The potential of Sports and Web 3.0

Nowadays, professional sport teams are actively issuing NFTs and tokens (crypto assets). Why is "Sports x Web 3.0" attracting attention now? We will consider its possibilities and challenges.

A: Today, I would like to talk about the efforts of the sports industry in Web 3.0. Web 3.0 is a term that is widely used to refer to various blockchain-based technologies and mechanisms.

Specifically, digital assets such as tokens (also known as crypto assets, strictly speaking, fungible tokens) and NFTs are examples of this. In the sports industry, teams have been issuing tokens and NFTs more and more in recent years.

B: That's right. For example, among soccer teams, FC Ryukyu, a member of the J3 League, made headlines when it sold FCR coins and raised a total of 1 billion yen, and Sagan Tosu has also issued NFTs for fans. In addition, many teams in various professional sports, both domestic and international, are selling tokens and NFTs.

However, I don't know much about Web 3.0, so I don't really understand why something called Web 3.0 is becoming so popular in the sports industry. This may be a very rude thing to say, but I even feel that sports are being caught up in tokens and NFTs, which somehow have a "smell of money".

A: I understand why people have such concerns, and it is true that NFTs and tokens are very useful in terms of money, or in other words, monetization. However, the combination of sports and Web 3.0 is considered to be a very good match in every sense, including that aspect.

B: What do you mean?

A: Sports are "content," have "fan passion," and have a "fan and team community." Moreover, these are not temporary, but continue for a long time. These keywords have a very high affinity with NFTs and tokens.

What is the difference between NFTs and tokens?

B: I know it's a little late to ask, but what is the difference between NFTs and tokens?

A: Tokens have characteristics similar to currency, and are called "fungible tokens" in the Web 3.0 industry. In short, they are crypto assets, and like currency, there are no differences between them, and they all represent the same value. For example, 1 FCR coin has the same value as another 1 FCR coin at any time and can be exchanged.

On the other hand, NFTs are called "non-fungible tokens" and have the characteristic that each one is unique, like a physical work of art. If we give a similar example in the sports industry, it would be something that cannot be replaced with another, such as a "fan club membership card with a membership number" or a "uniform signed by a player."

B: I see. What are the benefits of bringing them into the sports industry?

A: First, let's take NFTs as an example. NFTs are a technology that started to become popular around 2021, and initially NFT art, that is, digital images turned into NFTs, became very popular and spread. Before that, digital images could be copied infinitely by anyone, so there was no "sole owner."

However, with the birth of NFT technology, the value of "owning" digital images, like owning a painting by Monet or Van Gogh, spread. However, while NFT digital art was born one after another, the boom gradually passed and the price of many NFTs plummeted.

B: Why is that?

A: It's a very simple reason, but the question arose: "Do I want to own that digital art in the first place?" There are many people who want to own works by famous painters like Monet and Van Gogh, but few people see value in images painted by people they don't even know.

Therefore, the NFT industry began to place importance on the concept of "utility," which means practicality. What benefits will you get if you own that NFT? How can you use it? Why do people want to buy that NFT? We are looking for answers to these questions.

I think sports will be one of the answers.

B: What do you mean?

A: In fact, the pioneer of the digital art-centered NFT boom was the digital card game "NBA Top Shot" by the NBA (American professional basketball league). The project sold players' highlight videos called "Moments" as digital NFT cards, and more than $200 million was traded in the three months after its release.

Earlier, I asked the question, "Why do people want to buy NFTs?" If it's a video of an NBA player, the reason is obvious. For fans, it must be a great joy to be able to own their favorite player's best play as "their own".

Compared to digital images that have no use, there is a reason to pay money to get it. Also, people who have limited items such as "limited edition uniforms signed by players" are respected by fans and players, right?

B: For players, it's "the person who bought that," and it's an object of respect for fellow fans.

A: It's easy to understand if you think of NFTs as something similar that can be achieved with digital content. You say that NFTs make it possible digitally to achieve things that could only be achieved with physical objects until now.

Unlike physical objects, NFTs are not subject to physical restrictions such as transportation, and they have the advantage of being easily sold and traded with other people.

Why are tokens so compatible with sports?

B: I see. So why do tokens have such a strong affinity with sports?

A: Tokens are something that anyone can issue, and they are an invention that allows you to create your own economic zone. Until now, economic zones were only available in large areas such as Japan or the United States, but with tokens, anyone can create one.

It is also important that by issuing and selling tokens, you can raise funds directly from people who share the same goals as the issuer and from people who support you.

B: That is exactly what FC Ryukyu is doing.

A: Of course, going to games and buying merchandise are great ways to support your local team. In addition, you can now directly support the team by purchasing tokens.

B: Is it a new way of supporting the team?

A: And that's not all. Tokens have monetary value, so if the price goes up, those who buy them will ultimately benefit. The mechanism by which the price of tokens goes up is very complicated, so I will explain it simply, but in short, the price goes up if more people want to buy the token.

Most fan tokens come with perks like invitations to games, special experiences, and free merchandise, so if a team gets stronger and more popular, more people will want to buy them. I think the desire to see a team get stronger and do well is at the root of people who support sports.

Even without tokens, sports is an industry where a community that works together toward a common goal already exists. You could say that tokens add an extra alpha to that by increasing the value of the assets you own.

B: To put it nicely, by using NFTs and tokens, you increase the number of ways to support teams and players, and the joy of supporting them increases.

A: Yes. It's also true that they "smell like money." By using tokens and NFTs, which are so-called "popular mechanisms," you can get not only fans but also people like investors involved.

Rather than simply saying, "I want to strengthen my team, so I'm going to do crowdfunding," you should be able to gather support from more people by saying, "I'm going to issue a token."

Moreover, since issuing tokens is a hot topic in itself, it actually helps to increase the awareness of the team. In fact, investors who purchase fan tokens sometimes end up becoming fans of the team they've been playing for.

Another attraction is that players can use tokens and NFTs as a way to monetize their activities and expenses. In fact, there are cases where players sell their own NFTs to solicit support directly from fans.

B: In minor sports, it's not uncommon for players to struggle to even cover their activities. For people who want to support a team but don't know how to do it, buying NFTs or tokens could be an easy way to do so.

Diversifying forms of support

A: Up until now, we have mainly talked about monetization, but NFTs and tokens have the aspect of boosting fan culture and fan communities through these.

For example, there are many fans who think, "If I were the manager, I would use this player!" "I wish the stadium was more like this" or "I want to hold an event to liven up the local games."

There is also a culture where fans talk about team strategies with each other on social media. I think this is not just about "enjoying watching sports," but also about wanting to support and participate in the team more deeply.

B: I do think that the ways of supporting have become more diverse than in the past.

A: As a way to realize such passionate feelings of fans, there is also a movement to have token holders vote on important decisions related to team management. As a privilege for NFT and token holders, they are given the right to "be more involved with the team."

This is close to the idea of ​​a mechanism called DAO (decentralized autonomous organization) in the Web 3.0 industry. DAO is a mechanism that allows stakeholders to autonomously take action toward the development of an organization through tokens.

B: When you hear it like that, it seems that the team's goals of raising funds and raising awareness for the team are aligned with the interests of fans who want to support the team and players and get more involved.

A: That's right. Also, as a further development of fan culture, "Sports x Web 3.0" is progressing in the world of sports betting. Sports betting is basically sports betting.

In Japan, it is illegal except for so-called public gambling and sports lotteries, so it is not very popular, but overseas, services that combine sports betting with tokens and NFTs are also popular.

A representative example of this is "SORARE". SORARE is classified as a blockchain game (a game that uses blockchain technology), but the content is betting on professional soccer.

Like a simulation game, if you hold the NFTs of players and organize a team, you will receive crypto assets depending on how well the players perform in actual games. This type of game is actually called fantasy sports, and it has been a popular part of culture among fans for a long time.

Projects like SORARE use NFTs and crypto assets to make it easier for people all over the world to participate, wherever they are.

It seems like it's still a long way off before sports betting is legalized in Japan, but many countries, especially in Europe, have already lifted the ban, so it is expected to become more widespread as part of the sports x Web 3.0 combination.

In reality, there aren't that many success stories.

B: Is Sports x Web3 actually a success? I see it being talked about from time to time, but I don't feel like it's been fully accepted by the sports industry or fans yet.

A: Objectively speaking, there aren't many success stories. There are cases like FC Ryukyu, which I mentioned earlier, where a single club team raised an unusual amount of money for fundraising, and NBA Top Shot and SORARE are still going strong.

However, there are many that are more appropriate to consider as failures at the moment.

In Japan, there was a service called "Pacific League Exciting Moments" that was like a Pacific League version of NBA Top Shot, but unfortunately the service ended in 2023. Also, many of the NFTs sold by players and teams have not sold well, or are in a state where they have no price because there are no buyers.

FCR coins are also a great success for the teams, but not for the buyers. For now, they have fallen significantly from the price at which they were sold.

B: I'm a sports fan myself, so I can imagine that even if people say "it's a fan token" or "it's an NFT," there are probably many people who don't really understand what it is and don't see any value in it.

A: You're right. For example, if you're going to pay the same 3,000 yen, there are probably many more people who would rather buy a physical item and keep it with them than an NFT.

To be honest, the concept of "unique digital data" has not yet spread widely, and it's not clear whether people will see value in such things. In this regard, it may take time for NFTs themselves to become more widespread, rather than just sports x Web 3.0.

There is also the question of "what kind of benefits will you get if you have that NFT?" In some cases, there are attractive benefits such as "invitations to special seats at games" or "the ability to communicate with players."

B: Those benefits can be achieved without making it an NFT, right?

A: You're right. As for tokens, I also feel that their usefulness is not very clear at the moment, apart from their speculative appeal.

B: I think they will not become widespread unless there is something that can only be done with NFTs or tokens, or something that can be created with value.

A: I think that using NFTs to support athletes, which we mentioned earlier, is one solution. One of the advantages of tokens and NFTs is that anyone can issue them at any time, and anyone can purchase them without worrying about physical distance or transportation.

I think that as one way of monetizing athletes, and as a way to directly support athletes, it is the most easy to understand and effective.

B: But if that's all, isn't it almost the same as crowdfunding?

A: I think one advantage is that the fees deducted are lower than those of crowdfunding intermediary platforms. Another big advantage is that athletes can issue them voluntarily and easily solicit support.

B: I see. Are there any other things that can only be done with NFTs or tokens?

What NFTs and tokens can do

A: I think the important thing is to use NFTs and tokens to boost fan culture and fan communities more than ever before. In that sense, I hope that mechanisms like DAO that allow fans to be more deeply involved in sports will become even more popular.

"Being involved in the management of the team" or "Fans coming up with measures to boost the team" - it's important that using NFTs and tokens will enable teams to build relationships with fans that have never been seen before.

If we can boost the team in this way, the value of the NFTs of the purchased tokens will increase, which should attract even more fans.

This doesn't just mean that the price will go up, but the fact that "I own an NFT of a player who is now a member of the Japanese national team when he was still working hard in J3" or "I bought a token to support the activities of a player who won a gold medal at the Olympics" should be an irreplaceable honor for fans.

For the team, having people with such motivation working hard for the team is a great asset in itself. The ideal scenario would be for Web 3.0 to help build closer relationships than the current relationship in which teams and athletes show off their best in sports and fans cheer them on.

NFTs and tokens are a new way to support athletes

Key Points of Sports and Web 3.0

1. Web 3.0 technologies, especially tokens and NFTs, are beginning to be used in the sports industry. Overseas, projects that combine sports betting with NFTs are also popular.
2. Through tokens and NFTs, the interests of team managers and fans are more aligned than ever before. Teams become stronger and more motivated to become famous.
3. In order for collaboration between sports and Web 3.0 to spread further, the technologies of tokens and NFTs need to become more widespread than they are now. In addition, it is necessary to strengthen the community rather than just use them as a means of fundraising.



Profile

Nakagawa Ken（A）
A 38-year-old freelance writer. He works as an IT journalist, focusing on the latest technology. He is knowledgeable about Web 3.0 and NFT, and has participated in an NFT art project. He was a former member of the table tennis club and made it to the top 16 in Kanagawa Prefecture when he was a student.

Matsubara Masayasu（B）
42 years old, sports journalist. Covers a wide range of sports, mainly soccer, baseball, and basketball. He especially watches more than 100 soccer games a year. Recently, his favorite pastime is going to support his son's youth soccer team.