Digital currencies can take various forms. We all know about Bitcoin which is a store of value along with a payment method, and also Ethereum that can also serve similar purposes. But there is another form of digital currency that operates more as a reward system. These are known as cryptocurrency fan tokens.
These tokens operate differently compared to Ethereum and Bitcoin. In fan tokens, the holders are granted the access to the membership benefits of the football clubs, musicians, YouTube content creators, and many more.
So what is a cryptocurrency fan token meaning and how does it work?
What Are Cryptocurrency Fan Tokens?
Cryptocurrency fan tokens are similar to membership tokens for a particular creator, sports, musician, club, or organization. The holders of crypto fan tokens typically get access to voting rights on the matters of the club, get access to exclusive content, ticket raffle, and many more.
These are at times compared to NFTs (Non fungible tokens) as in that they portray ownership, entry to a particular group, and membership. However, most of these cryptocurrency fan tokens are fungible, which implies that they can be exchanged for another similar fan token. In that, the crypto fan tokens are more similar to Ethereum or Bitcoin.
The fan token crypto price arrives from what the token offers. Most fan tokens are minted and owned by the football club. The more advantages this fan token provides there are more changes for this token to succeed. By evaluation, the more fan tokens a project holds, be it a YouTuber or a football club, the more opportunity there is for the customer buy-in, the chances for success rises.
Working Of Crypto Fan Tokens
Crypto fan tokens operate fairly similar to a normal digital currency. Initially, the user researches the fan token they want to purchase, heads to a digital currency exchange that lists the fan token, and makes their purchase.
And, like other cryptos, fan tokens are subject to the quirks of the crypto markets. That is, they are fluctuating and are just as likely to increase as to fall, and there is completely no assurance that the user will end up with any money at all. Cryptocurrency fan tokens imply varied things, based on the project.
The largest digital currency fan token site in the world is presently Socios, which allows sports clubs to design digital currencies for their supporters. For instance, on Socios, the user will find fan tokens for football clubs like Paris St. Germain (PSG), Manchester City, and Juventus, Formula One team’s Alfa Romeo and Aston Martin, eSports teams such as OG and Heretics, cricket clubs from the IPL (Indian Premier League), the New England Patriots, and many more.
Indeed, the PSG signing fee of Lionel Messi had some of the digital currency fan tokens of the club.
Once a user purchases crypto fan tokens for their preferred team, they receive the opportunity to vote on varied purposes at their club. There is no predetermined list of matters that applies to each and every club’s fan token offering, but some of the crypto fan token list:
- Club bus designs
- Dressing room designs
- Music played after scoring a goal/points
- Playing a message in the dressing room before the game
- Ticket raffles/rare merchandise drops
- Exclusive fan token content
But Socios is not the only site providing crypto fan tokens for the sports clubs. The user will also find fan tokens Binance, where they can purchase crypto fan tokens for three football teams at the time of writing this.
Conclusion: Should You Purchase Crypto Fan Tokens?
As with any digital currency investment, crypto fan tokens are a risk. According to reports, the soccer fans had raised $300 million into cryptocurrency fan tokens, even though some coins have reduced highly in value since their launch. Digital currency fan tokens for Lazio (Italy) and Manchester City (UK) decreased by 70% and 50%, respectively, though both from relatively high prices during their launch.
Having said that, some of the fan tokens have offered better returns compared to Bitcoin, with tokens from Trabzonspor (Turkey) and Inter Milan (Italy) providing better gains compared to Bitcoin in the whole of 2021.
Moreover, in many cases, the offering sports team or club holds onto a large number of their tokens, deforming the market. The report found that the best 13 clubs on the Socios channel hold a total of $1.9 billion worth of fan tokens, yet fans only hold $367 million. The clubs offering the tokens hold huge power over any potential investors, which is something any potential crypto fan owner should take into account.
Frequently Asked Questions On Cryptocurrency Fan Tokens
Binance Fan Tokens are utility tokens that are linked to brands, sports clubs, and celebrities that offer the token holders special fan advantages and rights.
Most of these cryptocurrency fan tokens are fungible, which implies that they can be exchanged for another similar fan token. In that, the crypto fan tokens are more similar to Ethereum or Bitcoin.
Juventus fan token is a cryptocurrency fan token issued by the Juventus Football Club.