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The evolution of Fan Tokens

Introduction on Fan Tokens

Technology, innovation, platforms, virtuality are some of the issues that have been running through football for the past months, as they are crossing the global economy. Emulation is developed at the brand, marketing, merchandising, and social media impact levels. Participating in this hectic race costs a lot of money. Few clubs have the financial prowess to cut through the competition while majority of the find it difficult to compete against the powerful. Clubs now more than ever need to expand their financial resources, which necessitates an almost constant search for new sources of income.

In a world where Cryptocurrency is reaching new heights every single day, Fan tokens have made a name of their own. Fan Tokens (FTs) are highly volatile sports cryptocurrencies issued by sports clubs that help the clubs to strengthen fan engagement. Loyalty programs were one of the most successful ideas that the clubs made in order to approach the supporters. With these programs, a loyal customer of the team, or a close fan of the team, could sign up for the program, pay a small fee, and receive a variety of discounts, benefits, stadium upgrades, official jerseys, player experiences, and, of course, discounts on the services provided by the club sponsors. The fan may feel a little more connected to the team.

Current Status and Importance

Interesting to note that pursuant to Article 18bis of the FIFA RSTP, “no club shall enter into a contract which enables the counter club/counter clubs, and vice versa, or any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its team.”

Does the question arise whether a fan token holder (i.e. a third party) be able to exercise influence while voting on a club's tiny day-to-day choices in this way? Perhaps not in the current model used by crypto businesses, but it's worth remembering that the regulatory limit line has yet to be set. As clubs' desire for additional revenue streams develops, polls that appear inoffensive now may begin to straddle a dangerously hazy line in terms of influencing internal policies.

Fan tokens, as innocuous as they may appear, are appealing for a variety of reasons that go far beyond the club-fan relationship: These assets are tradeable. on the blockchain in real-time, resulting in a continual like a stock exchange, their price fluctuates. For instance, the press has reported that a signing is forthcoming. The motivations that drive fan token holders may occasionally include a desire to engage with their sports club by voting on minor day-to-day choices. Fan tokens, on the other hand, may become more "stock speculation" disguised as "fan interaction" because they are profitable financial assets. By the way, has anyone ever inquired as to how many of the club's fan token holders are also club supporters? When commercial earnings are maximized, the quantity of genuine fans among the fan token holders becomes almost immaterial. As a result, the holder of a fan token does not have to be a fan of the team, but rather an investor looking to benefit from speculation or even infusing money into the club with no visible return.

Platforms issuing Fan Tokens

In May 2021, announced that it had just become the first cryptocurrency partner of the Serie A league, Italy’s football elite. The latter became the first professional football league to partner with a cryptocurrency platform. During the 2021 summer, the cryptocurrency platform BitMEX became the official partner of AC Milan. This multi-year partnership includes the “sleeve partnership” on the shirts of both men’s and women’s teams in all competitions (including UEFA Champions League and e-Sport). In September 2021, it was the turn of the French club Paris Saint-Germain to partner with the Hong Kong-based platform It should be noted that this partnership includes the payment of a portion of’s consideration in cryptocurrency. Also, in September 2021, Juventus FC entered into a partnership with Bitget, an Asian “crypto” platform.

The first and currently largest provider of fan tokens is Socios, a sports fan engagement platform that has been developed by Chiliz, a Malta-based company that states its objective as “pioneering a generational shift in the sports industry through digital assets”. Socios fan tokens are based on the Chiliz chain, an Ethereum-based proof-of-authority sidechain. Chiliz (CHZ), the platform's internal cryptocurrency, began as an ERC-20 utility token on the Ethereum blockchain and now serves as the digital money for the Chiliz and Socios platforms. Major cryptocurrency exchanges such as Binance and Coinbase accept CHZ for trading. Potential buyers of fan tokens had to first get CHZ, which they could then sell for fan tokens. The tokens could only be purchased and traded within the Socios mobile app, which includes a wallet where the tokens are held, or on the Chiliz exchange, which only accepts CHZ as a form of payment. By now, tokens can also be purchased on other exchanges using cryptocurrencies other than CHZ.

Fan tokens are released through an initial coin offering, similar to other tokens' initial coin offers. Typically, a Socios-club collaboration is announced first, followed by a token offering announcement afterwards. The total amount of potential tokens outstanding for each fan token is determined before the token offering by the club and Socios. During a fan token offering, a pre-determined number of tokens are offered, which are only a portion of the total number of tokens available and can be purchased for the fixed offering price.

The day of the fan token sale is set, and there are two time windows on that day, each with a certain number of tokens available. The first window lasts two hours, and the second lasts until all of the tokens available have been sold. This could happen in a matter of minutes or take several days in the past. However, according to Socios, the total number of tokens available in the initial supply may be changed based on demand, and hence may surpass the quantity initially disclosed. Each player is limited to a certain number of tokens (typically between 50 and 250 in both rounds), which is at least doubled in the second round.

Iqoniq Case Study

The lack of regulation on Fan Tokens raises a red signal for sport regulatory organizations, especially when it comes to Financial Fair Play (FFP). After so, would releasing a large number of tokens to artificially increase a club's revenue be permitted under FFP? The concentration of these assets as a new source of revenue for clubs is already a reality, and all of these issues deserve to be addressed and debated thoroughly so that regulations are followed to the letter.

Iqoniq is another platform for fan engagement. In 2020 IQONIQ vowed "Within the next 3–5 years, IQONIQ has pledged to become the Number One Fan Engagement Platform for the Sport and Entertainment Industry," which has secured arrangements with a number of football clubs. Then they vanished.

Iconiq's concept is similar to that of Socios, the industry leader in the 'fan token' field. Fans had to buy the platform's native token, IQQ, before they could buy fan tokens from clubs with whom ICONIQ had made agreements. Again, this is similar to a lot of other fan token offerings.

Olympique de Marseille, Zenit St Petersburg, Crystal Palace, Euroleague Basketball, McLaren F1 - and a number of other sports organisations and businesses - had all struck arrangements with Iqoniq.

Today, Iqoniq’s token is worthless. The major reason for this is the lack of due diligence conducted by organizations that struck a deal with Iqoniq. After some due diligence, the following was exposed-

  • Iqnoiq’s CEO, Kazim Atilla, was named in a case filed by the Securities and Exchange Commission against a con artist named Rodney Tringham.

  • Lux Media Investments, a Luxembourg-based corporation, was the source of IQONIC's $100 million investment. A corporation with only one employee (a Greek resident named Piet Sarloos), no money, and no employees.

  • Atilla was previously the CEO of InfinAgora, a real estate business that burnt through millions of dollars in investor funds within two months of its launch in 2015.

Real Sociedad is owed €820,000 (about £685,000) by the corporation, while Crystal Palace, who had the company as a sleeve sponsor on their shirt, has also taken legal action over missed payments.[1]

Problem with this Model

Fan involvement is something that generally falls under the marketing department for sports clubs. And it's usually a one-time expense for the franchise, not something that generates a lot of revenue. These fan token schemes are increasingly resembling sponsorships. Instead of the brand donating money to the franchise, it's coming from the pockets of the fans. A traditional sponsorship works when a company donates money to a sports team in exchange for exposure and brand positioning. The way fan tokens operate is that the author of the token and the franchise split the revenues from the token's sale. The tokens are sold to fans (or anyone else, for that matter, so you don't have to be a fan) and the proceeds are presumably divided. Many people have expressed their dissatisfaction with the lack of fan interaction.


In August 2021, the Argentinean football player Lionel Messi was transferred to Paris Saint-Germain. In just five days, the value of "Token" increased by roughly 130 percent. The ultra-mediatization of this event was able to draw attention to the innovative financial arrangement of the contract established between the seven-time Ballon d’Or winner (six at the time) and the Parisian club. Indeed, this agreement included the payment of the PSG Fan Token ($PSG) mentioned above.

Returning to Lionel Messi, this is the first time a player of such sporting and media fame has signed to be partially paid in $PSG Fan Token: 3% of his total compensation. We do not know the specific terms of a rate that could go either up or down depending on the volatile price of $PSG. With this use case, it is now known worldwide that cryptocurrencies can be part of a football player’s overall salary.

Does this set-up reflect a real conviction of the players for the cryptocurrency to the point of making it an element of remuneration, or is it a “corporate” act imposed to promote the fan token? One thing is certain: supporters’ involvement through the acquisition of fan tokens is growing whether it is motivated by the desire to participate in governance, the will to discover “fintech” or the taste of mixed feelings linked to the rollercoaster. And we are only talking about fungible and tradable tokens. Add to this the possibility of holding a digital asset, such as a player’s image. Attribute it to the properties of rarity, uniqueness (nonfungibility), and immutability. The idea of the spread of crypto assets in the football empire is constantly growing.

Fan Tokens is the newest way for rich clubs to earn money from fans. Match tickets, Season Tickets, Stadium tours, etc limit a club’s source of earning from fans to a particular geographical location. This is how clubs are virtually earning money at a global level. Socio’s fan tokens and Sorare’s NFTs crystallize the fans’ commitment. They are the key to those business models. Today, it is an invitation to adopt new technologies, and tomorrow it could be an injunction. The immersive experience has only begun the Metaverse. Another new word to designate a new world, a new concept, a new step towards more virtuality.


Crypto-assets come in a variety of forms, including cryptocurrencies, utility and security tokens, and non-fungible tokens. The majority of these assets are newer inventions. As a result, academic evidence on their risks and rewards is currently limited. The tokens are highly volatile, exhibit substantial downside risk, closely co-move with each other and several cryptocurrencies, and overall resemble cryptocurrencies more than other assets such as stocks of publicly listed clubs. Furthermore, investor interest in fan tokens is favorably related to token returns in general. The basic information discovered in match results starts to influence prices as the market for these tokens matures, however the unintuitive direction of the effect of victories is consistent with the prevalence of behavioral biases in trading decisions.


A special thank you to Tarsh Khanna, Symbiosis Law School, Pune for his invaluable contribution.

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