Sports NFTs: What are they and why are they so popular?

by James · October 18, 2022

Thanks to the development of the crypto industry and the great interest in sports, NFT sports are becoming more and more popular all over the world.

Lazio’s title sponsor is a crypto exchange, Inter is a blockchain application, Barcelona and PSG already release fan tokens, and Gretzky, Messi, Nurmagomedov are NFT collections. PSG football club sold $218,000 worth of NFT tickets for matches in Japan, afterwards buildlbee.com. How did it happen and why have all these incomprehensible words already become an important element in sports? Let’s figure it out together.

In November, crypto exchange Crypto.com paid $700 million to rename the Staples Center, where the Lakers and Clippers play, the “Crypto.com Arena” for 20 years ($35 million per year).

Why are crypto exchanges displacing traditional sponsors in sports?

There seem to be several reasons:

crypto exchanges are looking for new customers and there is more interest in crypto in sports;
sporting events are a source of devotion, while cryptocurrency exchanges are unreliable.

Cooperation between cryptocurrency exchanges, blockchain systems and publishers is particularly active in Italy. For example, Serie A signed an agreement with Crypto.com and Lazio with Binance, and there are many more similar cases.

So what about NFTs?

Tokens use blockchain technology, but not in the way that they are similar to cryptocurrencies. Each NFT token is unique, it cannot be simply downloaded or copied and cannot be replaced instantly (like traditional money or cryptocurrencies).

Using NFT and a transaction registered on the blockchain, you can claim any digital assets you have purchased. As a rule, NFT are bought on specialized platforms using cryptocurrency. You can do without them, but the industry considers transactions with cryptocurrencies to be simple, reliable and decentralized.

Therefore, tokens are typically used in two roles:

NFT as a certificate for some material things. For example for real estate.
NFT as a digital object: gif, picture or art. Here, NFT is also a certificate, but the object only exists on the Internet.

By 2021, the global NFT market was estimated at $22 billion. Most of it consists of art and collectibles – for example paintings, gifs or drawings. But in the form of digital assets, such objects have additional advantages. Because NFT items are not only for collecting but also for trading.

The strong growth of NFT is associated with the increase in the value of cryptocurrencies, gamification of the market, the emergence of decentralized platforms with a unique community (such as OpenSea, DMarket and Raible) and the interest of opinion leaders – for example, Elon Musk and Jack Dorsey.

Usually, athletes’ NFT tokens are cards with the most important moments of their career (video, photo, gif, cartoon or drawing), which are issued in limited quantities. Cards that do not sell quickly on the primary market are burned or left on the Internet.

Piracy in NFT

NFTs seem to be the next step in the evolution of digital art because, due to their unique properties, they allow you to create a little more than just art or gifs. But they also create a space for piracy.

However, there are practically no such problems in large sports NFT projects. As a rule, the largest market players such as NBA Top Shot or Sorare use official licenses from leagues, and athletes issuing personal tokens do not need additional rights (unless otherwise specified in the contract with the club).

Revolution of Sport NFT

The revolution in sports NFT was launched by NBA Top Shot. Behind it are the founders of the blockchain, which has reached a turnover of one billion dollars on simple videos.

NBA Top Shot launched just over a year ago and immediately became an extremely important player in the sports NFT industry. The turnover for 2021 is more than 800 million dollars (4/5 of all NFT in sports). In March, NBA Top Shot attracted 350 million dollars in investment, at the same time the company was estimated at 1.5 billion dollars.

The project’s basics are fairly simple and comparable to standard Panini cards, except that instead of stickers or player photos, Top Shot packs include video game events.

You don’t want to get rich suddenly by buying the most expensive package. To be able to buy a package for $ 999, you need to get a high level of collector. To do this, you must first buy packages for $ 9, then for $ 19, and then catch the next drop of expensive goods and have time to buy them.

The received moments can be displayed, participate in challenges and earn new packs. A commission from the subsequent sale of moments between participants on the internal trading platform is how the platform provides additional income.

There is also Sorare – the most important NFT start-up in football. Sorare has already attracted 680 million dollars in investments, among the investors are Andre Schurrle, Antoine Griezmann, Gerard Pique and other footballers. Griezmann even bought Arsen Zakharyan’s card in the match. Big names of investors, low entry threshold and licenses from clubs from Spain, France, England and Russia quickly gave Sorare high trust, but in fact this platform is not used to collect, but to earn cryptocurrency.

Now the topic of NFT sports is most interesting for avid sports fans, but we will observe how events in this area develop.

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Sports NFTs: What are they and why are they so popular?