When the crypto company Socios launched as a platform for professional sports team fan tokens in 2019, one of the first major franchises to embrace it was FC Barcelona, the world’s most valuable soccer team, according to Forbes.
Now it’s moving further into the blockchain business, with the club’s president telling ESPN U.K. on March 1 that it plans to launch its own cryptocurrency — and even a metaverse — to go along with a previously announced line of non-fungible token (NFT) collectable tokens.
While Joan Laporta was vague about how the cryptocurrency would be used, both it and the equally vague metaverse plan represents another step in the team’s embrace of crypto as an engagement tool that began with its fan tokens.
Just using fan tokens isn’t that revolutionary anymore — particularly in soccer — with the mixed martial arts league UFC and Formula One racing teaming up with Socios last year. The company also launched a push into the U.S. last year. In November, it entered into partnerships with the National Football League and Major League Soccer, but has made its deepest inroads in basketball.
Which means U.S. sports fans — and especially crypto investors — should know what they are, because fan tokens are a very unusual segment of the cryptocurrency industry.
Cryptocurrency or Collectable?
Other than straight currency-replacement tokens, most cryptocurrencies are valuable because of what they can do.
That’s the theory, anyway: You’re investing in ether (ETH) or Cardano because you think the Ethereum and Cardano blockchains will attract a lot of decentralized applications (DApps) that will use them as utility tokens required to run a business on the blockchain. Since they have a fixed maximum number of tokens that will be produced, those tokens will become more valuable as more people need to use them.
Fan token holders generally get discounts on merchandise, special access to team NFTs, some stadium discounts, success to special fan events and the ability to vote — one vote per token — in polls on minor things like team mottos and uniform designs. Some special offerings like player interactions are also available.
Fan tokens like the FC Barcelona Fan Token (BAR) are tradable cryptocurrencies sold on exchanges, but their only utility is the ability to interact with a team you support. Other top teams like Manchester City, AC Milan, Paris Saint Germain and Juventus also have Socios fan tokens.
That’s particularly noteworthy in FC Barcelona’s case, as the team is owned by about 144,000 members who do vote on major issues, most notably electing the board and president.
It’s worth noting that the BAR token more than tripled in price in March 2021, topping out above $61 couple of days after FC Barcelona’s elimination from the prestigious UEFA Champions League tournament. So, they are definitely questionable as a pure mercenary investment.
That said, the teams can keep a lid on the number of tokens available, and the 600,000 BAR tokens the team sold for $2.20 in two hours on their June 24, 2020, launch are currently $8.44.
Fan tokens are not themselves collectables, however. They are fully fungible, meaning each one is like every other one, as opposed to NFTs, which are unique collectables and are being adopted by a far larger number of teams and sports leagues around the world.
That began with the NBA’s Top Shots video clip NFTs, which were a huge hit that actually helped bring NFTs to the attention of the general public when they launched — demonstrating the intensity of fans’ desire to own a piece of their favorite teams and players, as well as the size of the marketplace. They remain the fifth most-popular NFT line, with sales and resales of more than $935 million.