Why do football clubs issue their cryptocurrency

In a pandemic year, there was a boom in placements of fan tokens of football clubs; Paris Saint-Germain, Juventus, Barcelona — only a dozen clubs issued their crypto coins. Why did they do it and is it possible to make money on fan cryptocurrency?

And in general, attending football matches for more than six months has become an inaccessible luxury for fans. And digital platforms have become the only way to interact with fans, according to Delloite’s 2021 Richest Clubs survey.

The French Paris Saint-Germain in 2018 became one of the first football clubs to announce plans to issue their tokens. At the end of January 2020, the club issued tokens and began distributing them to fans for € 2 through the Socios.com platform.

Simultaneously with PSG, trading began in the JUV tokens of the Italian Juventus. The club announced plans to release its crypto coins at the end of 2019 and at the same time issued its token for € 2.

In 2020 and 2021, fan tokens were issued by other clubs, including Manchester City, Barcelona, Roma, Milan, Atletico Madrid and Galatasaray.

How it works

Football clubs use a ready-made IT solution for token placement. Most of the major football clubs partner with the Socios.com platform. The platform distributed tokens for free in the format of a hunting game, and the clubs themselves sold tokens at a fixed price. In 2018, this platform released its cryptocurrency, Chiliz, which runs on the Ethereum blockchain, and before a fan wants to buy his club’s tokens, he will have to purchase a “non-football” cryptocurrency.

In this system, the ETH blockchain is responsible for the operational side of the token — input, output, and commission costs, and Socios is responsible for the interaction of the sports club with fans, as well as fans with each other: conducting polls, voting, organizing the exchange of tokens between fans.

What methods of tokenization exist

  1. Issue a token for fans. An analog of a loyalty program, which is not only cheap in its implementation, but also an excellent news feed. Such a project will attract the attention of football fans and increase the club’s recognition.
  2. Tokenization of the club. A more complex project, within the framework of which it is supposed to issue tokenized securities. Shareholders will be able to vote on critical issues and receive dividends, and the club will receive a sharp influx of liquidity into the business. A more complex, but potentially revolutionary approach to financing a football club, as much as possible similar to the people’s IPO.

What are the benefits

  • The additional inflow of financing. The club becomes less dependent on a large single sponsor, who can reduce or stop funding at one point.
  • Increased fan engagement. The token can give fans a real voice. The realization of the fact that the club is a little, but your own, dramatically increases your involvement in the affairs of the club and your attention to the team, wherever you are.
  • Expansion of geography. This way you can support your favorite club, even if you can’t go to matches and buy merchandise.

Football clubs use tokens and cryptocurrencies to try to involve fans in the club’s life. This form of interaction with fans also does not require huge advertising budgets, which is a big plus for clubs. In addition, the clubs began to issue their tokens to “digitize” their loyalty programs. With the help of blockchain, they can trade tickets, avoid counterfeiting, and also make the secondary and reseller markets less risky.

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