The revolutionary capabilities of blockchain – particularly in the realm of financial services – are by now well-documented, even if not widely understood. While it is most famous for being the technology behind cryptocurrencies, blockchain’s applications, however, go way beyond those of just banking and investment.
As the technology’s myriad functions and benefits gradually become more broadly recognised and accepted, its socially transformative potential and parameters for innovation continue to widen. Indeed, one of blockchain’s most recent – and perhaps rather unexpected – applications even stretches ground-breaking boundaries as far as the world of sport. Or more precisely, sports fan engagement.
Though most people wouldn’t easily associate the somewhat esoteric nature of blockchain with the fervour and passion of professional sport, one entrepreneur and his company, Socios.com, is experiencing notable success in doing just that – recently signing two of European football’s super-clubs, Paris Saint-Germain and Juventus, as clients.
The concept, which may on the surface seem like somewhat of a mismatch, is actually very cohesive. More than that, Alexandre Dreyfus, the CEO and creator of Socios.com, believes it makes perfect sense.
“We believe that every sports fan in the world should be more involved in the relationship that they have with their clubs, so we are creating a platform where they can buy what we call fan tokens, which give you a right to vote [on club matters]”, he says. “We are helping fans to be empowered and have a voice globally.”
With his radical idea, Dreyfus hopes that the digital tokenisation of fandom can have a similarly revolutionary impact on the world of sports commerce just as the tokenisation of assets is having on the world of finance. It’s also evidently an idea that’s got serious legs, judging by the growing list of high-profile football clubs that are embracing the Socios.com platform to engage with their international fanbase and – crucially – monetise fan’s support.
Tapping Into a Global Market
With the globalisation of sports, and football especially, “99.9 percent of fans are not in the stadium anymore” says Dreyfus. Instead millions watch games via broadcasts domestically and around the world. Besides profiting from the auction of lucrative TV rights, even the biggest and most successful of teams have struggled to capitalise on their growing legions of so-called “armchair” fans. Though they can sell merchandise, very often fans – especially those living overseas – will buy unofficial or pirated goods, leaving the supporter with a counterfeit demonstration of allegiance and the club with little or next to nothing in the way of revenue.
Socios.com aims to change this club-supporter dynamic for the benefit of both parties. In return for buying online tokens of their favourite club, the fan will get a say on matters such as the club’s colours or crest, while also being eligible for special offers.
The notion of giving any paying stakeholder (who may never have attended a match, let alone have any sort of connection to the club’s core local community), a decisive vote on important facets of deep-rooted club identity, may seem sacrilege to traditionalists.
However, Dreyfus believes that while tradition should not be disregarded, and any votes and decisions will be strictly club-delegated, commercial strategies need to be adapted to cater to the changing profiles – and even the changing loyalties – of today’s “average” football fan.
“A casual football fan supports 4.6 teams in the world. So, we’re not a fan of just one team anymore”, he says. “The idea of Socios.com is about engagement, [it] is how these powerful global sports teams can engage more locally with their fans. How can they engage with a fan that is in a village in Thailand, for example, what can they offer them?”
Socios.com may indeed have created a commercially viable route to accessing this previously untapped global fan engagement market. But what will stop clubs from simply selling their voting rights via online tools that are already available through their websites or other owned platforms?
The Winning Ticket
Dreyfus is confident that the sophisticated blockchain digital ledger that Socios.com has developed not only underpins the voting system, making it as secure, transparent and as fair as possible, but also enables another kind of activity that could be key to the concept’s success: token trading.
“As we are giving fans a voice, we need to make sure that there is transparency in the integrity of the vote. So we use blockchain for that”, he explains. “The second reason we use blockchain is we gamify a little bit, so we invite fans to actually trade their fan voting rights.”
For this feature to work in the long term, Socios.com – which launched in July 2019 in time for the new football season – aims to on-board as many clubs as possible, having recently added Serie A’s Roma and the English Premier League’s West Ham United to its roster, alongside teams from France, Spain, Portugal, Turkey and Latin America. Meanwhile, to incentivise fans to sign up, users will be able to load digital wallets for free for a limited period ahead of the first Fan Token offerings throughout September, with the first live polls to launch in October.
An extra feature offered by the platform will also see a total of 2 million dollars’ worth of $CHZ – the exclusive in-app currency developed by Chiliz, Dreyfus’ other blockchain business – made available for fans to search for this summer, along with hundreds of thousands of Fan Tokens, in a Pokémon Go-style hunting game.
The World’s Blockchain Island
“They have succeeded in this PR-buzz about it, but after the PR buzz you need to succeed in bringing companies and delivering the dream that you sold, and I think that, right now, it’s happening here.” Alexandre Dreyfus, CEO of Chiliz and Socios.com. Copyright: South EU Summit
To those in the know, it will come as no surprise that such innovation using Digital Ledger Technology (DLT) – and the potentially inspired idea to introduce it to one of the most mainstream audiences there is (football fans) – has been facilitated in Malta. That is because Malta, which had already established itself as a digitally-disruptive player through creating an enabling environment for the iGaming industry, has now done the same for blockchain and other DLTs through the passing of world-first legislation in 2018.
Dreyfus’ business ventures Socios.com and Chiliz – which last year raised more than 60 million dollars, announced a partnership with the world’s biggest bitcoin exchange, Binance, and established a Blockchain Campus in Malta – are products of this new, enabling regulatory sandbox.
“The idea of blockchain is actually creating a network of plenty of partners. By creating this blockchain ecosystem we help some of the biggest brands, like Binance, OKEx, and a few other companies, to set up a shop in Malta in order for them to be more successful.” Alexandre Dreyfus, CEO of Chiliz and Socios.com. Copyright: South EU Summit
“When I started to work in the blockchain space and crypto space, it was at the same time that Malta started to regulate and launch their regulatory framework”, he explains. “We were part of the consultation process, and what was fascinating to see was how a country really understood blockchain, understood cryptocurrency, and understood how they can position themselves on the global map within that space. They have succeeded in this PR-buzz about it, but after the PR buzz you need to succeed in bringing companies and delivering the dream that you sold, and I think that, right now, it’s happening here.”
As an accelerator and industry hub connecting some of the industry’s largest DLT stakeholders across Asia and Europe, together with other emerging blockchain entrepreneurs, Chiliz Blockchain Campus aims to further facilitate this environment to encourage collaboration and innovation in the industry.
“After all, the idea of blockchain is actually creating a network of plenty of partners”, he concludes.
For Dreyfus, this goal of establishing greater connections between people, whether it be sports clubs and their fans, global peers who share the same passions, or blockchain companies themselves, remains the heart of his venture and driving force of the Socios.com and Chiliz brand.