Fan tokens are the latest result of an ever-increasing enmeshing of football and cryptocurrencies.
Several European clubs have unveiled their own digital assets lately. For people already investing in the cryptocurrency market, the term ‘fan token’ might be self-explanatory.
However, if you are among football fans who have just started your digital investing journey, you will need to learn more about these brand new assets.
What are fan tokens?
Fan tokens are cryptocurrencies that permit their holders to access a variety of different fan-related perks. The nature of these privileges varies with different clubs. Some teams let their token holders vote on which songs to be played in their stadium, while others have offered discounts for tickets and items in their official stores.
Most of the clubs offering fan tokens have signed up to a company called Socios for launching their virtual coins. Socios also takes care of the subsequent trading of the currencies.
Where can you buy fan tokens?
Similar to other cryptocurrencies, users can exchange coins on trading platforms. Each coin has a specific value that changes based on its supply and demand.
As of now, most of the fan tokens are based on the Chiliz blockchain. AC Milan, Manchester United, Barcelona, Juventus and several other clubs have launched their coins via Chiliz and their partner Socio.
Fans must purchase CHZ via a crypto exchange in order to acquire fan tokens that exist on the Chiliz network. However, CHZ and Socios are not the only providers of fan tokens.
Recently Binance have unveiled their own platform for fan tokens. By the time of writing this article, Lazio, Porto, and Santos are the top football teams whose coins are available on Binance. For buying these coins, you must purchase BNB via a crypto exchange to own your desired token.
You can find CHZ and BNB on these platforms:
Which clubs have their own tokens?
Socios have launched over 50 fan tokens on the CHZ blockchain. Their list includes a variety of different clubs, from elite European teams such as Manchester City and Barcelona to smaller clubs like Dinamo Zagreb and Galatasaray.
Binance have focused more on Formula 1 and other sports. However, their Lazio and Porto coins are already frontrunners in the fan-token market.
Based on data from Coinmarketcap, Alpine F1 Team coin is the fan token with the highest market cap. Paris Saint-Germain, Manchester City, Lazio, Porto, and Barcelona fan tokens closely follow the Formula 1 team.
Fan service or marketing ploy?
Many observers still see purchasing cryptocurrency as a high-risk investment. Fan tokens, in particular, have received negative feedback from market advisors recently.
Clubs hold the majority of their fan tokens, which can distort the market. According to BBC, fans own only $376m worth of the top 13 tokens while the overall value of these coins exceeds $1.9bn.
Another criticism comes from observers who believe clubs have latched on to the new marketing opportunity to compensate for their financial losses during the pandemic.
They also argue Socio and other platforms are not offering meaningful perks to holders. Voting on minor decisions such as choosing stadium songs has left many fans feeling cheated.
Despite the drawbacks, you will still find plenty of investors benefiting from trading the fan tokens. Like all investment opportunities, however, if you intend to buy your favourite club’s token, it is better to avoid following the crowd and make decisions based on your research.
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