19 Feb 2025

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What are fan tokens and how to make money with them

What are fan tokens and how to make money with them

Fan tokens are digital assets that give their holders the power to influence the decisions of their favorite teams and some other membership benefits. Let’s stipulate that those decisions do not apply to the transfer and financial policy.

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The relationship between idols and their fans was like a one-way game before the advent of Web3: some spent money on tickets and fan merchandise, while others earned the money.

Today some things have changed. Sports teams still generate revenue from their fans, but fans can now earn money for their loyalty. Fan tokens released by sports club management and producers were the major catalyst for a new level of interaction.

What are fan tokens in layman's terms?

Fan tokens are a new kind of digital perks for fans of sports teams, musicians, and popular actors. 

Fan tokens provide many different benefits to their holders, in particular:

• access to exclusive content;

• discounts on team-branded merchandise;

• VIP tickets to competitions and concerts;

• unique autographs;

• the right to go backstage or watch training;

• private events;

• different valuable prizes;

• power to shape the future of your favorite team or band.

You can earn fan tokens for promoting the brand image and then trade them on DEX platforms like any other digital asset.

These tokens operate on Ethereum and BNB Smart Chain blockchains. They are most often available as ERC-20 or BEP-20.

Fan Tokens Features

The tokenomics of fan NFTs is rather quirky and volatile. But the main thing is its focus on ownership utility rather than on profits or copyrights. One might say that it's a mixture of traditional NFTs and digital money. 

The basic concept is that a sports club or production center, for example, issues and distributes a limited number of tokens. These tokens are completely fungible, but only within the ecosystem of one team.

Do issuers make money from fan tokens? Yes! Sometimes they are distributed among speculators to pump up the price.

Do the fans make money from fan tokens? Yes! They can resell them on the secondary market.

There is one caveat though, the fan token price directly depends on the sporting and marketing success of the projects.

Paris Saint-Germain Football Club ($PSG) tokens will always be valued higher than those of a regional club. These assets are just as volatile as cryptocurrency, but their price depends more on the team's place in the Premier League than on the actions of market makers on the crypto platform. The higher the team's rank, the more people willing to join the community of winners.

Where can you buy fan tokens

A fan token can be bought both on a traditional crypto exchange (e.g., Coinbase) and on specialized platforms. The dominant marketplace in this segment is Socios, created by Chiliz. It has contracts with most European sports clubs and offers tokens of the most famous soccer clubs and Formula 1 teams.

By the way, soccer tokens generated $3.2 billion in sales in September 2022 alone. But most fans view fan tokens more as a status symbol than as a long-term investment. And the holders have to keep track not so much of stock charts as of the world championship standings.

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