, and games, among a few other benefits. For example, the first poll conducted by PSG allowed fans to vote on the inspirational message that goes on the armbands of the players.
Galatasaray allowed fans to choose the song that plays when the team enters the field, while Juventus let them choose the song that is played when the team scores a goal. The first poll by Barcelona will let fans pick the design of the mural that will be used as decoration in the dressing room of Camp Nou. There are many other such voting rights given by the clubs as well.
These tokens are fungible, which means they can be easily exchanged for merchandise or experiences, unlike non-fungible tokens (NFTs).
The crypto fan tokens can also provide monetary benefits. If the demand for the tokens increases their price increases as well. Fans can sell their tokens at rates that are higher than their buying price to enjoy capital gains. Just the way PSG fans would have earned after Messi got transferred to their club.
Various fan tokens
The fan tokens of PSG have the highest market capitalisation of over $53 million, followed by the Manchester United fan tokens that have a market cap of about $42 million. The fan tokens of Athletico Madrid rank third and have a market capitalisation of about $33 million dollars and are placed just above the fan tokens of FC Barcelona that have a market capitalisation of over $27 million.
Fans can easily purchase the digital tokens of their favourite teams from several exchanges present online. However, this is only true for big clubs. For buying fan tokens of clubs with a smaller issue size, you simply have to use a decentralised exchange (DEX). You would need cryptocurrencies to purchase fan tokens from decentralised exchanges. The price of these tokens is decided by the seller and fluctuates based on demand and supply.
Fan token-based blockchain
The blockchain technology that is used to program the fan tokens can be used in many other ways. The football club Benfica allows fans to purchase its merchandise by making payments in cryptocurrencies. There are also many Series A teams that have entered a contract with various blockchain platforms to manufacture licensed digital cards of the players. As the fan token market matures, the clubs even plan to pay the employee salary in the form of digital tokens.
Fan tokens help fans have an increased engagement with their favourite clubs. However, it is crucial to understand that investing in cryptos is risky, and not all investment opportunities are suited for all investors. Hence, you should do your research and understand your investment objective along with your appetite for risk before purchasing fan tokens.
Also Read \\ From Shiba Inu, Garlicoin to Putincoin, here's a look at the quirkiest cryptos in circulation
(Edited by : Abhishek Jha)
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