From the International Olympic Committee to mlb, MMA, and the French Football Association, they have all become a trender in the NFT (Non-Fungible Tokens) market. Heading into 2021, almost every week, sports rights agencies announce partnerships with NFT platforms.
But even for those familiar with blockchain, cryptocurrencies, and decentralized digital identities, this is still a mysterious area in the digital ecosystem.
Capital Sports Media's Capital Block is working to train sports industry executives on what an NFT is. In many ways, these executives remain a bit confused about the huge historical opportunity before them.
nudge
The digital currency sector has already established a partnership with the Turkish super giant Galatasaray Club. They are increasing fan engagement and loyalty to the club through a variety of digital channels, including cryptocurrencies.
The deal has created a wave in Turkey, with many similar agreements coming. Turkey is a market that highly values cryptocurrencies, and investors want to fend off inflation and turmoil in the country. At the end of October, the value of the lira fell to an all-time low.
"The deal with Galatasaray gave us a huge boost. We began to be engulfed in business requests for cryptocurrencies to work with football clubs. This has helped us drive the development of the cryptocurrency, blockchain and NFT divisions, which are a top priority for our business. Capital Sports Media CEO Tim Mannar said in an interview.
"As a business, our background in the cryptocurrency space makes us very clear about what the NFT really is. We define ourselves as the number one sports institution in the NFT field. Tim Mannar said.
Today, Tim Mannar and Capital Block are working to address the key questions raised by their holders. These people understand that NFTs show great potential, but they don't know exactly how to make the most of them.
understand
First of all, it is very necessary to understand what NFTs are.
Simply put, an NFT is a digital asset with a unique code. This non-replaceable code can be linked to any type of digital asset, including but not limited to photos, audio files, illustrations, videos, or animations.
This unique and irreplaceable code is registered on the blockchain. Blockchain is a digital ledger that generally supports the use of cryptocurrencies.
In general, holders of NFTs can acquire these digital assets through various online platforms, or auctions. Buyers then store assets in digital wallets for mobile devices such as mobile phones. Some people just want to collect NFTs, while others use these assets in their games. These non-fungible tokens can be traded, and the initial investor is able to make a corresponding profit from them.
"Football clubs must not think that they can only get involved in the NFT field if they understand how cryptocurrencies work. But they do need to understand what an NFT is and what a blockchain is. Tim Mannar explained the threshold of the NFT.
In the football market, everything from drinks sold off the pitch to millions of dollars worth of broadcast rights is quantifiable. This is the perfect scenario for NFT applications. Perhaps the biggest obstacle to its entry into the mainstream market is convincing holders that these NFTs are actually valuable. After all, any digital asset can be copied, although the only code hidden under a blockchain file can only have one "owner."
"It involves the issue of asset ownership. You have a certain moment in history, and it's like a work of art. You can have a copy of a famous painting, or even an original. Clubs shouldn't just see this as an opportunity to make money. This is actually a huge opportunity for fans to participate, and sports are only its skin. Tim Mannar said.
revenue
For owners, whether it is a professional sports league, or an individual athlete, or a club, they can get corresponding benefits through the sale of digital assets in the future, as well as the original sale.
The NFT market soared at the beginning of the year, entering the second quarter and began to cool down, followed by the NFT field advocates once again optimistic about the industry's prospects.
In sports, football-focused NFT trading platform Sorare raised $680 million in September through a Series B funding round, bringing the company's valuation to $4.3 billion. Also this month, Dapper Labs added La Liga and the NFL to their client list and completed a $250 million funding round that valued the company at $7.6 billion. The company's list of partner clients also includes the NBA's Top Shot NFT market.
In areas such as art and games, several NFT products have been auctioned for 6, 7 or even 8 figures. The sports space also has huge prospects, although off-the-shelf digital products on the NBA Top Shot start at less than $10.
barrier
NFTs face a lot of obstacles if they want to really enter the mainstream market of sports. What Capital Block is doing is clearing the way for clubs to give them the best path forward, from the creation of these digital assets to the selection and use of the best blockchain trading platform.
In general, clubs are keen on stability and are careful not to fall into the trap of short-lived fashion. They need to believe that NFTs, as standalone, fan-engagible digital tools, can generate positive, low-risk returns on investment.
To achieve this, NFTs must be separated from the turbulent world of cryptocurrencies. In addition, there are about 4500 blockchain, cryptocurrency and NFT platforms with different functions on the market that need to be converged to improve reliability and reputation.
"With so many available NFT platforms, it's completely understandable for clubs to feel nervous. They don't know who they are and what they can offer. But that's what we do and we can help the club throughout the process. Fans also need to understand what NFT is. I think it's still three to four years before NFTs actually spread among mainstream sports fans. Currently, the cryptocurrency community accounts for 99% of NFT product sales, compared to 0.5% of our share in the sports space. Of course, this requires educating the market, and ordinary fans need to experience NFT products. It won't really take off in sports until then. ”