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Friday, September 17, 2021

Explained: What are ‘fan tokens’, the cryptocurrency in Lionel Messi’s PSG package?

PSG has said fan tokens were a "significant" part of Lionel Messi's welcome package, which has a reported value of 25-30 million euros ($29-35 million).

Written by Gaurav Bhatt | New Delhi |
Updated: August 18, 2021 8:57:02 am
Lionel Messi at a press conference after signing for Paris St Germain, in Paris, France. (Reuters Photo: Sarah Meyssonnier)

Lionel Messi’s signing on fee at Paris St Germain includes some of the French club’s cryptocurrency “fan tokens”, in the latest big name endorsement of new digital assets.

What are fan tokens?

Fan Tokens are a type of NFT (non-fungible token) which is a digital-only asset. Like Bitcoin and similar digital currencies, fan tokens are volatile assets and their value can drastically change overnight.

Fans can purchase said crypto tokens with real-world money to gain access to exclusive content and augmented-reality games. Among other rewards and perks, the fan token holders also get to vote on mostly minor decisions related to their clubs. These fan tokens are created by a crypto platform called Socios. According to the Socios website, fan tokens “give you the status of a true influencer. Step up and help your team take the right decisions by voting on all their official polls…”

What decisions can fans vote on?

Examples include kit designs, goal music, the team’s destination for a pre-season tour. The more tokens a fan has, the more votes they get in the polls. Ultimately though, the polls are decided upon by the clubs.

Which teams have signed up for fan tokens?

Arsenal, Aston Villa, Everton, Leeds, Manchester City, Barcelona, AC Milan, Inter Milan, Juventus, PSG and the Portuguese National Team among others. According to SportsProMedia, when Barcelona launched their first batch of fan tokens last June, they sold out in less than two hours, generating $1.3 million. Socios claims the fan tokens have generated close to $200 million in revenue.

Was Messi paid in crypto? Are there any previous examples?

PSG informed Reuters that fan tokens were a “significant” part of Messi’s welcome package, which has a reported value of 25-30 million euros ($29-35 million).

In 2018, Turkish club Harunustaspor claimed to be the first football club in the world to pay one of its players part of his signing fee in Bitcoin. Omar Faruk Kiroglu received 0.0524 in bitcoin and 2,500 Turkish Lira as part of the deal.

In Spain, last January, former Real Madrid graduate and Levante striker David Barral became the first player to be purchased using solely cryptocurrency, when Segunda B side DUX Internacional de Madrid acquired his signature for an undisclosed sum. Three years ago, Gibraltar United FC had announced that they’ll be paying their players using crypto.

How has Messi’s arrival helped PSG’s ‘fan token’?

Immediately after the first reports linking Messi to PSG came in, the club’s crypto coin more than doubled in value.

In June, a PSG fan token was going for $11.93. As of Thursday evening, it is priced at $43.91. The club told Reuters that there had been a high volume of trading in its fan tokens after reports that Messi was set to join the club. Trading volumes exceeded $1.2 billion in the days preceding the arrival of the Argentine.

“We have been able to engage with a new global audience, creating a significant digital revenue stream,” Marc Armstrong, PSG’s chief partnerships officer, was quoted.

Is this Messi’s first foray into cryptocurrency?

Last Wednesday, the six-time Ballon d’Or winner announced his official NFT art collection called ‘The Messiverse’. “Soccer is like art. It’s timeless,” Messi said in the announcement clip on Instagram.

The ‘Messiverse’ collection will include four digital artworks, depicting Messi in artwork themed on chess (The King Piece), Greek mythology (Worth the Weight), science-fiction (Man From the Future) and a fourth untitled piece to be revealed on August 20.

Earlier this year, Messi was also featured in the Copa America NFT in July. And back in 2017, Messi signed an endorsement deal with SIRIN LABS, a company that launched a Blockchain phone that could store cryptocurrencies.

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