Scuderia Ferrari, the racing division of luxury car maker Ferrari, has joined the growing list of Formula 1 teams that have ended partnerships with their crypto sponsors. Ferrari terminated its multi-year partnership agreements with Velas Blockchain and chip-making giant Snapdragon, resulting in a cumulative loss of $55 million for the Italian team ahead of the 2023 season.
The partnership between Ferrari and Velas starting in 2021 – set at USD 30 million – was aimed at increasing fan engagement through non-fungible tokens (NFTs) and other sharing initiatives. However, the team breached the clauses that allow Velas to create NFT images, according to RacingNews365.
On November 2022, Mercedes also suffered a $15 million loss after discontinuing its partnership with FTX as the exchange filed for Chapter 11 Bankruptcy. Red Bull Racing’s partnership with the Tezos Foundation suffered a similar fate, as the blockchain company decided not to renew their agreement citing a strategic mismatch.
Toto Wolff, team principal and CEO of the Mercedes-AMG Petronas F1 Team, warned that other teams could find themselves in a similar situation. However, the relationship between F1 and the cryptocurrency ecosystem goes beyond partnerships. In October 2022, Formula 1 registered the “F1” trademarks while revealing its plans to create an online marketplace for cryptocurrencies, digital tokens, digital collectibles, crypto-collectibles, and NFTs.
In the midst of a bear market, Web 3.0 projects have taken the lead in reinforcing engagement between fans and sports leagues.
Deloitte’s “2022 Sports Industry Outlook” report predicted an acceleration in the blending of the real and digital worlds, along with growing markets for NFTs and immersive technologies. As Cointelegraph reported, the lack of user-friendly platforms is positioned as the biggest challenge for mass adoption.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.