Pro sports teams piling on to Chiliz fan token opportunities
As the number of activities per user per week on the fan engagement app Socios has doubled in the last three months, Tottenham Hotspur gets set to launch a new token
Vasyl Shulga/Shutterstock modified by Blockworks
As fan tokens proliferate, an executive at the SportFi network Chiliz said engagement via such assets is on the rise.
Chiliz’s native token powers Socios.com — a fan engagement and rewards app on which fan tokens are offered. The firm launched the public mainnet of its layer-1 blockchain, Chiliz Chain, in May.
The number of activities per user per week on the Socios app has doubled in the last three months, Chiliz chief corporate affairs officer James Newman told Blockworks.
He added that the number of users redeeming rewards on the platform grew by more than 50 percent from 2022 to 2023.
Fan tokens proliferate
Fan tokens are a fungible digital asset allowing holders access to exclusive experiences or rewards.
The English Premier League’s Tottenham Hotspur said last week it would issue its Spurs Tank Token on Chiliz Chain via Socios. Expected to soon list on major global exchanges, the token could be purchased for $2 a piece via a Fan Token Offering (FTO) that took place Wednesday.
The tokens sold out in about five hours, a Chiliz spokesperson said, as fans from 79 countries bought a total of 500,000 tokens during the offering.
“The partnership is another example of how the club is working to create additional recurring sources of revenue to reinvest in our football activities,” Ryan Norys, the team’s commercial sales director, said in a statement.
Tottenham Hotspur’s interest came about five years after football team Juventus kicked off its partnership with Socios.com. Other squads had followed suit, including Manchester City, Inter Milan, Paris Saint-Germain, FC Barcelona and Arsenal.
In all, roughly 80 teams and organizations use Chiliz Chain to host their fan tokens as a way to offer various rewards and experiences to supporters. More such announcements are expected in the coming months, Newman said.
The market capitalization of fan tokens was roughly $300 million on Tuesday, according to CoinGecko data — with those issued by FC Barcelona, esports club OG and Ultimate Fighting Championship leading the way.
Engagement and experiences
Most of the nearly 80 fan token offerings Socios has carried out have sold out in hours, if not minutes, according to Newman.
Fans aged 18 to 35 comprise more than half of the Chiliz ecosystem’s 2 million users, Newman said.
Though 40% of Gen Z and Millennial sports fans said that they were familiar with the use of NFTs and fan tokens in sports, according to a June Deloitte survey, only about 5% surveyed said they have bought or received one in the last 12 months.
The Deloitte report noted that 37% of fans familiar with NFTs see them as a fad in the sports realm. About 32% see them as an investment, while 24% view sports-related NFTs as something fun to express fandom.
Newman noted that Fan Polls, through which holders vote on fan-related decisions, are particularly popular when linked to topics such as merchandise designs, stadium art or celebration songs.
Socios projects nearly 9 million unique votes to be cast in 2023 after users voting on Socios’ Fan Polls hit an all-time record in August.
Rewards such as meeting current and former players are also gaining steam among token holders, Newman added. Among the most popular is an offering called LiveTheDream, which lets fan token holders play a match in their team’s stadium alongside club legends.
The Deloitte survey found 60% of fans likely to buy a fan token if a chance for free premium seats were offered.
“In the short term, what we are seeing is that clubs are further embracing the tool as they become more familiar with its nature and understand its potential, integrating it as part of their membership [or] loyalty offering and adding many more benefits to it,” Newman said.
Juventus, for example, last month added benefits fans could access through the JUV Fan Token — such as playing matches at Allianz Stadium or getting early access to match tickets.
“In 2018 Juventus was one of the first clubs in the world to understand the potential of this technology and the results have proved us right,” Juventus Chief Commercial Officer Tiziana Di Gioia said in a statement.
The vision for fan tokens goes beyond the Socios.com platform, Newman told Blockworks, as such assets could ultimately allow access to different digital ecosystems.
“We are also working to integrate our partners’ other sponsors to the platform, providing them access to our community of 2 million-plus sports fans whilst increasing the utility of our fan tokens,” Newman said.
Updated Oct. 4, 2023 at 5:01 pm ET: Added information on Tottenham Hotspurs’ Fan Token Offering on Wednesday.
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