Holders of Lazio fan tokens now have the opportunity to stake it on Binance and earn returns. Yet, the overall performance of fan tokens has declined drastically.
Although only the Lazio token claims to have staking utility, the performance of fan tokens, in general, has been poor.
Many clubs, ranging from football to Formula 1, have issued tokens, including Manchester City, Lazio, Porto, Santos, Barcelona, AC Milan, and Trabzonspor. Yet, most of these tokens have only come to disappoint users, with many losing value just days after their respective launches.
However, despite their overall poor performance, fan tokens have recorded huge progressive sales. In March alone, the tokens hit approximately $3.5 billion in sales.
Do fan tokens actually have utility?
One of the (only) questions that should be asked is whether these fan tokens actually provide utility? One of the main drivers for the poor performance fan tokens have demonstrated thus far falls in part, to the clubs that created them. Ultimately, there’s usually a lack of interest in actually promoting the tokens.
“The problem with fan tokens is (that) the clubs do not actively promote them or the utility the tokens have,” said XCAD Network CEO Oliver Bell. “The people that are buying them are not necessarily fans of the clubs at all; the only buyers are crypto enthusiasts.”
To Bell’s point, perhaps the disinterest in these tokens is the result of the clubs themselves not actually seeing them as anything other than a short-term financial opportunity.
Additionally, there is very rarely, any “direct” connection between the fan token and the club, regarding the utility the token offers. In other words, the club’s fans aren’t usually the ones buying the tokens – but why?
Juventus and PSG tokens, for example, have utility associated with the club. Juventus allows fans to use the token to buy VIP tickets, and holders of PSG tokens were able to vote on the club slogan and team’s design.
Another rug pull?
Yet, both cases provide very minimal benefits, giving off the impression that most holders are nobody other than speculators who look to sell as soon as possible.
“I would never keep them in my investment portfolio for the long term,” said Miguel Schweizer, 29, chief executive officer of Decrypto, a Buenos-Aires based exchange and wallet. “They’re trade opportunities.”
Schweizer bought PSG fan tokens when news broke out that Lionel Messi was moving to the club – but quickly sold if soon thereafter for a profit. Since then, the price has fallen significantly, where PSG fan tokens reached their ATH in April 2021 ($58.79) – today, it’s only worth $15.27.
But is it too early to pass judgment on these tokens?
Socios founder Alexandre Dreyfus, believes that these tokens aren’t investment assets, but rather made to provide a service:
“We think it matters for fans to be recognized by the club, [wherever] they are in the world as someone who belongs to a community,” he said. “Secondly, as soon as I am part of a membership program, it is normal that I have some influence. Of course, this cannot happen on the field, it cannot happen on the business [side], but there are still many other things you can still try to push clubs to give to the fans. Our job is to try to push the clubs to give more to the fans.”
Thus, a drop in their price doesn’t necessarily affect their long-term value. He pointed out that Socios has 57 fan tokens, far above the 20 it had last year. This, he claims, is a sign of rising interest in the tokens.
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