What are fan tokens and how do they work?

Jay Crypto

Blogger

Before the launch of fan tokens, the interaction between sports teams or clubs and their fans was limited to traditional methods such as attending matches, purchasing merchandise, or following updates through media channels. While fans had a strong emotional connection to their teams, their ability to actively participate in decision-making or access exclusive experiences was limited. However, the launch of fan tokens made it possible for the fan to directly participate in the decision-making process of the club’s future ventures, access exclusive merchandise and events, and even have a chance of meeting their favorite players.

What are Fan Tokens exactly?

Fan tokens are a special kind of cryptocurrency, issued by sports teams or clubs, that allow users to have access to exclusive offers and to participate in decision-making processes related to different activities such as shirt designs, operational changes, etc. Unlike traditional cryptocurrencies where value is decided by market speculation and factors such as trading volume and liquidity, the value of these tokens depends on various factors such as fan engagement, the team’s success, and exciting player performances.

How fan tokens are different from NFTS?

One feature that differentiates fan tokens from non-fungible tokens (NFTs) is their fungibility. Fan tokens possess full fungibility, making them easily exchangeable for sports club merchandise, VIP experiences, and other offerings. Fungibility means that two items are interchangeable – the value of one item is equal to the value of the other item. For example, if you have a 100-dollar bill and exchange it for another 100-dollar bill, the overall value of your money remains unchanged. NFTs, on the other hand, are non-fungible -- they cannot be mutually interchanged. Each NFT has a unique digital signature which makes it impossible to exchange it for any other NFT.

How do fan tokens work?

First of all, the team or club has to collaborate with a blockchain-based platform to mint a lot of fan tokens. Then it has to schedule a Fan Token Offering (FTO), where fans can buy tokens at a flat price. The FTO may be presented in several ways, including a public sale, a private sale, or an initial exchange offering (IEO). The value of these tokens may depend on a lot of factors such as team performance, player engagement, demand, and popularity of the team.

Types of fan tokens

Fan tokens can be found in various industries such as film and television, gaming, and sports. Here are some common types of fan tokens.

Football (Soccer)

Fan tokens have significant popularity in the sports industry, particularly football. More than 19 clubs including PSG, AC Millan, Manchester City, and FC Barcelona have already embraced the idea of fan tokens to strengthen their global fan following and devise a new method of generating income. According to Coingecko, Manchester City dominates the fan token market in Terms of market cap and performance, followed by FC Barcelona and OG.

Fighting

The fighting industry has also jumped into the blockchain arena; famous fighting organizations such as UFC and PFL have already issued their fan tokens.

These tokens grant users access to exclusive behind-the-scenes content, enable VIP experiences, and provide opportunities to meet their favorite fighters.

Gaming

Fortnite, a popular online video game, collaborated with Chiliz and launched its fan token called Fortnite Fan Token (FFT).

How to buy fan tokens?

Various football clubs have collaborated with Socio, a blockchain-based platform that facilitates the issuance and management of fan tokens. Because of their limited supply and scarcity, these tokens can be bought only from the exchange the club has partnered with. Here's how you can buy fan tokens from Socios. I. Open the Socios mobile app or visit the Socios website (socios.com) and sign up for an account. Provide the required information, including your email address and password, to create a new account. II. In order to buy fan tokens, you must have a balance of Chiliz ($CHZ). CHZ is the currency that allows users to buy tokens on the Socios platform. You can buy this token on some well-known exchanges such as Binance or Gate.io. III. Once you have $CHZ in your crypto wallet, the next step is to choose the fan token you want to buy. You can search for the token you want or browse various tokens Socio is offering. Each token will have its own details such as its price, the club or team it represents, and its utilities. IV. To purchase your selected fan token, click on the purchase button and confirm the purchase. V. Once you have successfully purchased your desired fan token, it will automatically be transferred to your Socio wallet. You can later transfer it to an external wallet for additional security.

How fan tokens are different from other cryptocurrencies?

Just like other traditional cryptocurrencies, fan tokens can be purchased, sold, and traded on different crypto exchanges. What differentiates fan tokens from other cryptocurrencies is their value. At the start, fan tokens have a fixed selling price; the value changes with different factors such as the performance of the team, player engagement, and the demand of the token. However, the value of traditional cryptocurrencies relies on other factors such as supply and demand, market conditions, and trading volume.

Top fan tokens you should know about

While fans are eager to purchase fan tokens of their favorite teams, it's essential to stay informed about the current trending fan tokens in the market. Here are some top fan tokens you should know about.

I. Manchester City Fan Token (CITY)

This token belongs to the famous football club and four times Premier League champion Manchester City. The price of CITY rose by 25% in a single day when it was rumored that Christiano Ronaldo was joining this club and plunged later when it was clarified that he was not joining the club.

CITY is currently trading at $5.54.

II. FC Barcelona Fan Token (BAR)

Based in Barcelona, Spain, FC Barcelona is one of the top and most followed teams in world football. Collaborating with the Ethereum blockchain, they released their own fan token called BAR. BAR holders can enjoy exclusive offers, vote on future decisions, and help select the jersey design.

The price of the Barcelona Fan token (BAR) is $3.20 with a trading volume of 1586941.

III. OG Fan Token

OG is a Europe-based professional esports organization and it was the first football club to launch its fan tokens in 2015.

OG is currently trading at $6.51.

Conclusion

Fan tokens are a new and innovative system to generate revenues and strengthen the fan-franchise bond. By embracing blockchain technology and leveraging the power of cryptocurrency, fan tokens empower fans and revolutionize fan engagement.