Fan tokens are a form of cryptocurrency which give fan-related membership perks
The rise of cryptocurrency has opened a world of possibilities for individuals and businesses. People can send money across borders without paying a heavy commission or losing monetary value in transactions of one currency to another, they can invest 24X7 in the crypto world and expect good returns. Cryptocurrency has also allowed sports clubs, celebrities, and enterprises to launch their own tokens and solicit sponsorship or endorsement by their fan base through investment and purchase of merchandise.
What Are Fan Tokens?
They are a form of cryptocurrency that gives holders access to a variety of fan-related membership perks like voting on club decisions, rewards, and merchandise designs. These can be used by sports clubs, music fan clubs, and other organisations.
In a sense, fan tokens are like non-fungible tokens (NFTs) with one big difference. While NFTs give ownership rights by virtue of digital copyright that cannot be exchanged, fan tokens are completely interchangeable. This means that fan tokens can be easily exchanged for availing products or services of the enterprise behind them. Additionally, fan tokens build identity and gather people in a close-knit community.
Another feature that sets them apart is that these tokens are not necessarily backed by any crypto coin like Bitcoin or Ethereum. Their price is usually determined by the number of people who want them or the value they attach to these tokens. Several popular football clubs like Manchester City, Barcelona, Juventus, and PSG have launched their fan tokens. Even Indian Premier League (IPL) teams are reportedly planning to launch their fan tokens to tap into the emerging cryptocurrency market.
How Do They Work?
Those investing in fan tokens can purchase and trade them with others like cryptocurrencies. The price of a fan token is generally set by the seller and is subject to change depending on the availability of the tokens and their popularity. They can be bought from online exchanges or the enterprises that have launched them.