NFTs (non-fungible tokens) have been making a breakthrough in the crypto world as it has exceeded our expectations of being a token for digital art. NFTs are now being used for gaming, intellectual property, science, and advertising. But, the sector currently catching mainstream attention is the sports industry.
Blockchain in sports has already made good progress as many successful projects are decentralizing different areas of the space. For example, SportX is a popular crypto peer-to-peer betting platform for sporting and political events. Also, Sportradar is an anti-doping organization that uses blockchain technology to record the details of their remote tests. Some athletes are even being paid in cryptocurrency.
But, with NFTs on the scene, the sports industry is advancing faster than anyone expected. This was kicked off by NFT collectible cards — unique digital cards representing athletes or sports moments that can be traded on NFT platforms — NBA Top Shop and Sorare are the top 2 collectible platforms in the space. They both have a combined sales volume of over $800 million.
So now, let’s look at more ways NFTs can be used in sports, along with the projects that are committed to making it happen.
The Potential Use Cases of NFTs for Sports
Raising revenues through fan tokens
Before the rise of NFTs, there was a project called Gallant exchange that focused on tokenizing athletes through their initial player offerings model. It was a means for athletes to raise capital by investments from their fans. These tokens gave athletes the freedom to fractionalize and sell some of their ownership too.
Now that NFTs have come along, we’re seeing football clubs use fan tokens to raise revenue and interact with supporters.
How are NFTs monetizing sports teams?
Blockchain tech lets sports clubs increase their engagement by giving fans a new way to interact with the club, the players, plus earn points that correspond to real crypto as opposed to being a virtual number that offers zero value. Fan tokens make it possible for teams to onboard a self-perpetuating virtual ecosystem. This is why football team Barcelona FC’s fan token has a $60+ million market cap.
DEIP token is a crypto project bringing forth this use case by revolutionizing NFTs and blockchain in sports with F-NFTs.
What are F-NFTs? These are fractionalized non-fungible tokens — essentially allowing multiple people to own different percentages of a single NFT. F-NFTs combine NFTs (ERC-721 contracts) with Ethereum’s ERC-20 contracts. The NFT is programmed to send ERC-20 contracts to fractional owners.
F-NFTs could provide a new way for sports teams to monetize their club’s ownership. Fans holding a certain percentage could get discounts to their favorite team’s games and passes to stadium VIP boxes.
F-NFTs as fan tokens give it more value — there isn’t a need to increase the supply to ensure liquidity.
NFTs as sporting tickets
There are three major problems when it comes to physical tickets: They get lost, forged, and stolen. This has motivated the ticketing industry to go digital as it’s more convenient. However, digital tickets still aren’t enough to stop fraud and inflated reselling prices.
A blockchain-based solution is the only way to combat these issues. This is why Ticketmaster partnered with a blockchain ticketing firm in early 2021. With blockchain technology, ticketing companies can track how many times a ticket was resold, the past owners and the resell prices.
So, how do NFTs come into the picture?
Blockchain ticketing companies still use a centralized approach to handling tickets. Tickets are obtained or exchanged through fiat, and the transfer of ownership is conducted within the company as opposed to by protocol.
NFTs present the built-in architecture for sporting tickets to be hosted on. It allows users to transfer ownership without an intermediary. Also, the NFT holder has the freedom of choosing how they’ll be compensated for the sale of their ticket. Thanks to stablecoins, the option of a dollar (USDC, TUSD, USDT) is possible.
NFTs can potentially disrupt the need for ticketing companies as they’re known for taking high fees (as high as 37%). Stadiums, arenas, and other hosting venues can work directly with event planners to issue NFT tickets. Venues can receive royalty fees when a ticket is sold or resold. As great as this sounds, a decentralized ticketing system that involves fiat to crypto seems required for NFT tickets to be considered.
Cybersports NFTs integrated into metaverses
What is a metaverse? They are digital 3D worlds and spaces to meet, interact, transact, play games, and use NFTs. A common example is Decentraland — a 3D world where users can buy and sell virtual land.
Metaverses are a growing trend in crypto as Facebook is investing millions in user-created worlds, and popular blockchain games like Axie Infinity are demonstrating the use cases of metaverses.
Sports NFTs could become functional in metaverses (making them even more valuable).
We could see things like:
- NFT fantasy sports and wager games that result in winners receiving exclusive NFTs or a fractionalized share of their opponent’s F-NFTs.
- Virtual spaces that represent different sports teams, and by completing the objectives they set out, you receive fan tokens or F-NFT shares.
- Virtual rooms where you can speak with sports players, but only if you’re holding any of their individual or team NFT tokens.
Revolutionizing the Sports World with NFTs
NFT’s impact on sports could affect how sports teams operate in the foreseeable future.
It could also give small and upcoming sports teams the opportunity to monetize themselves and bypass the financial hurdles known to stop them from expanding.
NFTs for sports are here to amplify and disrupt the industry.
In due time, we’ll see the best it has to offer!