Sports NFTs are a kind of virtual collectable card that can be tracked using immutable blockchain technology to validate its authenticity. Digital collectable cards and other game souvenirs can be created using these tools by clubs and teams, as well as by the athletes themselves. Although NFTs have only just begun to take root in the sports industry, their enormous potential is obvious.
Most sponsorships in sports come from bitcoin exchanges and payment companies, indicating an emerging close connection between the sports industry and the adoption of cryptocurrency. Last year, the Oakland Athletics offered private boxes for an entire season for one bitcoin, the first sports franchise to accept cryptocurrency for tickets. Crypto.com's acquisition of the naming rights to the legendary Staples Center arena is another prime example.
NBA Top Shot has become one of the most successful companies using NFT through its participation in the digital collectable card platform. The FLOW blockchain-based project allows members to trade, buy and sell NBA "moments" stored in digital wallets. In May of this year, the site had more than a million registered users. In April, a rare LeBron James moment was sold on the Top Shot secondary market for $387,600.
The cryptocurrency, known as "fan tokens," can be used to gain access to club prizes and benefits. They are all built on blockchain. Tokens are a great way to thank members for their loyalty to the club by giving them access to exclusive content, merchandise or events. Companies often offer digital images or videos in the form of NFTs that can be exchanged like an online delivery card.
Genuine videos are stored in a blockchain, an open transaction log, making them difficult to counterfeit. In Europe, the growing popularity of NFT has touched soccer as well. Several major European soccer clubs, notably Real Madrid and AC Milan, have signed licensing agreements with the fantasy soccer game Sorare. In the game, users take on the role of NFT soccer managers, combining virtual teams on the Ethereum network. As in regular fantasy soccer, teams are rated based on their players' performance on the field.
Blockchain-based technologies can unlock the full hidden potential of sports marketing and provide additional opportunities. Blockchain and the fan club concept have created a new paradigm in the crypto-economy, but they also face a number of challenges, such as informing the public about the technology and complying with tax laws.
Fortunately, thanks to successful trials of sports memorabilia, game tickets and cybersports, digital assets are quickly adapting to the sports ecosystem. The aforementioned NBA Top Shot project is an example of a story that has done well since the NFT hype. Since its release in the fourth quarter of 2020, sales have remained steady.
Sponsorship activity within the sport is expected to be worth about $90 billion a year by 2027. Against this backdrop, cryptocurrencies and blockchain technology are expected to become more popular in the sports business in the coming years.