A giant and passionate fan club, Corinthians bet on the digital market to generate new revenue and saw, in two hours, a massive acquisition of fan tokens, virtual assets that enable fans to live new and exclusive experiences related to the club.
In the club’s initial offer, 850,000 fan tokens were sold between 10 am and 12 pm last Thursday, according to the Socios.com platform, responsible for the operation. The price of each token was $2 (the equivalent of R$10). The $SCCP was the most successful fan token in the platform’s history, new partner of Timon and host of the virtual asset.
The 850,000 assets were acquired in 150 different countries, and 50% of them sold abroad. But, after all, how does the fan token work and how can it impact Corinthians’ revenue and the pocketbook of its fans? O ge heard an expert on the subject and sought out the club to clarify doubts.
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Corinthians seeks digital market to generate new revenue — Photo: ge
Corinthians chose not to give details of the contract, thus, the amount remains confidential. O ge found that the club anticipated some revenue from the agreement, such as a kind of gloves, a bonus that is received when entering into a new contract.
The amount of US$1.7 million (approximately R$8.7 million) was raised in the initial offering of the Corinthians fan token. As the details of the deal have not been revealed, it is not yet possible to know exactly how much the club will receive. Atlético-MG, for example, uses the fan token with an agreement of 50% of the offers’ profits, in addition to a bonus provided for in the contract.
It is not yet possible to trade the fan token, but soon the fan who owns it will be able to sell it at the market price. It is also important to note that the fan token does not “win”. Upon acquiring it, the fan is entitled to participate in all activations thereafter. It’s like a passport or voter registration card.
The first poll proposed for the fan who acquired the fan token was to choose who will be the next idol to be immortalized in the Hall of Fame at Parque São Jorge.
Wanted for an interview on the subject, Corinthians chose Danilo Fratangelo, the club’s Innovation manager, to clarify doubts. Check out the answers below.
ge.globe: What is the club’s expectation with the digital financial market? How was the decision and discovery of betting on this follow-up?
Danilo Fratangelo, Innovation Manager at Corinthians: – We understand that people in Brazil and around the world, especially the younger ones at this time, have embraced the concept of active crypto. Whether it is an asset with a vocation to be a currency or a store of value, to be a contract of ownership or a right to participate, we understand that the possibilities that the crypto economy offers us are countless and will be accelerated mainly over the next few years. Our work as marketing management for the Corinthians brand also involves the role of observers of consumption and behavior trends. And if the adoption of a practice is already massive or on an upward curve, it is our role to understand how Corinthians can benefit from benefiting their fans with it. The club had been flirting with the crypto economy for some time, but it was judiciously analyzing the possibilities of applying this technology to the sport that we first understood that there were some solid possibilities for us there. The first one we announced is Socios.com, and there are two more for the short term to be announced.
What is the club’s revenue projection with fan tokens?
– We use projection models for some scenarios, but in this case we work with what we already have in concrete, which is the great support of Socios, which enabled us to bring Willian. We trust Fiel’s size to make this something even bigger, which is the main variable for any of the models used.
The club’s fundraising with fan token can help with “gifts” to the fans: Willian’s case — Photo: Divulgação/Corinthians
How many fan token offers are on the plans? One sold out in two hours and another is already scheduled for the 9th.
– As of the 9th, the token will be traded at market price, like any other asset, and its price will be defined by the traditional supply versus demand relationship.
What percentage of the proceeds from the total sales amount is the club entitled to? Are there any bonuses provided for in the contract? If yes, how does it work?
– All these are confidential details by our contract, and therefore must be respected. In the world of football, it is common for contracts to have confidentiality in this type of topic as required by the partner, since they deal with several football clubs in Brazil and worldwide, and contracts naturally tend to be different between them.
What is the benefit system like? Who buys more, has more rights? What’s the difference between buying 1 or 200?
– Each token has a weight of 1 in the vote in a poll. However, each poll determines a different maximum value of tokens to be considered as weight, to keep the system fair, remunerating the club, but allowing the maximum number of people to participate.
Does the virtual asset get a valuation? What happens after the fan uses their benefit to vote or receive an award?
– The fan token is a pass to engage in interactions with Corinthians that involve choices, and that take place exclusively within our partner’s platform. As many people around the world want to have this pass and enjoy these interactions with Corinthians, the ecosystem was built with the logic that this pass can be bought and resold. The initial offer is the only time the selling price is set (in this case $2 each fan token). From the moment after the initial offer in which the asset is listed (in our case, on 09/09), free trade is opened between all parties that hold it at that time. And from there, its price is determined, every second, by the number of people who want to buy in relation to the number of people who want to sell.
– No amount of fan token is consumed or “burned” when you participate in any interaction, game or poll. The amount of fan tokens only serves as a ticket for a certain interaction, and it remains always with you, unless you sell. The amount of fan tokens needed to participate in a given interaction varies according to the type of interaction, and is defined in order to maintain a balance in the system.
How long is the agreement with the Socios.com platform?
– This is another confidential topic, for the same reasons mentioned above.
Platform celebrates sale of Corinthians fan tokens — Photo: Reproduction
O ge he also spoke with journalist Mayra Siqueira, a financial market specialist and general manager of Binance in Brazil, a global cryptocurrency company, to talk about the fan token.
Ge.globo: What is a fan token and what is it for?
Mayra Siqueira: – As the English name says, they are digital assets made for fans and fans, as a new way to get closer to their team or sport of heart. They were created by the blockchain company Chiliz in partnership with football clubs, although tokens for other sports already exist. They provide their owners with access to voting rights within clubs, and token owners can receive rewards and participate in exclusive promotions.
Corinthians closed an agreement with the Socios.com platform, and several clubs around the world are betting on fan tokens. What’s the advantage? How does this business work for companies?
– There are numerous advantages, but, in my opinion, the main one is the closeness that the fans have with the team and be able to be part of it. It is possible for the club to do research, promotions, offer experiences especially for this base of people. It was no surprise that Corinthians tokens ran out in a few hours. Loying the customer, that is, the fan, is one of the functions of the fan token. And when we talk about Corinthians, this will be very easy.
– On the club side, it’s another way to raise funds. With the offer, he raises funds from his fans, without depending on the capital market or bank interest. It’s simple and easy. From the side of the cryptocurrency industry, in turn, the gain will also be immense, as the sport, especially football here in Brazil, is one of the great tools to assist in the mass adoption of cryptocurrencies, as it engages billions of people in the world. The issuance of $SCCP and $GALO are very important in this regard, as were the tokens of major European clubs, with PSG highlighted.
PSG used cryptocurrencies to pay for part of the deal with Messi — Photo: Getty Images
The digital asset market has been growing, the trend is for it to dominate the market in how long? Or is this already happening?
– Impossible to make that prediction, but I think that in a few years, Blockchain technology will be as present and invisible in our lives as the internet is today.
Do you think that, in the case of football fans, it is a worthwhile asset? Because it’s not really an investment, but as if the fan bought the right to participate in the club.
– The fan has to analyze the proposal and see if it makes sense within their plans, taking into account not only the possibility of monetary appreciation, as happened with the PSG token, citing it again, but eventually the experiences and possibilities it holds the Fan Token can give you as Corinthians (in the case of $SCCP).
There are still people who don’t “conform” to virtual investments, it’s not like buying an apartment or putting money in the bank. What would you say to these people?
– I would tell these people to seek reliable information about Blockchain technology, bitcoin and other cryptocurrencies and make a small first contribution to get to know them. Financial education is critical in the world of finance.
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