Web3 infrastructure and professional athletics never appeared to be a match in the early days of crypto, but they’ve proven to be a match made in heaven. It began as a niche interest in digital collectibles, hosted on the sports blockchain, but has since turned into a robust infrastructure that is changing how sports franchises operate and how fanbases interact with their favorite teams.
Active engagement
The primary value proposition of decentralized platforms for a sports club is that it can turn passive spectators into active participants – this is the start of a journey in turning a casual supporter (an American who tries to catch some Arsenal games) into an avid support (closely follows Saka on Instagram, buys the home shirt every year and dream of flying to London to watch a game in person).
Even still, that version of events is fairly passive and one-directional. The next step is actually letting that fan to vote on club decisions, both large and small, and begin a journey into digital collectible assets, building up loyalty points, and being an active participant.
The likes of FC Barcelona have utilized blockchain-based platforms to decentralize certain minor decision-making processes, proving it’s being adopted by world-leading clubs. Using tokens issued on the Chiliz blockchain, fans have voted on everything from stadium mural designs to match-day music. But getting more digital tokens may lead to winning real, tangible assets, like a signed shirt. Again, it’s fairly low cost for the club.
In fact, the club needn’t even give anything away other than it’s governance over the finer details, like player awards. It’s about moving from a static CRM model towards a proof-of-loyalty system, which opens the door to innumerable ways to reward said loyalty.
Infrastructure optimized for sports economies
On the technical side, the industry is using specialized Layer-1 solutions because environments like EVM-compatible Chiliz Chain are architected to handle the high-frequency transaction loads. They have a Proof-of-Staked-Authority consensus mechanism, so the networks have the necessary throughput and lower latency needed for trading.
By isolating sports traffic on dedicated chains, developers can make sure sudden minting surges do not lead to the prohibitive gas fee spikes.
This sports blockchain ecosystem also allows the tokenization of real assets, and it could be a gateway into better ticketing (transparent, fewer fees, fewer intermediaries, preventing scalping, prioritizing the biggest fans).
Media rights and stadium equity are being fractionalized too. Smart contracts can automate the distribution of broadcast revenues or verify the authenticity of memorabilia through immutable digital certificates – it can combat a counterfeit trade that the OECD and EUIPO estimate at hundreds of billions of dollars around the world. So when a fan buys a signed boot on the secondary market, it’s the blockchain proof of origin that makes them rest easy at night knowing it’s real – no need to pay for an unreliable verifier.
Blockchain-based ticketing systems have been trialed by organizations like UEFA already, which successfully distributed over 110,000 tickets for the 2019 Nations League by using non-fungible tokens. But looking at it the other way around, many clubs have been saved from administration by fans, and this crowdfunding ability could easily save many more to keep smaller, local teams alive.