Fan Coins: What are they? And how do they work?
What are fan tokens?
Fan Tokens are designed to give membership benefits to fans of sports bands, teams, and the like. Most of the time, fan token holders are entitled to membership perks, such as access to exclusive prizes, experiences, content, and the right to vote on the organization’s decisions.
A special kind of cryptocurrency token is the Fan token. It gives holders access to various fan-related activities. The fan-related activities are voting on some of the club decisions, teams’ bus designs, fan shirt designs or match ticket special discounts, etc. These are some examples of what could be the possible activities that are offered by fan tokens.
A little bit of something for everyone is what Fan tokens give. For the fans, it’s the chance to decide, in some (often trivial and legally non-binding) way, the future of their favorite sports team or pop star, and speculate on their success in the web3 markets. For the sports team or pop star, it’s free money, honey!
These fan tokens are everywhere, across sports ranging from soccer to the NFL to cricket. Bands like Portugal. The Man is experimenting with them, too.
The economics of fan tokens are as bizarre as they are volatile, but for some famous people or organizations, it has proven a lucrative stream of income that keeps fans in the fold.
How do fan tokens work?
Unlike Non-fungible Tokens (or NFTs), the basic idea is that an organization like a sports team mints lots of fungible tokens, and then sells or distributes them to the fans or speculators. These tokens often retail on secondary marketplaces, just like cryptocurrencies such as Bitcoin or Ethereum, which means that they are beholden to conventional market forces.
Fan tokens usually give limited governance rights to holders. For example, the Paris St. Germain’s fan token, lets its holders access exclusive VIP experiences and vote on the cover of the fan edition of the soccer game FIFA 22. Fans had selected a message to feature inside the team’s locker room too for a May 2021 match, and it says: “Together we can, Together we will! Let’s take another step towards glory and victory.”
Fan Tokens vs NFTs
As mentioned above, Fan tokens give fans memberships and allow them to gain exclusive offers and hear their voice in the team’s decisions. Fan tokens can be replaced with other such tokens, making them ‘fungible’ as opposed to Non-Fungible Tokens (NFTs) which are irreplaceable.
How Do Fan Tokens Work?
Fan tokens utilize a no-fixed-value principle and have fluctuating value or price, which means that their weightage comes from the value of fan participation and involvement. Initially, a fan token is offered at a fixed starting price. Then, it either gains or loses value over time. Fan tokens dictate the shape of fan activities, participation, and revenue streams for sports teams offering those tokens.
Fan token vs DAO token
Fan tokens are similar to DAO governance tokens. A governance token let token holders decide and have a say in tech issues. Fan tokens can be considered a way of expressing ‘team patriotism’ by fans.
Types of fan tokens
Different kinds of fan tokens are being released by multiple sectors. Sports tokens and music tokens are the most famous types of tokens. Increasing fan involvement and generating revenue is their main objective.
Football
Most fan tokens are Football tokens, compared to all other sectors involved with such digital assets, it’s in the top place. According to some sources, more than 19 Football clubs have already made their respective fan tokens. Examples include PSG, AC Millan, Manchester City, and FC Barcelona.
Gaming
E-sports teams and Gaming applications use fan tokens to amplify community engagement. For example, some of the big names Socios has partnered with are Team Alliance and Team Heretics, among many others.
Movies or Anime
The entertainment sector has stepped into the world of digital assets recently. One of the major movie companies ‘Mogul,’ has introduced NFTs and a DeFi platform for the showbiz industry. Additionally, they have announced a plan to introduce fan tokens for this sector as well.
Fighting
Not long ago, UFC and PFL released their fan tokens. Fan tokens escalate fan participation in polls and chats in professional MMA organizations and the like.
Should I Buy Fan Tokens?
A high-risk investment is what many think about buying cryptocurrency. Meme coins are the most susceptible to drastic price swings as the crypto market is known to be volatile already. But in reality, great risk can always mean great rewards too! As some prices of the fan coins may skyrocket if they catch on and become so popular.
Like what you’re doing on any investment, you should always be careful and weigh the solutions and the value that the product represents. Fan tokens may be less of an investment and more of a buy-in to the special benefits that sports clubs can provide.
We’re here for the long haul! And we’re preparing something BIG for you our dearest #MangaArmy! Stay tuned👀🎁📦
