In case you’ve been hiding under a moon rock on some alt-planet in the metaverse for the past year, play-to-earn games are all the rage now.
This is e-sports where gamers earn NFTs simply by playing their hobby on phone or laptop, whether shooting asteroids or scoring goals. Given crypto’s origins in the gaming community this is an expected development.
But crypto and NFTs are now spreading quickly through real professional sports leagues, and gamifying what is a highly monetized marketplace already.
It’s in the game
Match-fixing is so ingrained in many professional sports already that it has ruined much of the realism and fun.
Italian soccer (not to mention LATAM) is notorious for its theatrics by players faking it on the pitch and bribery off it; the biggest cricket league in the world India’s IPL is riddled with match-fixing; the most popular rugby league Australia’s NRL is in perpetual scandal; the NFL has had its share and, of course, boxing which will probably never recover from decades of deception.
Does anyone watch the Tour de France anymore?
Then there are the strings that pull the major sports leagues and clubs around the world, the money from Russian oil oligarchs and Arabian princes. You could say the outcome is already predetermined when a club backed by billionaires comes up teams which aren’t.
The English Premier League since 2000, when international funding of teams really started flooding into the clubs, has been won by just just 6 teams — Manchester United, Manchester City, Arsenal, Chelsea, Liverpool and Leciester City — all owned by offshore billionaires who own several other sports clubs.
Interestingly, these six were also among the Premier League sides who were founder members of the elite breakaway European Super League which collapsed within 72 hours amid fan outrage and opposition from the Premier League, FIFA, UEFA and even the British Government.
Would NFTs used to augment games add another layer of abstract voyeurism to the fan sitting in a pub or bookmakers watching other people play a game that is potentially manipulated?
What does “deepening fan engagement” actually mean? And who asked for it?
Don’t look back in anger
I spent the rest of the morning scraping burnt porridge off the hob after I learned Tezos revealed it is sponsoring Manchester United for 2022, its ticker symbol emblazoned mid-chest on the jersey.
I couldn’t think of a brand further from the tracky-bottoms-tucked-in-tops footy-loving Mancunian fans and the Gallagher brothers.
The ‘blockchain software company’ Tezos and its eponymous cryptocurrency are barely five years in the world since its infamous ICO in 2017 — the biggest at the time — which landed the project in legal cases, founder control battles and its development team abandoning it, delaying the project potentially for years.
Manchester is a city steeped in industrial history where the football club was established by workers of the Lancashire and Yorkshire Railway companies; Tezos is the brainchild of husband and wife Ivy League-educated hedge fund quants created to ‘decentralise governance’ with computer science and financial engineering.
Tezos had ZERO presence in Manchester or in the Mancunian psyche until the press release.
But but it makes sense for both when you consider it from another angle:
- Soccer fans are avid sports gamblers; crypto is the ultimate gambling tool
- Sports-betting companies are accepting crypto payments and blockchain
- Cryptocurrency needs constant newcomers to support prices
So soccer clubs are bringing these two together: fans with more ways to gamble and crypto companies with more liquidity in their assets.
‘Deepening Fan Engagement’
Sports clubs are using NFTs to increase fan loyalty under the banner of ‘deepening fan engagement’, much like other branches are ‘democratising finance’.
Socios is a crypto platform that creates “Fan Tokens” and NFTs for some of the biggest football clubs in the world (including Barcelona FC, Inter Milan and the Argentinian and Italian national teams) which entitle holders to meet and greets, vote on frivolous team decisions but most importantly they can trade them amongst each other.
It also offers a thing called FTOs (or Fan Token Offerings, a riff on ICOs), “during which a number of Fan Tokens are made available at a fixed price before they reach the marketplace”.
Another platform is creating digital soccer cards on NFTs. On the back of the hype this year it is expanding into other sports and Serena Williams has joined its board of advisors.
Blue skies, red pills
It’s not just venture capital and brand-obsessed athletes that are peddling this hype.
Even the most sober and staid professional association, Engineers Ireland, are impressed, the former president of Engineers Ireland espousing the ‘deeper engagement with fans’ narrative of soccer clubs minting coins and NFTs.
“If the quantity of branded coins minted is capped, then the coins themselves should rise in value (versus the euro or US dollar) over time. As more fans buy in, as more fan engagement events are organised, and as more VIP-only content and merchandise are sold (and paid for in club’s digital currency), the demand for the club’s coins will inevitably rise.”
The scarcity argument he puts forth sounds incredibly naïve coming from a high-profile engineer, but maybe he expects ‘the laws of tokenomics’ to be as universally concrete as those of physics.
Following his ‘scarce asset’ logic, the carbon credit market (money also made out of thin air) should have been the safest and most obvious trade to buy and hold for the past 20 years. However carbon markets, like crypto, are extremely fragmented across jurisdictions, notorious for fraud and duplication and there are potentially thousands of variations globally.
If carbon was priced to its implied scarcity, the price per tonne should be in the thousands of dollars, not in the tens as it has been for years.
Cryptocurrency for elite sports brands becomes even more interesting if not only can fans purchase and be rewarded with branded digital tokens, but are also allowed to exchange back into “fiat” currency, such as euro or dollars. They can economically then share in the popularity of a club, beyond just the merchandising and events organised by the club itself. You could earn income as a fan.
What he describes here as ‘social tokens’ is financial and social engineering aka. manipulating people with prices.
The Strava ICO could just be the biggest of all time.
But until then it will remain just a thought experiment.
Strava is an incredible app to track your cycling and running fitness, analyse your training, measure times on sections, tracks and trails and measure your accomplishments against the rest of the community.
It has become so ingrained into the track and trails sports community that athletes work incredibly hard to earn virtual King Of the Mountain (KOM) crowns and other virtual badges. Whatever the species of MAMIL every rider and runner I know is on it.
People get really wound up over these virtual badges and Strava Wars rage on forums where athletes undermine accomplishments.
Imagine Strava made NFTs of these badges and crowns which
- earn the holder a stream of crypto income
- the value of the crown goes up the more downloads of the app
- the more activity grows and the more people compete in your category the higher your revenue stream from the NFT/crown
What the Strava NFT cycle would look like
- Cycling for pleasure
- Cycling to beat your mates
- Cycling to earn a virtual crown
- Cycling to earn money from a virtual crown
How quickly would the Strava Wars escalate? Where then is the line between amateur and professional?
Where is the fun?
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Future Perspectives educates and builds business strategies around disruptive financial technology to help SMEs to:
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