The Utilities of NFTs in Sports

Hi everyone, 

Welcome to Issue #4 of Sports 3.0

🙏 Thank you to all the new subscribers over the past week. If you haven't subscribed, join hundreds of smart, sports industry leaders by subscribing here 👇

🤯 It's clear there is a lot of growing appetite around Sports 3.0 mindset. Watch this space as I've got some further community ideas that i'll look to potentially roll out in the coming weeks.

And with that, on to this weeks issue...

The Use Cases of NFTs in Sports

Todays issue is number 2 of a 3 part series covering use cases of NFTs in sports.

You can read last weeks deep dive into Collectibles here, but today we will be focusing on all things Utility.

For those that are new, here is a handy little image documenting some of the core opportunities I see when it comes to NFTs and Sports.

Utility Based NFTs

What does 'Utility' mean?

Well, in the context of NFTs, Utility is meaning NFTs which actually allow you to do something with it.

Remember, NFTs are much more than just JPEGs. 

They represent smart contracts, and with that they can be programmable with built in action based functionality.

Some considerations and watch outs on Utility based NFTs 👇

• "NFTs don't do anything" is one of the key arguments of major skeptics in the space

• Therefore Utility based NFTs will be one of the key adoption methods for onboarding fans to any Web 3.0/NFT project

• This is because its much easier to demonstrate the value of a digital asset when it actually does something

• It's easy to find and demonstrate purpose when utility is baked in

• The technology of NFTs mean some of the utilities can actually tackle real world problems

• The below is just a snapshot of current utilities which can be provided to NFTs with a sports lens, however, I expect this list to keep growing as innovations and use cases continue to be unearthed

Let's take a brief look at each collectible type:

Ticketing: 

It's clear NFTs can help solve challenges within the world of ticketing.

Mark Cuban and the Dallas Mavericks have been thinking about this for some time.

The benefits are simple:

• NFT technology allows control over secondary market. Not only can resale royalties be built in, but tickets could also be programmed to only be resold to a specific cap

• This means minimising touts

• And as tickets will effectively be 'minted' on chain, this can also combat ticket fraud {See all the problems Liverpool FC have had in the build up to the Champions League Final - as of the publish time of this newsletter they have stopped 13 fans. Spoiler Alert: there will be many more unstopped}

• Transfer of ticket ownership in an NFT world should be a very trustworthy process from fan to fan

• NFT Tickets could also easily be programmed with event based rewards and unlocks

• IDEA: Where teams previously may have hidden surprise and delight 'golden tickets' under fan seats you could airdrop the reward to randomised NFT ticket holders

• Finally with NFT tickets, the collectibility factor exists, where its easy for fans to showcase their fandom legacy in their online wallet

There are some great companies who are making strides in introducing this technology, such as Seat Lab & Get Protocol.

🚨 Top Tip: Like many things in this space, I think the roll out of NFT tickets will take time, however this is something I see inevitable across the next 10-15 years. If your a ticketed event focused sports entity, please be factoring this into your Web 3 and future ticketing roadmap now 🙏

Proof of Attendance (POAP):

NFTs don't have to be scary.

If you have fans coming to stadia for events, one of the first things I would look at is creating a POAP (Proof of attendance protocol) around events.

POAP'S are a free NFT collectible redeemed via a link or QR code that signals event attendance.

Fans redeem via an associated secret code and they receive a customised and branded digital collectible that goes into the fans NFT wallet.

They are described as a 'bookmark of your life' which I think is a nice summary.

In fashion, POAPs are being referred to as a 'new status symbol' (My fashion choices are questionable at best so I must stress these are the the words of Vogue Business).

An easy adoption in sports would be including within programmes, in concourses or even on jumbotrons.

Create these bespoke for each event/match to make verifiable 'I was there' bragging rights for fans.

🚨 Top Tip: POAPS can be used to test the demand, learn from your fans & ease them in. If you decide to proceed with an NFT or Web 3.0 project, you could actually reward existing POAP holders by giving them early access.

Intellectual Property:

Probably a little more boring, but important nonetheless. 

NFTs provide the perfect technology to store and transfer IP. IBM are already exploring using NFTs for corporate patents.

🚨 Top Tip: Ironically, there is also a growing requirement for arbitration in the Metaverse - I'd probably be thinking about this prior to NFT IP 😅

Gaming:

Gaming is one of the clear utilities around NFTs, the main benefit being that typically with gaming you don't truly own in game assets, and they have no interoperability outside of the game.

There are a number of Blockchain and NFT based sports games currently being worked on, a few highlights are as follows:

NFL Rivals - A new announcement from NFL this week where users act as an NFL team’s manager, and Play to Earn elements are integrated

Zed Run - Zed Run isn't the biggest NFT based game, but it's one I really admire. It's virtual horse racing with an avid community. Whats interesting is it allows you to breed horses, creating new horse NFTs based on the pedigree of the parents, and then race your horses for real world rewards.

Ultimate Champions - A newcomer and competitor to Sorare, Ultimate Champions have recently done a deal with Arsenal and are the latest fantasy based game in the space where through owning NFTs and 'playing' them in game every week you can earn token rewards.

🚨 Top Tip: AAA Gaming has a long way to go in adoption of NFTs. Expect to see Play to Earn games similar to the above examples dominate the space for a while.

Move to Earn:

A huge utility trend for the space, we did a deep dive into Move to Earn in Issue #1 of Sport 3.0.

🚨 Top Tip: Read that issue here 😁

Athlete/Team Funding:

As long as NFTs are providing value, they can be a vehicle to help fund raise and/or compensate talent.

This creates opportunities for NFTs to be utilised to support and fund athletes and even teams.

For example, GT Driver Laura-Marie Geissler, was planning to use NFTs as an alternative to sponsorship revenue.

What hopefully happens here is athletes who may have typically struggled due to broken funding models, are now able to build fan bases online and allow them to help contribute to their journey, and also participate in their success.

Imagine in some sort of parallel universe, Barcelona all those years ago chose not to help with Messi's treatments required from a young age. He was released and instead of giving up he was able to issue NFTs to help fund his journey. Sure enough when he became one of the G.O.A.T's, those earliest supporters can easily be identified and rewarded based on holding the NFT.

We are seeing many examples pop up in the States with last years NIL changes, with dedicated companies created to allow college athletes to create NFTs.

A great bull case on NFTs is that they can unlock and reward aspects of the creator economy that the Web 2.0 era just hasn't been able to maximise.

🚨 Top Tip: As the transition continues where athletes become creators and build social followings in their own right before becoming household names, I expect we will see many examples pop up here.

Membership:

Made famous by Bored Ape Yacht club on an industry level, NFTs can be easily positioned and programmed to act as membership entry mechanisms.

You could provide perks to all fans who hold a certain NFT, or even save certain unlocks for those owning specific rarities or traits. 

But this can of course be translated to both online and offline memberships.

For example, LinksDao is a golf focused project with the aim of buying a real world golf club. It raised funds via an NFT drop, but everyone holding the NFT gets exclusive access to an online club, voting rights in the DAO and gets access to a membership to the real world club (once they have acquired the site).

NFT Ownership in Ice Cubes Big 3 Basketball league takes things to the next level including Attendance to parties after gamedays and associated events with players and league personnel & Meet-and-Greets with players and coaches.

A non sporting example is Gary Vaynerchuk's FlyFish Club. Currently in the works, this is a private members dining club where owning the NFT is the only way to get membership!

It's possible to do this with no code solutions. For example Highlight.xyz, who have recently raised $11m, focus on offering solutions for creating memberships on Blockchain. 

🚨 Top Tip: Get the balance right. Membership based utility NFTs will be very popular, but make sure you are standing out by offering access to something that your fans are really going to value whilst no overcommitting. Underpromise and overdeliver should still apply to the NFT world.

Reward Mechanisms:

Whilst NFTs and Digital Assets can be bought by fans in exchange for Utility, they can also be a Utility for sports brands and rights-holders by being given to fans as rewards.

For example Web 3.0 platfrom, Thirdweb showcase a deployment contract where you can recieve an NFT for watching a YouTube video - they call it proof of viewership - really smart.

The mechanic could also be built for fan loyalty.

Taking the example of how Spotify creates Wrapped each year, imagine a Spotify Wrapped x Artist NFT collab where an NFT is available to claim for the top 0.5% of their listeners.

Maybe these top 0.5% can then unlock exclusive content or further experiences based on holding this NFT?

This NFT signifies they are part of 'the club' - the same flex fans are doing when they announce on IG, Twitter and TikTok their unwrapped for the year.

As an owned asset it gives potential upside to their most hard-core fans.

It’s easy to see in sports how we can have so much fun using data to identify, reward and create experiences via NFTs for super fans.

🚨 Top Tip: You can combine some of the other thinking in this newsletter to create reward structures from NFTs. For example, if someone collects all POAPs for all your home games in a season, perhaps they can be rewarded via some NFT experience mechanic?

🚀 Level Up

Hungry for more? Here are a few further things I've hand curated this week that I think you may be interested in:

📺 Watch...

📖 Read... One of the best Sports industry newsletters I read each week is Andy Marston's Sports Pundit - he often covers breaking news in the Sports and NFT space so sign up here if you haven't already.

👨‍💻 Attend... I'm going to be going to the iSportConnect Web3 summit at the end of June. It's an event packed full of great speakers from Meta, NBA, Tezos, Dapper Labs and many more rights-holders, platforms and brands. Tickets are available here - let me know if you're planning to attend.

That's all for this week!

I'll see you next time to discuss a topic you need to be clued up on in Web 3.0, Virtual Identity.

If you enjoyed this insight please feel free to share with like minded friends and colleagues.

Thanks & see you next week,Richard Johnson

P.S I'd also love your feedback. Vote on your thoughts below to help shape the Sports 3.0 content that's helpful to you 👇