Infographic by Liquiditeam. Background photo by Nicholas Green on Unsplash

Professional Sports Need to be Tokenized

Why sport is an ecosystem tailormade for blockchain-based innovation.

The realm of professional sports lends itself perfectly to an innovative approach to distributing rights and incentivizing desirable actions: tokenization.

Toke… what?

Glad you asked. Tokenization is a concept that became popularized in the world of blockchain, crypto assets, and decentralized networks. It describes the act of representing all kinds of rights in the form of a digital, unique and cryptographically secured token. On an elementary level, we are talking about the certification of rights in a digital way rather than, say, in paper documents.

To understand why that is interesting, let’s look at the kind of rights that may (theoretically) be tokenized:

• ownership rights to an asset, e.g. a tokenized equity in a company
• contractual rights e.g. a tokenized claim to be paid by an insurance company in case of certain events
• profit participation rights e.g. a tokenized financial instrument that grants holders a certain percentage of the issuers net revenues
• governance rights e.g. tokenized votes in an organization’s governance body