The blockchain is disrupting many industries. For example, play-to-earn games like Gala and Decentraland are changing the giant online gaming industry. Similarly, decentralized finance (DeFi) platforms like Aave and Maker are disrupting the loan industry. In this article, we will look at the concept of fan token offerings (FTO), how it works, and then identify the top 4 FTOs to buy in 2022.
What are fan tokens and fan token offering?
Fan tokens are financial assets built using blockchain technology. They are built mostly by sports teams, celebrities, and even esports teams as they attempt to increase their engagements with their teams.
Basically, a fan token is similar to other cryptocurrencies like ETH and ADA in that you can use them to handle transactions. But as of now, their usage for transactions is a bit limited since it is a relatively smaller industry.
Fan token holders can be engaged with their sports teams in several ways. For example, they can vote on key changes that they want to see. They can even vote on various aspects of games like the game and player of the season.
A common misconception in the industry is the perception that fan tokens give holders a stake in the team. This is wrong. The only thing that can give you a stake in a team is being a shareholder. Today, some of the publicly traded teams that you can become a shareholder in are Manchester United, Juventus, and Borussia Dortmund.
Also, being a fan token holder does not mean that you can vote on key decisions by the team like the players to buy and sell. These decisions are usually handled internally by teams, which are highly centralized entities.
A fan token offering (FTO) can be compared to an Initial Public Offering (IPO) or an Initial Coin Offering (ICO). These offerings happen when a company is raising money by selling a stake to external shareholders.
For example, Avalanche sold AVAX tokens as a way of raising money for development. People who bought these tokens when they were issued have seen a strong performance considering that AVAX has a total market cap of $25.1 billion.
At the end of 2021, there were 56 fan tokens that had a total market capitalization of $56 million. The diluted market capitalization is $2.7 billion, making the industry a small one by most standards. For example, the broad cryptocurrency industry is valued at $2.5 trillion and has an excess of 11,000 coins.
Paris Saint-Germain (PSG)
Paris Saint-Germain is one of the leading soccer teams in the world. It has been a consistent winner in the biggest soccer league in France. It won in 2021 and was the second runners-up in the previous year. In the past eight years, the team has won eight times.
Paris Saint-Germain also won the 2019-2020 Champions League championship, which is the most prestigious in the soccer industry.
Such a performance is thanks to the strong team that includes some of the best players in the world. They include Lionel Messi, Kylian Mbappe, Sergio Ramos, Neymar Jr, and Angel Di Maria.
Paris Saint-Germain was among the first teams to launch their fan tokens. This token allows fans to make some decisions in the team, like naming the player of the year. It also gives them some discounts when they shop the team’s merchandise.
The token has a total market capitalization of $49 million. Its price has declined from a high of $56 in April to $15.2 in December. Still, it is a good investment if the industry does well in the future.
Juventus is a leading Spanish soccer team that has performed well over the years. The team currently stands at position 5 in the Spanish Premier League. It was position 4 in the previous season and won 2016-2017, 2017-2018, 2018-2019, and 2019-2020 seasons. It also won the previous seasons, making it the most dominant team in the country.
Juventus is also one of the few publicly-traded sports teams in the world. It has a total market capitalization of 878 million euros. Also, it has one of the best brands in the soccer industry.
Juventus launched its fan token offering in 2021 after it partnered with Chilliz. Chilliz runs one of the leading platforms for building fan tokens.
While Juventus is a leading sports team, its token has not done well. The JUV price has declined from an all-time high of $26 to $8.60. It has a market cap of $23 million, making it the 8th biggest in the world.
The English Premier League (EPL) is the best-known soccer league in the world. It has millions of fans on all continents, and its players are well-known.
Manchester United has grown from a small football club to become the most dominant team in the country. The team won the 2020-2021 season. It also won from 2017 to 2019 and the 2011-2013 seasons. This makes it one of the best-known clubs in the country.
Manchester United also launched its fan token in 2021. It has a market cap of $38 million, making it the third biggest. Still, like other fan tokens, the CITY token has declined since its launch, but it has a possibility of rising in 2022.
Barcelona is another well-known team in the soccer industry. The team has won the La Liga championship several times in the past few years. While the performance in 2021 was relatively weak, there is a possibility that the team will do well in 2022.
Barcelona also launched its fan token that has become a bit popular. It has a market capitalization of $32 million, making it the fourth-biggest token in the world. If the FT industry rebounds, the Barcelona Fan Token will also do well because of the overall popularity of the team.
This article has explored the exciting industry of fan tokens. It is an industry that is still in its infancy, meaning that it has room to grow. We have also highlighted some of the best teams to watch out for in 2022 if the industry rebounds.