What are non-fungible tokens (NFTs)?
Think digital art. NFTs are collectible digital assets that hold value, just like how Van Gogh paintings are worth millions. Behind those artworks, there is a completely unique and non-interchangeable unit of data stored on a digital ledger that uses blockchains technology to establish proof of ownership. In the last year, we've seen athlete and sports NFTs grow in popularity, which led to some speculating whether or not these quirky digital assets were just part of a dying trend.
Non-fungible tokens (NFTs) may appear to be a passing fad, but with more than $10 billion traded in the third quarter of 2021 alone, it's clear that this emerging technology is here to stay. And with their growing popularity and a shift to the mainstream, both brands and athletes are starting to reap the rewards of these revolutionary digital assets.
Big name athletes such as Rob Gronkowski, Von Miller and Stephen Curry have joined the NFT hype, with big bags of money invested into digital artworks or even starting their own NFT collection. The NBA have also released NBA Top Shot, a blockchain-based platform that allows fans to buy, sell and trade numbered versions of specific, officially-licensed video highlights.
NFTs will create new revenue streams not only for athletes but fans too!
If you love sports, have you ever bought a jersey, a basketball card or any type of sports card? If you answered yes, NFTs are for you. Imagine getting free tickets for owning an unforgettable sports moment - this is starting to happen! Athletes are now giving away special items to people that own their NFTs! Non Fungible tokens (NFTs) are now letting them do just that. Deloitte predicts that NFTs for sports will generate more than $2 billion in transactions in 2022, about double the figure for 2021. By the end of 2022, we expect that 4–5 million sports fans globally will have purchased or been gifted an NFT sports collectible. Interest in sports NFTs is likely to be spurred by activity in the wider NFT market, including that for digital art, the top five most valuable sales of which had generated over $100 million by August 2021.
NFTs allow ownership and use rights to be demonstrated for any piece of digital content. They do this by assigning the content a specific, non duplicable identifier that is recorded on a distributed database, typically Ethereum or Solana. Ownership of an NFT may include ownership of the underlying digital asset, though most sports NFTs sold to date have no ownership or use rights in the underlying media. Each includes a smart contract whose terms are applicable indefinitely and that executes immediately and irrevocably with each trade.
What’s so special about NFTs?
Each NFT is unique in the same way that each limited run of a physical print of a basketball card is individually numbered, yet otherwise identical. In this way, NFTs bring scarcity to digital content. They’re the digital equivalent of printed sports trading cards—which were selling for up to millions of dollars each in 2021 and which have long been a major revenue source for teams and leagues, especially in the US market. NFTs effectively address the same needs as cards, but swap still images with digital ones.
NFTs are growing in an unorthodox way, and this does not look like a random trend that is going to disappear. Soon you'll be buying tickets to your favorite sports game and it will be given to you in NFT form.
Here at OpenSponsorship we already seeing these sports NFT partnerships fall into one of three distinct categories:
- Athletes becoming ambassadors for popular NFT collections.
- Athletes creating their own collections to mint.
- Brands creating curated collections with athletes.
Here are a couple athlete NFT collections that caught our eye recently:
Paul Pogba enters the NFT market as ambassador for Crypto Dragons
“I am happy to announce to you I’m partnering with a phenomenal project called CryptoDragons. This is my first time getting NFTs, so this is huge. You see I’m going to get some dragon Eggs so as you know what’s gonna happen - I’m gonna be the “Father of Dragons,” said he in the video posted on his official Instagram account.
TEAM GB skateboarder Sky Brown x Yoplait
“At Yoplait, we are constantly looking at new ways to revolutionise our campaigns. This is a first for both Sky and Yoplait, allowing the brand to deliver fun like no other kids’ healthy snack.