How NFTs are transforming the future of sports fandom
Adoption in the sports world has significantly boosted the rapid growth of the NFT space over the past two years. In particular, Dapper Labs’ NBA Top Shots collection has proven just how substantial the existing market is for blockchain-based sports collectables. However, the potential for sports NFTs extends far beyond this. NFTs can do more than just digitise the existing collectables and trading card market — they can radically transform the nature of sports fandom.
As Cudos’ NFTs and Metaverse product manager George Mathai puts it: “Today, we are seeing rapid adoption of NFT within the sports ecosystem with successful experiments across sports collectables, match tickets, and fantasy sports. Digital assets will be the next source of customer acquisition and will drive a large percentage of club revenues.”
In this post, we’ll be drawing on Mathai’s industry insights and looking at some of the exciting prospects for the evolution of sports NFTs, from virtual access tokens to dynamic NFTs and digital wearables.
The evolution of sports NFTs
Launched in October 2020, NBA Top Shots became one of the major success stories of the NFT boom. Four months after its launch, the marketplace saw more than $45m in daily transactions. Sales have fallen significantly from this peak but remain consistent. Dapper Labs has secured deals to produce official NFT collections for the NFL and UFC, and many athletes have launched their collections.
Despite their success thus far, digital versions of traditional sports collectables represent only the first step for sports clubs looking to incorporate NFTs into their existing revenue streams. As Mathai notes, the possibilities extend far beyond this: “Some of the interesting NFT use-cases we are seeing in the market include exclusive access to live behind-the-scenes conversations, converting digital match ticket stubs into memorabilia, and the most futuristic of all, as a passkey to access the live match inside a metaverse with a special viewing seat (like a coach’s view).”
As the metaverse begins to take shape, there is also an obvious crossover with the emerging market for digital wearables. For dedicated fans, the ability to deck out their metaverse avatars in a digital version of their favourite team’s kit would be hard to resist — all the more so, if the kit is verifiably rare.
Dynamic NFTs and the future of fan involvement
While many of these possibilities simply expand the existing functionality of NFTs to the sports world, there are also technical developments within the NFT space that will enable a range of exciting new use-cases to emerge.
The development of dynamic NFTs is perhaps the most significant of these possibilities. While conventional, “static” NFTs contain fixed data, dynamic NFTs can be continually updated by interacting with off-chain data sources using oracles. This could mean producing player-specific NFTs that include continually updated performance statistics that transform when a player achieves a career milestone. This would allow fans to not just cheer from the sidelines but actively “invest” in players, as the value of the NFT they own will track in line with the player’s performance.
The potential to drive fan engagement through this type of evolving collectable is significant. So too, however, are the technical requirements to enable them.
A decentralised foundation for sports NFTs
Dynamic NFTs and metaverse-ready wearables have the potential to transform sports fandom in the coming years, but they will require a blockchain infrastructure capable of supporting them. The most popular chain for hosting NFTs, Ethereum, is beset with issues stemming from its proof-of-work consensus mechanism. These issues make it expensive for trading NFTs, potentially pricing out those who would like to start a collection with affordable tokens, and pose problems for the higher computational demands of dynamic NFTs and metaverse-ready digital assets.
The Cudos network will solve the scalability and throughput issues facing Ethereum while also offering a robust and fully decentralised computing infrastructure to support the demands of dynamic NFTs and metaverse assets. In addition, Cudo Compute will allow for the open, peer-to-peer distribution of computing resources at scale so that the more demanding implementations of sports NFTs will not have to turn to centralised solutions.
As Mathai summarises, “Cudos is actively working with all our partners to help push the boundaries of what is currently possible. Our blockchain enables faster compute and decentralised storage to effectively meet the sports fans’ real-time demands inside a metaverse. Cudos will empower entrepreneurs to build applications that offer an immersive experience for sports fans through dynamic NFTs embedded with exclusive content.”
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Cudos is powering the metaverse bringing together DeFi, NFTs, and gaming experiences to realise the vision of a decentralised Web3, enabling all users to benefit from the growth of the network. We’re an interoperable, open platform launchpad that will provide the infrastructure required to meet the 1000x higher computing needs for the creation of fully immersive, gamified digital realities. Cudos is a Layer 1 blockchain and Layer 2 community-governed compute network, designed to ensure decentralised, permissionless access to high-performance computing at scale. Our native utility token CUDOS is the lifeblood of our network and offers an attractive annual yield and liquidity for stakers and holders.