Sun. Jun 16th, 2024

Blockchain, crypto set to take sports industry beyond NFT collectibles

By Mahesh Limbani May 21, 2022

Bitcoin (BTC) has been attributed as the most prominent blockchain use case, showing the technology’s prowess in successfully delivering an immutable and truly decentralized ledger over the past 13 years. Adding to the years of innovations since then— that saw the introduction of altcoins, non-fungible tokens (NFT), decentralized finance (DeFi) and more, a study conducted by fintech giant Deloitte highlighted the untapped potential of the crypto ecosystem to open up newer markets for the sports industry.

Fan tokens and NFTs were first introduced to the sports industry to increase fan engagement via collectibles and voting mechanisms. However, Deloitte, one of the Big 4 accounting firms, envisions the industry further embracing crypto and blockchain technology over the coming years:

“A nexus will form around sports collectibles, ticketing, betting, and gaming. We are just beginning to see its [cryptocurrency’s] potential, as well as the new markets it could lead to.”

Highlighting incoming trends in the sports industry, Deloitte’s 2022 sports industry outlook report expects an eventual rise in blockchain-enabled innovations, as a result of which “The use of NFTs, crypto, fan tokens, and ticket innovations will grow and evolve.”

“Moving beyond NFTs,” Deloitte expects the sports industry to start soon linking spectators with season tickets over the blockchain. While the initial move toward this goal would mean merely associating game tickets with NFTs as means to reward fans, innovations around smart contracting could potentially open up new use cases:

“We could see fractional ownership of season tickets and suites and a reinvention of the ticket resale process.”

As a result, new revenue streams can be created for sports organizers and teams as smart contracts streamline the processes related to dynamic ticket pricing and resales. However, Deloitte shared four key factors that need to be addressed by the ecosystem: implementing new standards, educating fans and considering compliance and tax implications.

Additionally, Deloitte’s study revealed that NFTs catalyzed the merger between the physical and virtual worlds in sports while predicting over $2 billion in sports-related NFT transactions in 2022 alone.

On an end note, the finserv recommended sports organizations keep an eye on the NFT boom and its impact on other segments such as gaming.

Related: Aussie media company goes all in on NBA fan engagement with NFTs

Supporting Deloitte’s report on the rising NFT trend across the sports industry, Australian media company Basketball Forever recently launched Hoop Hounds, an NFT project aimed to increase National Basketball Association (NBA) fan engagement and provide substantial real-world utility for the tokens.

Basketball Forever founder Alex Sumsky resonated with Deloitte’s findings when he told Cointelegraph that the technology is more than just a token tied to a JPG and allows organizations to provide innovative ways to increase user engagement and give the fans real utility.

As part of the initiative, Basketball Forever will offer 8,888 different “hounds” — various basketball and NBA personalities depicted as animated canines — each with unique traits and differing levels of rarity.