In a first for professional football, Spanish team DUX Internacional de Madrid used crypto to buy a new player. Ex-Real Madrid player David Barral is a new addition to the club supported by cryptocurrency trading firm Criptan.
While this isn’t technically the first recorded Bitcoin (BTC) transfer, Turkish amateur club Harunustaspor bought 22-year-old player Omer Faruk Kiroglu in 2018 for 0.0524 Bitcoin and 2,500 Turkish Lira. This move was taken in order to draw the club’s attention in the international media to the fact that it did “something new” but did not necessarily trigger a blockchain adoption in football.
The acquisition of DUX is an indication of the introduction of blockchain technology and crypto tokens in the football community and its fans. This development came shortly after European soccer giant AC Milan joined the blockchain train and on January 18 announced the upcoming launch of its domestic fan token ACM on the Chiliz blockchain, a fan engagement platform.
The CHZ blockchain includes 20 other sports organizations and has reportedly been installed 450,000 times, with token sales exceeding 14 million. The reigning Italian Serie A champions Juventus ($ JUV) fan token was one of the first to appear on the platform. Alejandro Laplana, CEO and founder of Shokworks – a company that develops digital platforms for various brands and sports teams – discussed AC Milan’s move with Cointelegraph:
“This is great because it can engage their 250 million (+) fans around the world and involve them in club policy exercises like voting and direct feedback. In addition, they can be further linked to gamified loyalty and reward programs through secure smart contracts that reward engagement with additional tokens. It can also help build liquidity by listing the tokens on the exchanges. “
AC Milan’s entry into the blockchain domain is an interesting case compared to other football clubs that have previously joined as it is a club with a large fan base. The club’s successes have been rare over the past decade and this move must streamline fan engagement and allow it to attract new fans, especially given the current drive to win the Serie A championship title.
In addition to AC Milan, other football clubs such as Juventus, Paris Saint-Germain, Arsenal and Manchester City participate in the blockchain and crypto community. In fact, Spanish giant FC Barcelona grossed $ 1.3 million in less than two hours after launching its BAR token. In February 2020, he sold 600,000 crypto-based tokens for $ 2.20 each. The initial sale was oversubscribed more than five times. The price of the BAR rose 200% in the first five minutes of trading on Chiliz. The company currently has a market capitalization of over $ 20 million.
Laplana went on to explain that the FC Barcelona token is unique compared to the token offerings of other football clubs: “It helped inform the design of the mural for the first team locker room through the interaction of the fans. […] The token was developed to reward holders of the tokens (fans) for their increased commitment with more tokens. “
Fan operation during COVID-19
The global coronavirus pandemic stalled sporting events, canceled most of them and postponed the 2020 UEFA soccer championship and 2020 Tokyo Olympics to 2021 for the first time in history. The soccer industry was due to COVID-19 restrictions and the general lack of engagement and monetization on the part of global fan base hit by empty stadiums. Since the fans are not in the stadiums, tokens give them voting rights in club-specific surveys or access to VIP experiences or can be redeemed for exclusive club items.
Another way to motivate fans is through trading cards and fantasy football games based on a blockchain. For example, Sorare is a blockchain-based fantasy soccer game that uses classic soccer trading cards and fantasy league games. It runs on the Ethereum blockchain and uses non-fungible tokens. An NFT is a special crypto token that represents something unique and is therefore not interchangeable with one another. FC Barcelona center-back Gerard Pique is a seed capital provider for Sorare.
Use cases go beyond the intervention of the fan
In the midst of the ongoing global pandemic, fan engagement is the single most important aspect the introduction of blockchain can bring to football. However, there are several other use cases that can be critical.
Explaining that football clubs can use the technology to build cash for certain programs such as stadium renovations, Laplana added, “Another use case is clear and transparent voting in a sport that has unfortunately been tarnished by decades of corruption and controversial election results, at every level of sport . “
The ongoing global pandemic has been devastating for sports organizations, including soccer, as the stadiums are currently empty and are affecting the teams’ revenue and fan base. Various large international clubs are now turning to crypto and blockchain to find ways to fill this gap.
These use cases could be used for clubs that have a sizeable fan base and are currently facing challenges on and off the pitch. Stefan Ateljevic, founder of BitcoinPlay – a bitcoin gamification platform – told Cointelegraph how cryptocurrencies could play a bigger role in the economy of the football world:
“For the next several years, I wouldn’t be surprised if clubs started using crypto as legal tender with one another – if it becomes a legal option. Clubs with cryptocurrency reserves could simply use these assets to buy and trade players like any other fiat currency would. This could extend to even salaries as crypto becomes more integrated into the business world. “
With the advent of smart contracts, clubs could also use blockchains to encode a player’s transfer records, allowing football organizations to trace a player’s history from youth academies to global sports leagues. The same can be done with the player’s medical history so that club management can make informed decisions about his or her selection from the talent pool. This can be achieved using tools like PowerAgent, a smart contract ecosystem that enables sports professionals to create and manage smart contracts by connecting all parties involved in the athlete’s contract negotiation and contract process.
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Fans could also benefit from a simpler mechanism for ticketing exchanges, as the technology makes exchanges safer, more reliable and prevents tickets from being sold on the black market. Another upcoming use case could be the monetization of proprietary content on over-the-top media platforms and current popular general content providers – like Netflix, Disney Hotstar, YouTube, Amazon, etc. – via smart contracts which are critical to team growth Meaning are clubs, leagues and players.
Regulation plays a key role
Blockchain technology and crypto can be used in various sports around the world and offer the opportunity to engage fans, stakeholders and players alike. Roham Gharegozlou, CEO of Dapper Labs – a blockchain-based gaming company – told Cointelegraph that blockchain technology has been used in other sports in the US:
“Sports leagues, teams and athletes are beginning to understand the importance of cryptocurrency and blockchain technology. Fans of the Sacrament Kings and Dallas Mavericks can use Bitcoin to purchase tickets and merchandise. […] Over $ 12 million has been invested in NBA Top Shot by collectors, and we’re still just in our beta. The most recent top recordings have cost up to $ 35,000, and this trend shows no signs of slowing down. “
Although Dapper Labs is a member of the United States National Basketball Association, popular sports in the United States such as basketball, soccer, and baseball are less present in the cryptosports community compared to soccer.
Ateljevic also took the view that the regulatory situation in the US makes it difficult for clubs to adopt the technology: “The crypto regulations are different in each country or zone, as is the case in the EU. In other words, I think it would be a little more complicated for the NBA or NFL to use crypto in their loyalty strategy. “Laplana explained how this regulatory environment can change:
“It is up to the club boards and their partners to take responsibility for the development and introduction of fan tokens – in close contact with the national regulatory authorities – which can create added value for the fan base and the organization in a compliant framework. “