News Technology Media Telecoms

Binance launches sport fan token platform with Lazio football

lazio football soccer alberto

The world’s largest cryptocurrency exchange, Binance, has entered the sports fan token space with a jersey sponsorship for Italy’s SS Lazio football club in a deal worth up to €30 million ($35m) to the club. The sponsorship is for two years with the option of a third.

Unlike non-fungible tokens (NFTs), which are collectibles, fan tokens are more similar to cryptocurrencies and usually provide some ‘utility’ such as fan engagement in votes and the like. However, details have not yet been announced for the Lazio deal.

“The partnership with Binance will allow us to extend our digital presence and connect with fans and followers from all over the world like never before,” said Lazio President Claudio Lotito.

What’s attracting Binance is the fact that fan tokens are very heavily traded. It’s claimed the trading levels are higher than for NFTs. For example, according to CryptoSlam, in the last 30 days, the turnover of all NFTs – across games, art, avatars, sport – was $2.6 billion compared to $4.4 billion for all fan tokens, which are primarily for soccer clubs, with one or two exceptions. 

To date, the fan token sector has been dominated by Socios, which has inked deals with many high profile clubs such as Paris Saint-Germain, F.C. Barcelona and Manchester City. Other players exist, such as Turkey’s Bitci, but Binance’s entry is more than just competition.

Last December 2020, Socios struck a partnership with Binance as a distribution outlet with its substantial customer base. That gave Binance a ringside seat to see how popular they are. While Chiliz, the company behind Socios, might be rich, Binance is way richer. Just yesterday, it launched a $1 billion fund to promote its own blockchain, the Binance Smart Chain. 

Apart from the massive revenues from the cryptocurrency exchange, Binance Coin has a market capitalization of $77 billion. That’s the third most valuable cryptocurrency after Bitcoin and Ether.

In addition to Socios getting a giant competitor, it might also attract regulator attention.

According to the U.S. regulator SEC, most cryptocurrencies are securities. Fan tokens are even more likely to qualify because most are comparatively centralized compared to most cryptocurrencies. Notably, Socios has struck deals with several high profile NBA and NHL clubs, but its stateside partners are not issuing tokens at this stage.

Meanwhile, Binance has been attracting the attention of regulators around the world. That’s mainly because it’s been offering cryptocurrency derivatives, which it has withdrawn from in several jurisdictions. 

From the perspective of sports teams, the entry of Binance could be good news because Binance brings big bags of money. But it may or may not be bad news if it attracts regulators.

On Friday, the U.K.’s Gambling Commission said it had launched an inquiry into Sorare, the NFT fantasy game. Earlier this year, a licensed platform Football Index collapsed with £124 million in open bets. Its business model was a quasi stock exchange for football. While fan tokens are not the same, there may be some similarities in the eyes of the regulator.

Image Copyright: canno73 / BigStock Photo