Onboarding Notes: Fan Tokens

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With all the hype around the World Cup, you might've heard of fan tokens and how they are performing well during this time of the year.

But what exactly are fan tokens? Why would anyone want to buy and hold these tokens? Are they just yet another ponzi scam, or is there some promise behind it?

Here’s my take on fan tokens, explained simply.

What exactly are fan tokens?

Fan tokens are tokens powered by blockchain, designed to provide membership benefits to fandoms of sports teams, bands and other groups. 

These tokens can play a key role in engaging the club’s fanbase with a new team-branded piece of fandom. 

You can see this as a membership program to social status, unique experiences, turning a typical passive fan experience into an active one.

What's the appeal of fan tokens?

Most fans of sports teams and music bands are not actually in the physical proximity of the clubs they are supporting.

As such, fans usually express their support in a more passive manner, such as watching matches online, buying merchandise, etc.

Fan tokens allow for fans to enjoy specialised perks and actually have a social influence on non-business related matters for the club.

For example, holders of fan tokens could vote on a team’s new logo, designs on team-branded merchandise, stadium music and more.

They can also stand a chance to win unique VIP experiences, such as meet and greets, private team events and more.

For avid fans of their respective clubs, this is a novel way to express their loyalty while giving them an opportunity to influence the club directly, albeit in a smaller way.

Why are fan tokens exciting for clubs and businesses?

To me, the fascinating aspect of fan tokens is how it is very much a Web 2.5 play.

There are many partnerships needed with Web2 companies: be it the sports clubs themselves, their sponsors, and others.

Why then would these Web2 companies be interested in launching fan tokens?

It’s simple: Additional revenue streams.

Take sports clubs for example. Traditionally, they have their key revenue streams from tickets and merchandise, selling of broadcasting rights to media networks, and brand sponsorships.

Fan tokens allow them an additional way to earn from minting, trading fees and other value accrual mechanisms.

They also offer an enhanced mechanism to engage with fans all over the world, increasing brand awareness and fan loyalty.

Putting the two benefits together, clubs that effectively leverage on fan tokens can gain a strong competitive advantage against their peers.

What are their future developments?

You might find that the utilities and use cases for fan tokens now to be rather trivial, and that might not be wrong.

There is definitely a lot more room for fan tokens to develop and to build better product-market fit.

That being said, an aspect that companies working on fan tokens are focusing on is product innovation.

They will need to figure out ways to improve the utility of fan tokens, and be able to scale it in a global manner that token holders can enjoy and feel proud of.

Exclusive virtual locker-room access for fans who ‘stake’ a number of fan tokens? Personalised messages for top fans that refer their friends? Count me in, and I’m shouting this out to everyone around me.

Another aspect that fan tokens will have to build on is user education and legitimacy. 

This idea of fan tokens with the use of blockchain is novel to many fans who are new to blockchain. Time is certainly needed to educate about its use cases and to prove legitimacy, especially for non-crypto native audiences.

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