Do you follow sports like football or Formula 1? Do you like new technologies like cryptocurrencies and blockchain? If so, you should be very interested in fan tokens. What is a fan token? How does a fan token work? In this guide, we bring you all the answers you need.
What Is a Fan Token?
A fan token is a special category of tokens. From a tech point of view, these tokens operate on a blockchain. They closely resemble other well-known tokens like Shiba Inu (SHIB).
As for football fan tokens, most of them work with the dApp Socios. This application uses the Chiliz (CHZ) blockchain, which was created by Alexandre Dreyfus.
If that name doesn’t ring a bell, then some of his past achievements might. Before launching Chiliz, Alexandre Dreyfus made a name for himself with the creation of platforms Winamax and Chilipoker. The Chiliz blockchain platform was first launched in 2017.
«Our goal is to work harder than ever in our mission to fully establish Fan Tokens as the ultimate fan engagement tool and a powerful new revenue generator for the sports industry. » Alexandre Dreyfus, PDG of Chiliz
Through the development of fan tokens, other major players have entered this niche. This is the case, for example, of the crypto giant Binance. The exchange has launched fan tokens associated with the field of football and more. Binance launched the first fan token linked to Formula 1, which is the Alpine F1 Team Fan Token (ALPINE).
As its name suggests, this token is intended for supporters of the Alpine Formula 1 team.
As implied, fan token prices are for fans of a sports team. The tokens offer a way for fans to strengthen their commitment to a team or athlete. One of the key exceptions to this rule is the fan token real sociedad, which offers perks for events.
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How Does the Price of a Fan Token Increase?
The value proposition is simple. Each fan token has a spot price based on a live market.
As for fan tokens, price is impacted by two parameters. First of all, like any crypto, the balance between supply and demand affects the price of the asset. If demand is very strong, the price of the token will tend to increase. Conversely, if demand decreases, its price also goes down.
Another important parameter specific to the fan token concerns the news of the athlete or team being represented. In football, a capital club, like the Paris Saint Germain Fan Token (PSG), will have their own token. Each token, like the OG fan token, is linked to a specific team.
A fan token’s price is linked to a team’s performance. In the Champions League round of 16 matches in March 2022, we saw this at play. As the March 2022 match turned to Real Madrid’s favor, the price of the Paris Saint Germain’s token saw its value decrease.
During the match, PSG lost more than 13% in 30 minutes.
The same can happen to the Brazil fan token.
Now, as you might imagine, the price of a fan token also reacts to news about the team in question. In the summer of 2021, PSG acquired star Lionel Messi. In the few days preceding the transfer, the price of the PSG token more than doubled from €19 to €42.
How to Buy a Fan Token?
A fan token can be purchased in the same way as any crypto can. The simplest way is through an exchange platform. To purchase a fan token, be sure to go through the following steps:
- Choose a crypto exchange
- Open an account
- Deposit money or connect a crypto wallet
- Buy a fan token
Not all fan tokens are available for direct purchase by credit card however.
For some tokens, you may need to go through the exchange stage. This means that you have to buy a crypto like Bitcoin or Ethereum as the first step. Then, you can exchange your primary crypto for a fan token. Make your choice by choosing the right trading pair on the spot market.
Here, we’ll start with an example. Let’s imagine that you’re buying the Paris Saint Germain token (PSG) through the Binance trading platform. You have two options available to you.
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Keep in mind that the PSG fan token is available for direct purchase on Binance. You can buy the quantity of PSG fan tokens you choose and pay by bank card. If you already own crypto, you can then make an exchange to obtain PSG fan tokens. At the time of writing this article, Binance offers the following trading pairs for the exchange of PSG:
- PSG/BTC
- PSG/USDT
- PSG/BUSD
You can buy the PSG fan token by exchanging one of the following three cryptocurrencies:
- Bitcoin
- Tether
- Binance USD
What Are the Advantages of a Fan Token?
Fan tokens represent a new way to strengthen the link between a team–or an athlete–and their fan base. Fan tokens are considered as a kind of shareholding. The difference is that fans invest their own money in an asset whose performance is linked (in part) to the team’s.
Unlike shareholding, the entry ticket with the fan token is inexpensive and very accessible.
It’s also more flexible. At any time, an invested fan can resell all or part of their holdings. To do so, you need an internet connection and a crypto exchange. Through these NFTs, you can do some sports betting. However, fan tokens are not substitutes for sports betting.
The potential of the fan token goes further than simple speculation. In return for their investment, fans are granted unique rights and benefits. The owners of fan tokens are even consulted for certain decisions concerning the team or the athlete.
Holders of the Valencia Fan Token (VCF) had a say in the message displayed on their team’s armbands. Fan tokens give you the opportunity to participate in lotteries to win VIP tickets also. Owners may get invited to events organized by the team or athlete.
The Biggest Fan Tokens
Fan tokens are, for the most part, a great success. Football hosts the most popular tokens. The leading fan tokens follow Formula 1, martial arts and even tennis. Currently, there are over a hundred fan tokens. According to CoinMarketCap, the top 15-fan tokens by capitalization are:
- Alpine F1 Team Fan Token (ALPINE)
- Paris Saint Germain Fan Token (PSG)
- SS Lazio Fan Token (LAZIO)
- Santos FC Fan Token (SANTOS)
- FC Barcelona Fan Token (BAR)
- Manchester City Fan Token (CITY)
- FC Porto Fan Token (PORTO)
- AC Milan Fan Token (ACM)
- Inter Milan Fan Token (INTER)
- Galatasaray Fan Token (GAL)
- AS Roma Fan Token (ASR)
- Atletico de Madrid Fan Token (ATM)
- Juventus Fan Token (JUV)
- Trabzonspor Fan Token (TRA)
- Fenerbahçe Token (FB)
With tokens like the Juve fan token, we can clearly see how predominant football is. Of the 15 largest fan tokens, 14 are for a football team. Make no mistake about it; it’s not the biggest championships that dominate the market. Not all of the listed football teams hold top awards:
- Italian Championship—5
- Turkish Championship—3
- Spanish Championship—2
- French championship—1
- English Championship—1
- Portuguese Championship—1
- Brazilian championship—1
There are also fan tokens relating to national football teams. For example, you can buy a fan token to support Spain or Portugal.
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