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Why Are So Many Fans Backing Fan Tokens?

Why Are So Many Fans Backing Fan Tokens?

Soccer fans worldwide are buying into the latest form of cryptocurrency by purchasing fan tokens for their team.

Fan tokens sprang to prominence over the summer, when it was revealed soccer legend Lionel Messi had, in part, been paid in tokens by his new club, Paris St Germain. The Argentine star, who won the Ballon d’Or for a seventh time this week, received around $30m in tokens as part of his agreement. That put fan tokens in the news, and it looks like they’re here to stay.

Over the last few months, several major sporting brands in the US have partnered with Socios, the major fan token provider. Sportico reported that the New England Patriots were the first NFL team to do so, with many NBA franchises already on board. In NHL, New Jersey Devils were first onboard at the end of April, whilst Major League Soccer is next, as the floodgates begin to open on fan tokens in the US.

What are fan tokens, and why are they so popular?

What Are Fan Tokens?

Fan tokens are a non-fungible token, or NFT, described as a form of cryptocurrency. Purchased by supporters of clubs, they give you a say in some club decisions and access to certain content not available elsewhere. In some places, they’ve been described as owning a share of the influence rather than a share of the company. They’re not worthless, though; fan tokens have a resale value, and once you’ve bought on, you’re free to sell them if you so desire.

Are They Popular?

They certainly appear to be doing well. FC Barcelona launched its fan tokens in June 2020 and had generated $1.3m within less than two hours. It’s believed that Socios have generated $200m or more in sales across their roster, with clubs benefiting to the tune of $100m. That isn’t the only benefit; fan tokens create a market within themselves, which clubs can monetize and turn to for influence and opinion. There is some opposition, with critics stating you shouldn’t be looking to monetize support of your club, but that misses the point of fan tokens entirely. This isn’t a subscription service; it is an asset you can buy and sell, much like a shirt or scarf, but one that gives you access instead of a physical product.

Where Do They Go From Here?

Whilst fan tokens have been around for a couple of years; it is only in 2021 that they’ve sprung to prominence. Messi’s move put them into the global spotlight, and that has doubtless helped the humble fan token move into the US market so fluidly. The scope is expanding too; recently, an Oregon Ducks college footballer released his own personal fan token, with tangible benefits such as access to a private Discord server and merchandise deals.

In terms of Socios offering, they’ll slowly develop the product into a more attractive one for consumers, as with any emerging industry. One thing is certain; fan tokens are an investment worth keeping an eye on, even for those who do not follow the teams they represent.

This article is prepared in collaboration with Richard C. Summers. For more finance news, including budgeting and how to save money, be sure to visit our Day To Day Finance homepage.

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