Indian Premier League (IPL) franchises Punjab Kings, Royal Challengers Bangalore and Kolkata Knight Riders have joined blockchain-powered sports engagement platform Socios, which is backed by cryptocurrency unicorn Chiliz. Socios counts European football giants FC Barcelona, Juventus, Paris Saint-Germain and Atletico de Madrid among others as its members.
On Socios, teams can host a fan token offering (FTO), which allows fans to get tokens that can be further used for other exclusive activities. Each team or club gets its own token, which is a finite, digital asset that provides access to an encrypted ledger that governs ownership of voting and membership rights.
Fans must purchase Chiliz tokens (CHZ) via a cryptocurrency exchange in order to acquire these tokens. Socios then lets fans use tokens to vote in polls, get VIP rewards, exclusive club and sponsor promotions, AR-enabled features, chat forums, games, competitions and more.
With the 2021 edition of IPL, which is the most valuable sporting tournament in India worth INR 45,800 Cr, according to Duff & Phelps, suspended because of the second wave of the Covid pandemic, franchises or teams are looking for other ways to boost revenue.
The use of fan tokens is fast gaining momentum as just this year alone over $120 Mn has been generated and will be shared with Socios’ sporting partners, according to financial news website Nairametrics. This goes a long way towards compensating sports teams after the pandemic had hurt their earnings in the past year.
Chiliz has a market capitalisation of more than $2 Bn and was trading at $0.42 at 11:50 PM IST, according to CoinMarketCap.
Venky Mysore, CEO & MD of Kolkata Knight Riders, said, “We were keen to look at new ways of enhancing and optimizing how we engage with our fans, and Socios seemed like the right fit. Socios has already proven what a powerful tool it can be for fan engagement with some of the biggest sporting organisations in the world.”
Interestingly, the development comes at a time when the Reserve Bank of India is said to be informally urging lenders to cut ties with cryptocurrency exchanges and traders as the highly speculative market booms, despite a Supreme Court ruling that banks can work with the industry, according to a Reuters report.
Given that crypto exchanges have recently seen some obstacles from banks processing transactions related to crypto trades, there is a feeling that banks are not really ready to support the industry.
Crypto exchange WazirX’s founder Nischal Shetty told Inc42 recently that banks who refuse to join the crypto party now will lose a huge market. “Some banks have already come forward to work with the crypto ecosystem, although I can’t reveal names. These are the ones who may end up disrupting the sector and ending the monopoly of a select few banks.”
WazirX claims to have hit $5.4 Bn in cryptocurrency transaction volumes in April.