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The relationship between blockchain and esports today

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Blockchain and esports have seen exponential growth in recent years. So, what’s the relationship between the two? In this article we’ll review the existing intersections between them, keeping in mind that these areas are constantly growing as each industry evolves.

Blockchain technology has undergone significant changes over the years, and there are increased possibilities with continuous technological developments. Esports, for its part, has evolved from a competitive activity to one of today's world’s most flourishing industries.

Sponsorship as a gateway

In market studies on blockchain and cryptocurrency, esports is one of the most likely candidates to adopt the two technologies. The esports audience consists of young) digital natives with purchasing power who love new technology and have their fingers on the pulse of what’s new. As such, there has been a surge of blockchain companies investing in esports sponsorships as part of their marketing efforts.

The most prominent example of this is the partnership between the groundbreaking US-based Team SoloMid and the cryptocurrency exchange FTX. The ten-year, $210 million agreement includes a naming sponsorship whereby the club now goes by TSM FTX.Among the world’s historic clubs, the UK-based Fnatic is largely seen to be in the top three. In addition to boasting impressive content creation and international business development strategies, Fnatic signed a five-year, $15 million sponsorship deal with the exchange Crypto.com, a Singaporean company recently announced as an official sponsor of the 2022 FIFA World Cup. The enterprise also sponsors, among many other events and organizations, Formula 1 and Paris Saint Germain, and has emblazoned its brand on the legendary home of the Los Angeles Lakers, now known as the Crypto.com Arena.

Virtually every major club in the global esports industry today has a sponsor linked to blockchain. But it’s not just teams. More and more leagues and competition organizers have similar sponsorships. The American cryptocurrency exchange Coinbase sponsors not only teams, such as the US-based Evil Geniuses or Germany’s BIG, but also two of the world’s most prominent organizers: ESL and BLAST.

TSM FTX, a great example of the relationship between esports and blockchain Photo: http://pablommonti.com/wp-content/uploads/2022/01/tsm-ftx.jpg

NFTs: an opportunity for everyone

The emergence of non-fungible tokens (NFTs) has made an impact on a global scale. Whether it’s Beeple’s "The First 5000 Days" NFT fetching a cool $69 million or the bundle of 101 Bored Ape NFTs raking in $24.4 million, NFTs’ takeoff has reached meteoric heights. On the flip side, they’ve also been garnering headlines because an estimated two thirds of all minted NFTs have fallen in value or are now worth nothing.

At the organizational level, the NBA has probably had the most success with NFTs, working on them in-house and launching Top Shot, its own NFT marketplace. Moreover, the league gave NFT buyers a superior user experience. In esports, one of the pioneers was the European team G2 Esports, which in mid-2021 launched its own NFT line in collaboration with Bondy.

Many other clubs have lined up behind G2 to release their own non-fungible tokens. FTX TSX has its own tokens, and blockchain giant Binance leveraged its Binance NFT brand to launch non-fungible tokens for the British team OG. Even ESL has launched its NFT on Counter-Strike: Global Offensive and is assembling a sizable internal team for NFTs and collectibles. Soo, all teams will market NFTs just as they do t-shirts and other merchandise.

Tokens as a new source of income

As a unit of value, tokens can quickly begin to generate revenue for a company and provide value to whoever acquires them, both from the price itself and what it represents to that person. Socios.com was quick to understand this dynamic, and together with Chiliz flooded the sports world with fan tokens for clubs and entities to trade. To top things off, they recently signed Lionel Messi as the brand's global ambassador. In the esports world, Socios.com and Chiliz were behind the release of $VIT, the fan token for France’s Team Vitality, and $TH for Spain's Team Heretics, among others.

G2 Esports and Fnatic, two pioneering clubs, went a step further and launched token and NFT-based partner programs. Through different membership tiers, G2 in collaboration with Metaplex, Fnatic and Crypto.com offer their followers perks ranging from experiences such as trips and events, to autographed t-shirts and community-exclusive NFTs.

A prominent example of tokens as a source of revenue is Spain’s Team Queso, which launched TQ Olympo in collaboration with Avalanche, a smart contract platform. TQ Olympo’s core concept is crowdfunding backed by security tokens, meaning that investors who want to acquire equity in the company will be able to do so by purchasing its tokens. In addition, token buyers will also receive NFTs from the club.

It’s high time to tokenize esports

The paths of blockchain and esports have inextricably crossed, and there is no turning back. However, the companies involved need to smooth out the bumps on the road to the tokenization of esports.

This is just the beginning...

The blockchain and esports industries were quick to understand that the relationship between the two has amazing potential. That potential continues to grow hand in hand with the evolution of both blockchain-related technology and esports. It’s only a matter of time before every club and organization in the industry adopts blockchain technology to create greater value and further foster loyalty in an already extremely loyal community, made up of people who are expecting to reap the benefits that blockchain holds in store for them.

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"The paths of blockchain and esports have inextricably crossed, and there is no turning back. "

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