Tokenization & Defi
by Fernando Sanchez
4 months ago
Sports betting is an eons-old practice. Tokenization in sports betting adds a new dimension, streamlining the process and enabling fans to interact with their heroes.
The Greeks were known to love sports betting, over seven full centuries before the birth of Christ – if you’re inclined to believe that sort of thing – when the Olympic Games were first held in 776 BC. Perhaps tokenization in sports betting can bring back some of the immediacy of those events.
Ancient Romans were the next civilization to openly raise stakes in sporting events. Citizens of the Republic enjoyed betting on the outcome of gladiatorial games. And records show that sports betting in Rome was a thriving industry, one that only began to decline in popularity as the Roman Empire itself started to crumble.
Fast forward a few centuries and stop the time clock circa 2014. It was a momentous year, for many reasons: Malaysian Airlines Flight MH370 vanished from the skies somewhere over the far reaches of the Indian Ocean. To date, no trace of the aircraft has ever been found. In the Middle East, ISIS began its reign of terror.
In the United States, the Dogecoin community raised almost 68 million coins (around US$ 55m at the time) to sponsor NASCAR driver Josh Wise. This was unprecedented, becoming the first instance of using a cryptocurrency to sponsor a participant in a major sporting event. Wise did not win the race, but Dogecoin (and cryptocurrencies as a whole) were openly discussed on air by commentators, which generated a lot of interest in the industry.
And in the same year, the Bitcoin St. Petersburg Bowl took place in the eponymous city in Florida. The game, which faced the NC State Wolfpack of the Atlantic Coast Conference off against the American Athletic Conference co-champion UCF Knights, was sponsored by online payment processor company Bitpay. In the field, the Wolfpack team won 34 to 27. In the world beyond the bleachers, Bitcoin (and by extension, cryptocurrencies) were the winners. Tokenization in sports betting took a huge leap forward.
What is a sports token?
The sporting industry as a whole soon realized the potential of crypto tokens as a means to facilitate transactions and create a thriving economy based around one of people’s favorite activities: Watching sports.
At its core, a sports token is an asset that enables the token holder to transact in a blockchain environment. These transactions range from purchasing a team shirt, betting on the outcome of sporting events or having a stake in fan-driven decisions.
But aside from the economic aspect, tokenization in sports betting offers another cool feature: The ability for the sports fan to interact with his or her favorite team, driver, or sports figure. Sports tokens hold great appeal because the fan feels closer to sporting personalities or organizations. By holding tokens, fans have a stake in influencing an outcome.
Tokenizing in sports betting: How and why
Tokenization can be defined as the process of substituting a sensitive data element with a non-sensitive equivalent, referred to as a token, that has no extrinsic or exploitable meaning or value.
But why do this? What advantages do tokens offer?
Lower transaction costs, transparency, enhanced liquidity, decentralization and increased efficiency, to name but a few. Tokenization in itself is a highly versatile feature that can be used to achieve a range of objectives, and this versatility stems from the fact that tokens are programmable, so they can be made unique. For example, tokens can be programmed to grant the holder access to exclusive content, custom merchandise or, very significantly, a stake in voting. Whatever the voting is for (naming the team’s new mascot, the color of the new season’s clothing, etc.) is irrelevant. The key is that token holders feel like they are part of something big and important, and they have a say in it.
So we see that the real advantage of sports tokens is fan engagement. A tokenized solution offers a handy bridge to span the gap between fans, players, and clubs/teams, creating an invaluable sense of community that leads to increased awareness and involvement. In short, the user experience is greatly enhanced.
From soccer to the NFL, NBA, and beyond: Sport tokens today
2014 now feels like an eternity away, and in terms of tokenized experiences in the sporting field, maybe it is.
Dogecoin and Josh Wise quite literally drove sports tokenization from niche obscurity to mainstream clarity, and the sporting industry has paid heed to the feat. Today, there are many ongoing tokenization sports projects, powered by blockchain technology.
In soccer, for example, FC Barcelona recently joined forces with sports and entertainment fan engagement platform Chiliz to create a token that will enable fans to interact with the club. When launched in Q2 this year, the “Barça Fan Token” will grant the holder voting rights through the tokenized voting platform socios.com, for example. Barça fans will also receive free Barça Tokens for engaging with the club and interacting with the socios.com platform, and will actually we able to purchase tokens through a process called Fan Token Offering (FTOTM).
Chiliz is also aiming to get a foothold in the United States by targeting the hugely popular National Football League (NFL). The startup has recently struck a partnership with marketing agency Lagardere Sports and Entertainment and presented the possibility of opening up socios.com to US-based teams and leagues, such as the NFL and the Major League Baseball (MLB).
If these partnerships succeed, the possibilities for sport tokenization are endless.
Sports tokenization has come a long way, but in a way, the industry is at the cusp of becoming a tidal wave of change. Chiliz’s onward march into the sporting field through socios.com is just one example of how blockchain initiatives can disrupt and transform sporting communities as we know them today, and step into the next stage of their natural evolution.
About Fernando Sanchez
I don’t need an alarm clock. My ideas wake me, said Ray Bradbury and, just as Mr. Bradbury’s mind teemed with ideas, Fernando often finds himself waking up to the otherworldly chimes that herald the arrival of a new story.
In between, he writes about blockchain, the crypto world, and the inherent power of decentralization to disrupt the long-standing status quo.
When Fernando is not honing his writing craft, he can be found at random locations wielding his trusty camera and indulging his passion to capture raw reality.