As the popularity and usage of cryptocurrencies increases, many new projects continue to emerge. While individuals and companies interested in this field continue to be included in the ecosystem, blockchain technology has started to be used in many different sectors with the increase in the number of users. Sports clubs have also stepped into the crypto asset world and created significant awareness with club crypto assets called "Fan tokens".
Fan tokens are cryptocurrencies that allow their holders to gain access to various fan-related membership benefits, such as voting on club decisions, rewards, product design and unique experiences. These crypto assets, called fan tokens, are backed by blockchain technology. They were created to increase fan engagement with their team's or artist's events and to further connect them to the clubs they are fans or supporters of. It also aims to increase interactions between fans and clubs.
It is used by sports clubs, music fan clubs, and other organizations to organize and ensure equity in fans' experiences, build leadership over clubs, and more. Fan tokens offer fans certain privileges and opportunities. For instance, through these tokens, fans can vote, participate in polls, gain access to VIP events, or get early access to content from teams or artists. In some cases, fans can also use these tokens to buy digital collectibles or limited-edition merchandise.
Generally, fan tokens are created on a dedicated platform and offer features such as social media, polls, and rewards to enable interaction between token holders. These tokens can be traded on various cryptocurrency platforms and exchanged for other cryptocurrencies.
Fan tokens have a lot of benefits:
- It can provide an alternative source of revenue for teams or artists.
- It can provide an interactive experience for fans, making them feel more connected and involved.
- It encourages community building and helps develop a sense of unity and solidarity among fans.
Fan tokens are linked to various events, usually limited to a certain period of time. These can include team matches, concerts, autograph signings, or special events. At each event, token holders can receive certain privileges or access different opportunities. However, it is an important to note that fan tokens have a volatility similar to cryptocurrencies. Token prices can change depending on market conditions and demand, so careful research is recommended before investing.
How Does Fan Token Work?
Fan token holders can buy and then trade or exchange fan tokens in the similar way to other cryptocurrencies. When trading, the price of the fan token is determined according to the supply and demand balance. At the same time, the price of fan tokens may change according to the current popularity of the token and market movements.
Holders of a certain number of fan tokens are entitled to vote on various issues related to the clubs they follow. Depending on the club, the topics that fans can vote on will vary.
The issues that can usually be voted on are:
- Product design of any club
- Tour bus designs
- Priority tickets
- Match locations
- Most valuable player categories
Giving fans the opportunity to have their say on these issues makes them more involved in the club. The fan token can also be described as a special community of fans who are considered the most loyal.
How to Distinguish Fan Tokens?
The most important feature that distinguishes fan token from other cryptocurrencies is that it does not solve any financial or technical problems. In other words, fan tokens are fun and reward-based tokens. Fan tokens are usually accepted and used as part of a fan community or a sports club.
Popular fan tokens listed on platforms are as follows:
- Barcelona fan token ($BAR)
- Milan fan token ($ACM)
- Arsenal fan token ($AFC)
- Roma fan token ($ASR)
- Galatasaray fan token ($GAL)
- Alpine F1 Team Fan Token
How Do Fan Tokens Increase in Value?
The value of fan tokens increases depending on the demand of fans. Important events such as club achievements, transfers, or collaborations have an impact on the value of fan tokens. For instance, the results of a football team on its way to the championship may create an expectation in that token. As a result of this expectation, fan tokens may experience price movements.
In short, the value of fan tokens is negatively affected by fear and uncertainty in other cryptocurrencies. However, it is positively affected when there is positive development in the relevant club.
From Where and How to Buy Fan Token?
Some popular examples of fan tokens include Chiliz (CHZ) and the Socios.com platform. Chiliz is known as a platform that supports fan tokens in the sports world and has partnered with many famous sports teams and leagues. Socios.com is a platform that hosts fan tokens from various sports teams and artists.
To buy fan tokens, you first need to register and create an account on one of the relevant platforms. This usually involves information such as an email address and authentication. Fan tokens can usually be bought with cryptocurrencies. The asset accepted by the relevant platform should be checked and the necessary steps for the buying should be followed.
What Are the Differences Between Fan Token and NFTs?
The most obvious and important difference between fan tokens and NFTs is that fan tokens are tradable.
Apart from these, the differences between fan tokens and NFTs are as follows:
- Fungibility
- Intended use
- Standardization
- Evaluation
Fungibility
Fungibility is a property that refers to the ease with which assets can be exchanged for an identical item at a given rate. For instance, in fiat currency, a one dollar bill is equal to another bill of the same value. Fungible assets can be broken down into smaller units or, in other words, divided. The fungibility of tokens makes them easy to buy and sell as they become part of the secondary market. However, the fan token is exclusive to a particular club and only a limited number are available in each club.
NTFs are tokens that cannot be traded and cannot be duplicated. For instance, virtual event tickets, blockchain identity, or metaverse assets are examples of NFTs. NFTs facilitate the claim of ownership of a digital piece of data that is considered unique. They also reside on a blockchain like other cryptocurrencies.
Intended Use
The fan token is used to enable fans to interact with a team or artist and access certain benefits. Fan token holders can enjoy certain privileges, such as the ability to participate in surveys and access exclusive content. NFTs typically represent digital artworks, collectibles, or unique digital assets. Each NFT provides the holder with ownership and uniqueness of the digital asset.
Standardization
A fan token is usually created on the Ethereum blockchain network using ERC-20 or a similar token standard. Through this standard, fan tokens are compatible and tradable. NFTs, on the other hand, typically use Ethereum's ERC-721 and ERC-1155 standards. Through these standards, NFTs are created with unique IDs and properties.
Evaluation
Fan tokens are often associated with the popularity and success of a team or artist. The value of tokens can change depending on the team's performance, fan interest, and other factors. NFTs, on the other hand, are valued as collectibles and works of art due to their uniqueness.
Fan tokens and NFTs are thus differentiated by having different uses, standards and valuations. Each represents different use cases and benefits on blockchain technology.
