This article is not easy to talk about, it comes with great risks. A topic very few are brave enough to cover because of the pressure from the top. But somebody has to unearth what’s happening right in front of everyone. Currently, all the big clubs not just in football but other sports as well have joined in creating fan tokens because of the money involved which is too good to be turned down. In a competitive sport that extra revenue can make a big difference and because of fear of missing out many clubs have joined in something which is unregulated.
What are Fan Tokens?
A digital cryptocurrency that helps the clubs make stronger fan involvement. Yes, that’s what it is advertised as. Now if you are a die-hard fan buying a digital fan token of your favorite football club can give you benefits such as exclusive club content, making decisions like halftime song in the stadium, choosing the man of the match.
𝕎𝕖 𝕞𝕒𝕕𝕖 𝕙𝕚𝕤𝕥𝕠𝕣𝕪, 𝕥𝕠𝕘𝕖𝕥𝕙𝕖𝕣.
Starting today, every @juventusfc goal scored at the Allianz Stadium will be celebrated to the tune of Song 2, as chosen by you on the https://t.co/2FROhSNgw8 app. #BenvenutaSong2 pic.twitter.com/jNlR1zMl13
— Socios.com (@socios) January 6, 2020
But control, it isn’t exactly what it is advertised as.
Socios Fan Token is one of the major players in fan token in the Premier League, clubs like Arsenal, Manchester City, Aston Villa, Crystal Palace, and more have partnered with Socios in creating Fan Tokens. It is a one way bet for them. These are multi-million deals which are very hard for the clubs to turn down. Even UEFA have joined Socios – an organisation that has been recently criticised for corruption. Everybody is looking at ways to make that extra revenue but at what expense?
The Real Game Of Pump & Dump
Before a token goes live in the market an offering round is conducted at a fixed price. In this round, the rich traders take part because a lot of capital is required.
Then begins the real pumping game – A lot of fuss is created about the token on social platforms of the clubs. A hype is created among the fans.
Introducing official Arsenal fan tokens, created by our new global partner @socios 👇
— Arsenal (@Arsenal) July 19, 2021
To buy these tokens you have to use Socios own cryptocurrency, Chiliz. The prices of the cryptocurrency highly fluctuates which are not related to football.
Analysis of 40 football fan tokens
📉 18 peaked in market cap within the first two weeks after entering the market
📉 #FCBarcelona token has seen biggest dropFull analysis of #Tokens 👇https://t.co/gq5M2pJdte pic.twitter.com/oyVCw16dtx
— Off The Pitch (@OffThePitch_com) February 18, 2022
As per the data above these fan tokens are pumped in the early days of the launch in the market because of which the prices rise significantly. After which a massive drop in the market capital is seen as the big traders start booking profits leaving the fans and late buyers the real losers here. Currently almost all of these tokens are trading at much lesser price than they were listed at.
Socios advertises itself as a fan engagement platform but in reality its monetization model is to gain customers for their cryptocurrency in the name of fan engagement.
Most of the users are not even fans of the club…
In Summary,
The problem with Fan Tokens pic.twitter.com/8VQDOldJGF
— Arsenal FC Lovers (@afclovers_) February 19, 2022
This article wouldn’t be possible without the work of Joey D’urso & Martin Calladine
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