What are fan tokens? How does it work?
The interest in cryptocurrency trading in India is at a never seen before level, and the blockchains have introduced a series of new opportunities for users of various industries. The latest cryptocurrency of the sports and entertainment industry Chiliz crypto or “Fan token” is creating quite a buzz in the market. In this article, we are going to discuss what a fan token is and how it works. Read on to find more:
What are Fan Tokens?
These can be defined as utility cryptographic branded tokens carrying the name/mark of the team or sports organization to which they relate. Essentially, a fan token is a cryptocurrency that grants holders access to various sports club-related benefits.
The term fan token was first mentioned by Chiliz in the white paper to introduce the socios platform, a social media platform for fans to connect with their favourite team/club.
Chiliz is the leading blockchain provider for sports and entertainment; they have even developed as a social platform for teams to connect with their fans. Chiliz or CHZ Crypto is the native utility token that is traded on Ethereum Blockchain, and it serves as a digital currency for chiliz and socios platform.
How do they work?
Unlike NFTs, Fan tokens are fungible in nature and can also be used like FIAT currency; they can be exchanged for club merchandise, match tickets, VIP experience or anything else. Fans can purchase them like other cryptocurrencies and trade them. At the time of the trading, the initial price is set by the seller, and it is subject to change on demand and supply of the token based on popularity. The unique perk that incites the user to be an active participant in the voting right.
Once a user has collected a specific number of tokens, they are granted special rights to vote and influence the club decisions like deciding the club merchandise, team uniform or even match locations. Sports organizations can crowd manage their fan base using these tokens. These tokens give the chance to passive users to be active influencers based on the number of tokens they hold. In that sense, they can be seen analogous to holding an equity share that gives the shareholder the right to vote in the AGM of the company.
The concept has been there in blockchain space for a long time, but the recent covid pandemic made the sporting bodies seek alternative sources of revenue and several Fan tokens were launched.
Chiliz Cryptocurrency can be considered a harbinger in the story of fan tokens as once the fans join the socios platform, the club owners host an FTO (first token offering). FTO is where the tokens are offered to the fans at issue price before they reach the marketplace. To participate in FTOs the users need CHZ Coin. The socios platform where fans can participate in online polls is activated by chiliz coins. The most prominent and liquid Fan token in the world is CHZ and the current Chiliz price is $ 0.461738 or 34.39 INR. So if you follow a sport passionately and want to become an influencer in decision making, along with capital gains, don’t wait, log on to Zebpay and check if your favourite team has come up with a Fan token.