Non-fungible tokens (NFTs) have grown in popularity since the launch of CryptoKitties in 2017, with the sector expected to move more than $800 billion in the next two years.
Some of the more well-known use cases for NFTs are image-proof projects, such as the Bored Ape Yacht Club, and play-to-win projects. NFTs have also attracted the attention of the sports industry, with professional sports leagues creating their own platforms for fans to engage with their favorite teams or players, but more on that later.
NFTs are unique, non-exchangeable pieces of code stored on the blockchain. These strings of alphanumeric code can be linked to assets such as artwork or digital and physical goods. NFTs are created through a process known as minting, and creators can set a limit on the number of NFTs they want to mint, creating a shortage.
Scarcity is a phenomenon that has always applied to physical goods because they are physically built with finite resources. However, scarcity has never existed with digital goods as they can be easily replicated. NFTs have changed this, and we are now seeing a growing market for collectibles in the digital world.
How are NFTs used to attract fans?
When it comes to sports, fans relate so much to their favorite players or teams that they interact with them in every possible way. Engagement ranges from watching or attending live games, purchasing merchandise, or attending signing events. Fans want to get closer to their favorite teams and players, which offers sports teams and leagues the opportunity to generate additional revenue.
Sports leagues, in particular, have realized the value of fan engagement and have created platforms where fans can buy, own and trade digital memorabilia. A well-known example is the National Basketball League’s NBA Top Shots NFT marketplace, where fans can buy, sell, and trade basketball video clips. The video clips on the platform are known as NBA Top Shot Moments, and each one showcases a different highlight from a basketball game. The marketplace launched in 2020 as a joint venture between the NBA and Dapper Labs, the creators of CryptoKitties. It generated more than 230 million dollars in sales within a year of its launch.
Some video clips are sold in packs, similar to physical trading cards like Pokémon and Yu-Gi-Oh. There is also an element of gamification with different levels of rarity, ranging from “common” to “legendary”, a standard system in RPGs. Rarer video clips are more likely to fetch a higher price than more common ones, increasing their perceived value as a collectible.
The NBA is not the only sports league creating its own engagement platforms. The National Football League and the National Hockey League are working on their own NFT platforms, while Major League Baseball has already launched its NFT marketplace.
Not only have sports leagues created fan engagement platforms, but the concept is proving very popular with non-sports league organizations entering the space. For example, Fanzee is a platform that has raised $2 million to build a marketplace and ecosystem where sports fans can complete challenges like contests and games to increase their fan level and exchange NFT collectibles.
Like NBA Top Shots, there is an element of gamification. In this case, sports clubs can create interactive challenges such as quizzes based on previous matches to check the degree of fan following. Additionally, fans can earn experience points and NFTs based on their interaction with the game. Experience points increase your “fan level”, which is displayed on a leaderboard, and fans earn awards based on their rank.
“Gamification is a great way to encourage engagement. Having a fun and exciting experience on the platform helps draw people in. But there has to be a story, even if it’s lighthearted like GoblinTown.” Max Luck, director of ecosystem growth at the interoperability-focused Flare network, told Cointelegraph, adding:
“NFTs are quite unique in that they help keep communities active and engaged, or ‘sticky,’ especially with the secondary markets that are emerging in different ecosystems and the potential for NFTs to be used in various gaming metaverses. It’s also a great opportunity for memes”.
How are fan acquisition platforms changing the sports industry?
Fan engagement platforms are bringing real-world industries like collectibles into the Web3 space. Non-fungible tokens are a great way to attract younger, tech-savvy users, adding modern ways for fans to interact with their favorite teams and players, while creating additional revenue streams for sports leagues.
Luck agrees that NFTs are a great way to get young fans engaged with their favorite teams and players: “NFTs are kind of marketing tools that have the power to attract newcomers to the game. This is especially true among younger fans, who have collectibles on their phones and can share their excitement and experiences with their friends at school or college.”
“Today, technology can drive discovery, whereas previous generations might have watched sports with their families at home or in the stadium and built their support there,” Luck continued. “The success of attracting newcomers would depend on how simple and easy platforms can make it for them to grab their first NFTs with an accessible UI/UX, and how prohibitive the costs are.”
Digital assets could have a significant effect on how close sports fans are to their favorite teams if used correctly. It will be easier for fans to keep up with the teams and athletes that matter most to them. Therefore, sports organizations have the opportunity to use digital assets to their advantage. It will not be surprising that most sports leagues will have their own NFT platforms where fans can interact with blockchain-based assets in the coming years.
However, the focus should be on fan engagement rather than trying to make a quick buck just by selling tokens. By focusing on fan engagement, these platforms may see increased adoption as fans will be more likely to introduce new users to the platforms. This will also improve user retention as fans will use these platforms for their personal enjoyment rather than trying to make money by rummaging through the tokens or digital assets they have purchased. If the bear market has taught us anything, speculating users always disappear when the market stops moving up.
Felix Le Breton, director of digital revenue at French esports organization Team Vitality, told Cointelegraph: “NFTs can be a good way to attract young fans, as long as they stay away from the speculative aspect. Obviously, the young generation She’s familiar with the principle of digital ownership and it’s easy for her to jump on board.”
Platforms that take a user-centric approach and focus on high engagement and user retention will be the most successful when it comes to fan engagement platforms, as well as improving the user education around NFTs, which will also help the sports industry enter the Web3 space. On average, 76% of avid sports fans around the world are open to learning more about NFTs, so there is an excellent opportunity for organizations in the sports industry to introduce blockchain-based assets to their consumers.
NFTs can change the world of sports by bringing offline activities to the online world. In the past, fans collected trading cards, signed jerseys and soccer balls, and traded printed photos of their favorite players. As the world becomes increasingly digital, younger fans will find new ways to engage with their favorite teams and players through blockchain technology.
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