Tokenization: Sporting Industry
More than ever, people across the globe are exploring alternative ways to access financial products and services. Although financial technology (Fintech) companies started this transformative process, the rise of blockchain technology is driving the next wave of innovation. Decentralized infrastructure enables the use of self-executing smart contracts, which replace human intermediaries with hard-coded programming. The rapid adoption of decentralized finance (DeFi) applications in 2020 highlights the demand for solutions that improve accessibility, lower fees, and unlock more value and utility for everyday consumers.
The global spectator sporting industry is forecast to shrink from US$144.2 billion to US$139.5 billion in 2020, rebounding to US$171.7 billion in 2023. As a deeply entrenched part of daily life, there are several opportunities to unlock value and drive engagement — especially in regions where one sport is prevalent.
Player Likeness: Tokenization allows fans to invest in their favorite junior-level players to support them in making it to the big leagues. This level of engagement provides players with a source of revenue and helps develop more talent in a highly competitive industry. When a player is drafted and embarks on their career, the token value would subsequently track their performance metrics — essentially a real-world video game character.
Football Club Fan Tokens: In June 2020, the Spanish champions Barcelona raised US$1.3 million in less than two hours by selling 600,000 “fan tokens.” These tokens will give each holder exclusive voting rights in club polls and make them eligible for future rewards. Across Europe and other countries where football is popular, the issuance of a fan token might also be a viable source of revenue. These unique assets include fans in decentralized decision-making and the life of big sport and non-sport brands.
Cricket Club Investment: Cricket accounts for 85% of the sporting economy in India. As a result of this disproportionate level of popularity, tokenization would generate substantial revenue for individual clubs while driving fan engagement — emulating the token issuance seen from football clubs.
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