Will blockchain-powered innovations extend beyond the scope of NFT sports collectibles?
Deloitte says yes, in a new report (PDF).
Besides in-game NFTs, sports NFTs and fan tokens have huge potential and growth opportunities in the coming years.
Deloitte highlighted the continued digitization of sports and the role of sports NFTs in promoting the merging of the physical and virtual worlds in its April report “2022 Sports Industry Outlook”.
NFT and Fan Tokens to create a utility
NFTs and sports-related fan tokens are inevitable as the NFT economy grows. The sole purpose of these digital tokens is to engage fan communities first. They provide a more efficient means of support and connection between sports teams and their supporter networks.
NFTs are still in their early stages of development in the sports industry, but their limitless potential is evident.
Businesses sometimes involve selling digital photos or videos as NFTs, such as historical play, milestones or iconic moments, allowing customers to redeem them like an online version of a delivery card.
Unlike regular videos, which are easily copied, NFTs are stored on a blockchain, a publicly shared ledger of transactions that certifies their authenticity.
More uses are out there
In developed projects, the combination of fan tokens, NFTs and collectibles has increased.
Despite the recent fall in the global crypto market in May, a few football club fan tokens, such as Paris Saint-Germain fan tokens and Manchester City fan tokens, saw significant increases.
The fact that the season is coming to an end has motivated him. Fan Tokens and NFTs are symbolic assets, memorabilia or sports collectibles in the eyes of fans.
According to Deloitte, blockchain-based technologies have the ability to unleash all the latent potential and additional opportunities in the future.
“A bond will form around sports collectibles, ticketing, betting and gaming. We are just beginning to see her [cryptocurrency’s] potential, as well as the new markets to which it could lead”, the report described.
Virtual currencies not only promote engagement between teams and fans around the world, but they can also be used to run promotions, contests and reward fans.
Rewards and more
According to the report, the future development of smart contracts could lead to “split ownership of subscriptions and suites, as well as a reinvention of the ticket resale process.”
Season Ticket Membership is an important use case for NFTs and Fan Tokens that enhances the experience of an engaged fan.
It grants access to additional unique gear, stadium experiences and limited edition memorabilia for games, as well as any other bonuses. Virtual tokens can also give holders access to additional behind-the-scenes perks, such as player cameras or even a virtual locker room.
Moreover, the development of dynamic NFTs supported by smart contracts promises to expand the use cases of NFTs in the sports sector.
Developments and Obstacles
Although the combination of blockchain and the fan club model has established a new paradigm in the crypto economy, it also faces a number of obstacles, such as standard implementation, fan education and tax compliance.
On the bright side, digital assets are rapidly being integrated into the sports ecosystem with successful experiments on sports collectibles, game tickets and esports.
NBA Top Shot is an example of success stories around the NFT hype. Since its launch in Q4/2020, sales have remained stable over time.
Dapper Labs, the owner of the project, continues to secure contracts to bring official NFT collectibles for major sports leagues like the NFL, UFC as well as many other famous athletes.
Non-fungible tokens can fundamentally change the way fans interact with sports and their favorite teams.
The formation of Metaverse, driven by NFTs, digital assets and wearables, has created a crossover between the physical and virtual worlds.
Deloitte said in the report that the sports-related NFT opportunity could be worth $2 billion in 2022.