A utility token is one that lets the holder get access to something, such as a service, a functionality or a product. These utility tokens can be non-fungible tokens (NFT). They can be used to attain membership advantages such as exclusive promotional offers, merchandise, or admittance to special events. Similar to licence plates in cars, NFTs are tokens with a unique identifier that differentiates them from any other token in existence. Sports clubs are using this blockchain technology to create Fan Tokens, granting fans a certain level of privilege and access within sports and entertainment sectors.
Football clubs can use fan tokens as a novel means of fundraising. It provides an avenue for these clubs to generate revenue without altering their corporate configuration or taking on financial risk. This scenario contrasts with more traditional fundraising methods such as private equity investments or bank loans, which often entail substantial changes to the club's structure or the assumption of financial liabilities.
Fan tokens also extend the clubs' appeal beyond local or regional borders, offering a global reach that exceeds what can be achieved through merchandise sales or digital media presence alone. Additionally, the integration of cryptocurrency with football is particularly intriguing given the overlapping demographic between enthusiasts of both sectors. This convergence presents an innovative way for clubs to engage their fan base, especially those who are also interested in the rapidly evolving world of digital currencies and blockchain technology.
Football clubs that have issued Fan Tokens include Juventus, Paris Saint Germaine, Manchester City, FC Barcelona or Atlético de Madrid.
Fan tokens open up opportunities for fans to actively participate in some of the less consequential decisions of their favorite club. This could involve selecting the design of team jerseys, determining which players should take part in particular matches, or even choosing the celebratory music played after scoring goals.
They can also serve as a key to accessing and purchasing exclusive memorabilia linked to a team. These rare items often appreciate in value as time passes, offering a potential return on investment for those who have the access to these items through fan tokens.
Fan tokens in the form of exclusive NFTs can further unlock an array of VIP benefits. This might encompass a meet-and-greet session with a preferred player, VIP seating arrangements, and other unique perks. They are intended to reward loyalty; the more tokens a fan holds, the higher their level of access, and the greater their influence over team governance becomes (even if limited).
This application of the fan token derives from the concept of token gated commerce, which involves brands using blockchain technology to offer exclusive products or privileges. In essence, token gated commerce puts a 'gate' before a product, and to pass this gate, customers must possess a specific token, typically in the form of an NFT. This token must be owned by a specific crypto wallet, and the wallet's ownership must be verified by signing a transaction.
This form of commerce allows consumers to bring their own 'context', validated by their NFT ownership, influencing how the business interacts with them. The presence of a specific NFT in a user's wallet proves that "they have gone through the gate" and entered a VIP context, unlocking certain products, granting early access , or providing access to an exclusive event or livestream.
Token gated commerce essentially modernizes a time-honored idea: exclusive access as a reward. It's a mutual understanding between the brand and the customer, indicating that the customer meets the criteria to be rewarded with access to exclusive offerings. This approach is proving increasingly significant in the commerce experience, aligning it with the world of blockchain technology.
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