Sports and Blockchain: How Web3 Is Helping Franchises Find New Success
From NFTs (non-fungible tokens) of trading cards to virtual pre-game events, sports and blockchain projects have become natural partners in the past few years. Sports franchises have much to gain from Web3, including unprecedented revenue and fan engagement opportunities, and sports blockchain companies are eager to help. Here’s how some sports teams are using blockchain technology to reach new markets.
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Want to learn more about the intersection of sports and blockchain, or maybe you're ready to turn this technology to your advantage? Read our guide, How to Win With Blockchain Technology in Sports.
Sports and blockchain technology: a perfect match
What does blockchain, a public digital ledger used to record transactions and store data, have to do with sports? Turns out there are as many applications for blockchain in sports as there are use cases for the technology itself. Sports franchises are using blockchain to mint NFTs of replays, players, trading cards, and game tickets to generate revenue and stay top-of-mind with fans. They’re also trying out new virtual reality experiences and tying NFT sales to real-life perks. Let’s take a look at a few use cases of blockchain sports projects.
Minting and selling collectible NFTs is a natural pivot for sports franchises since they are already well-versed in the world of trading cards, sports jerseys, and other memorabilia. Offering NFTs to fans is simply an extension of that world into Web3. Sports teams can choose to create original NFTs, like video clips of replays or digital art (à la the Kobe Bryant art collection), or they can tap into a secondary market for existing collectibles by minting physical-backed NFTs.
Some sports franchises are even choosing to fractionalize their physical-backed NFTs, allowing fans to own a part of the physical item, not dissimilar to owning shares of a company. This strategy makes NFTs accessible to more fans and generates more revenue for sports franchises because they earn a royalty fee on every transaction.
Virtual access tokens
Sports franchises can combine NFT purchases with access to virtual pre-game events, interviews with favorite players, and even virtual access to games for fans who couldn’t make it IRL. They can also sell NFT tokens that act as virtual tickets for special experiences. Aside from generating revenue, virtual events are a great way to stay in touch with fans worldwide and keep them engaged during the off-season (for example, by offering virtual tours of locker rooms, or special access to practices).
Some companies, like Fan Controlled Sports and Entertainment, let fans call plays and make key strategy decisions during live games filmed in high-tech studios. The sky is more or less the limit for enterprising sports teams who want to connect with fans in Web3.
Blockchain and NFTs also have a part to play in fantasy leagues. A few major leagues, including the NBA, already partnered with Sorare, a fantasy league company that runs on blockchain. Fans can create dream rosters with NFTs of their favorite players, add to their collection by trading cards with other fans, and engage with each other. Aside from revenue generated through licensing deals, this is yet another opportunity for sports franchises to expand their brand.
Sports franchises are finding success on the blockchain
Many sports teams, including the NBA and the NFL, are already making huge strides in Web3. Let’s take a look at a few success stories in sports and blockchain.
NBA Top Shot
NBA Top Shot is the NBA's official NFT marketplace for clips of replay-worthy moments. The NBA partnered with Dapper Labs in 2020 to create and run the marketplace on Flow blockchain. As of this writing, NBA Top Shot has over a million active users.
Topps, a premier trading card company, launched Topps NFTs in 2021. A classic sports collectible, the trading card has a new life in the digital world. And if the sale of Mickey Mantle’s baseball card for $451K at an OpenSea auction is any indication, the NFT collectible market is promising.
WWE Moonsault is the official WWE NFT marketplace. Aside from NFTs of key moments, the marketplace also offers fans an opportunity to connect with each other, as well as buy and sell tokens. WWE is also working on launching interactive virtual experiences for NFT holders.
Some all-star blockchain partners for sports franchises
The use case for blockchain in sports is easy to grasp, but the underlying technology is complex. Minting NFTs is a technical process, which is why many sports teams are choosing to partner with blockchain companies to achieve their revenue and engagement goals. Here’s a list of some sports blockchain companies at the top of their game.
OpenSea launched in 2017 and is now the largest NFT marketplace in the world, with around 1.8 million active users. You can find NFTs of pretty much anything on OpenSea, from art to collectible bottle caps. Sports teams can use the platform’s minting service without paying “gas fees” until someone buys an NFT and the initial sale is complete. OpenSea also has a partnership program that pairs brands with NFT experts to help them make the most of the platform.
Socios was one of the first companies to recognize the power of combining sports and blockchain technology. They run a marketplace for “Fan Tokens,” an NFT that gives owners a vote in jersey designs or food options at games. Socio also provides an app for fans to manage their NFT collections, buy and sell tokens, and participate in communities around their favorite sports teams. In other words, fan engagement is their game.
Dibbs specializes in physical-backed NFTs — NFTs of real objects, like trading cards or jerseys. Here’s how it works: Our partners send us a collectible, an expert third party verifies it, and then it goes into a temperature-controlled vault. Dibbs then mints an NFT based on the physical collectible to represent ownership and drops it on any marketplace for sports fans to buy and sell. The original NFT creators earn a royalty fee with every sale of the NFT and can track their earnings through our dashboard. Put simply, Dibbs gives physical collectibles a secondary market.
If you want to learn more about how we work with sports collectibles, schedule a demo today.
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