Here is everything you need to know about fan tokens

The ongoing FIFA World Cup has reinvigorated interest, buzz and attention on a section of cryptocurrencies known as fan tokens. Although they’ve been in existence for quite a long time, the ongoing Mundial in Qatar is spotlighting many soccer-linked tokens due to upward/downward moves connected with the associated team’s performance at the event. 

In this week’s episode of crypto explainer, we are going to discuss what these tokens are, their benefits and how you can take advantage of any than can find.

Here we go:

What is a Fan token?

Fan tokens are like Non Fungible Tokens (NFTs) but with a difference.

It is a digital asset on a blockchain that is designed to change the dynamics of a sporting team and fan relationships. In other words, the token offers an opportunity for fans to be more involved in the team through membership benefits that span from exclusive access to content, experiences, prizes, or votes on club decisions. 

While NFTs give ownership rights by virtue of digital copyright that cannot be exchanged, fan tokens, on the other hand, are completely interchangeable. In simpler terms, it means that fan tokens can be easily exchanged for available products or services of the enterprise (teams) behind them. 

Fan tokens are similar to shares in a corporation and similar to how governance tokens allow holders in Decentralised Autonomous Organisations (DAOs) to vote.

The more tokens a user possesses the greater influence that user enjoys over decision-making. In fact, some teams restrict voting eligibility and other perks until a user holds a certain amount of tokens.

Several popular football teams like Brazil, Portugal, Argentina, Spain, Manchester City, Barcelona, Juventus, PSG and many others have had fans tokens launched for their followers.

Fan tokens aren’t exclusive to the sporting sector. They are a number of similar tokens in the entire entertainment industry. These include tokens specifically named after bands and pop stars. As of now, there are over 50 fan tokens listed on Coinmarketcap, and the list will continue to grow.

Basically, fan tokens create an exclusive community of the most dedicated fans. 

Related post: DAOs: All you need to know and why you should join one

How fan tokens work

Once users gain access to a set amount of fan tokens, they are granted the right to vote on a variety of matters concerning their favourite club.

They include:

• Voting on club polls – i.e. choosing welcome songs, messages, or colours on jerseys.
• Exclusive access to meet-and-greet events with club players.
• Discounts on club merchandise and players’ autographs.
• Access to training sessions directly on the field.
• Free access to the stadium on matchdays
• The ability to pay for match tickets with the token and/or get discounts on match tickets.
• Potential access to NFTs that the club might release for fan token holders.

These perks allow fans to feel involved in the club they already support, and they add an extra level of pride and prestige as their fan tokens will likely increase in value as the club grows over time. 

Fans can purchase these digital tokens and trade them like other cryptocurrencies. The price is usually determined by the number of people who want them, the market movement and how popular the token is at the time.

How to buy fan tokens

You need to purchase $CHZ via a crypto exchange in order to acquire fan tokens that exist on the Chiliz network. However, there are fan tokens that exist outside of Chiliz and their Socios associate website.

Some fan tokens are available on popular centralised exchanges, but some may not be certified or large enough to be listed yet.

In cases like that, fan tokens could only be available for trading or swapping on decentralised exchanges like PancakeSwap and SushiSwap.

Read also: All you need to know about Proof of Reserve (PoR)

Please note:

It is important to be careful before you buy because cryptocurrencies are a high-risk investment. Fan tokens may be less of an investment and more of a buy-in to the special benefits that sports clubs can provide. 

However, great risk can always mean great reward as some fan coins may skyrocket in price if they catch on and become even more popular as we have seen with some in the ongoing FIFA World Cup.