The Potential of Using Tokens in Sports: Expert’s Talk

Introduction

The advent of Security Token Offerings or STO as they are called has revolutionized the sports industry. All the big names from Barcelona Football Club to Sacramento Kings in the NBA have adopted and are experimenting with STOs in their marketing, promotions, and fan engagement programs. 

There are multiple advantages of using STOs right from the sales of merchandise to allowing fans to monetize their engagement in different decision-making activities of the club. 

We look at some positive aspects of STOs in sports. We discuss their credibility, look at the various ways in which they are being adopted, and also discuss what the future holds for higher crypto and Blockchain engagement in sports. 

Security Token Offerings (STOs): What are they?

Let me try to explain STOs with the help of a simple example. 

Imagine that the club in partnership with a blockchain exchange, creates a number of tokens, that derive their financial worth from a physical asset, let us say it is cash in this instance. 

Essentially, tokens are financial instruments that represent a form of security (in the last paragraph, we have mentioned it could be cash). Owning a token means that you own a piece of security. 

The basic advantage of a token is that a bigger entity that is difficult to divide can easily be fractionalized into smaller components. For example, if someone is willing to sell a small part of a bigger asset, he or she can cash in the same with someone willing to purchase it. 

STOs in the Sports Industry: The Major Benefits

In this section, we highlight some of the major advantages of tokens being used in the sports industry- 

• Rewarding Fans by giving them a Real Stake- 

In the recent past, many teams and clubs have pursued tokens with the intent of rewarding fans for their engagement with the teams. By cashing in the tokens, fans can take a part in some decision-making aspects of the club. This can be with regard to the choice of jersey designs for the new year, the name of the new mascot, and the friendly matches that the team would play. 

• Sales of Merchandise driven by Tokens- 

Many sports teams have started to use tokens for selling their merchandise, food, beverage, and other memorabilia within the stadium. Tickets have also been distributed using the token system and the same has been successful in weeding out the influence of touts and black-marketers that used to get tickets and then sell them at a premium on the darknet (on black). 

• Segregating Offerings to Special Stakeholders- 

Football teams realize that not all fans and engagements are equal. Some people invest more, by, for example, purchasing season tickets, box offices, and buying a premium subscription. These fans and stakeholders can be rewarded by allowing for extra facilities that can only be accessed by individuals that possess the tokens and locked for everyone else. 

The Future of Cryptocurrencies and Blockchain in the Sports Industry

According to crypto-news-flash.com, everyone from players to the marketing and financial officers of a sporting team are interested in realizing the effect of cryptocurrencies and blockchain in their ecosystem. 

This is in line with the sporting industry taking the lead in terms of its engagement with anything new technologically. A prior example in this regard would be this ecosystem’s engagement and boost for social media. 

The Coronavirus pandemic has dented in-stadium ticket sales and costs massive revenue losses for sporting teams. While online streaming and ad sponsorships have helped them with a breather, teams believe that engaging with Cryptocurrencies and Blockchain can open more doors. 

Engaging with such tech also allows clubs and teams to have a truly global presence in terms of offering security and financial instruments to their fans whether they are in India or any African country. 

The Bottom Line

‘Fanvestors’ a new term coined by the rise of STOs in sports is here to stay. In the coming years, we hope to see greater amplification and applications of the same in different aspects of sports. The promise of easy liquidity, ease of usage and lesser nationalized regulations offer immense scope for growth within the sporting community.