The emergence of the cryptocurrency-based fan token
Neil Dady, a member of Wolves 1877 Trust offers his own view on the emerging cryptocurrency ‘fan token’ offering.
The Football Supporters’ Association was clear in its message on Twitter:
‘’Clubs are either trying to monetise serious fan engagement which they should already be doing for free or they're trying to squeeze extra money out of supporters by making up inconsequential 'engagement' polls. Which is it? Neither is a good look.’’
Socios.com has firmly arrived in the English Premier League with Arsenal, Manchester City, Everton, West Ham and now Leeds United all signing up with the cryptocurrency provider that is using a ‘fan engagement’ offering as a way of marketing ‘football tokens’ to fans across the world, anyone can buy and trade ‘tokens’ in their favourite teams.
We have heard nothing from our club, Wolves, that suggests they will be entering into a partnership with Socios.com anytime soon, but all Premier League clubs are looking closely at ‘fan engagement’ and the opportunities that exist to exploit a growing worldwide fan base.
You will probably be asking: ‘What is the problem with the emergence of another ‘take it or leave it’ offering for football fans to spend their hard-earned money that creates revenue for our club?’
The offering is simple, load up an app, buy some fan tokens (£1:00 or £2:00 each) and get the opportunity to vote on some ‘fun things’ at your club.
It’s suggested that supporters will get the chance to vote on ‘man of the match’, goal celebration music, player cam options and maybe even naming the training ground. All could be described as ‘low level’ fan engagement and probably the sort of thing that you would expect Premier League clubs would do be doing for free through their younger supporters.
The man behind this attempt to bring cryptocurrency trading to football supporters is Alexandre Dreyfus, an internet entrepreneur with years of experience in the gaming and sports industries and now the CEO of Chiliz, whose cryptocurrency is used for buying and trading Socios fan tokens.
Dreyfus co-founded Winamax, which went onto become one of the largest online poker sites in France. The link between Socios.com and online gaming should be a cause for concern.
Dreyfus has some interesting things to say, the quotes below are taken from a recent article in City AM (link to full article below).
“My job is to monetise the 99 per cent of fans that aren’t in the stadium’’
“We are not targeting the guy who has a tattoo and is a season ticket holder. Our clients are the guys who will most likely never go to the stadium and yet dream about the team but were born in Korea, Japan, Turkey, or Brazil. Not acknowledging them is discrimination.”
“Of course, it is money driven, Sports teams need to pay their players; players are more and more expensive; therefore, you need more and more revenue. We are a new revenue stream – period.”
If buying a ‘fan token’ only offers inconsequential voting on matters that are of no real importance, what’s the point?
Dreyfuss explains “These kinds of small things, are they gimmicky? Yes, sometimes they are, but it’s still more than what you had the day before.”
But won’t it lead to supporters trading in cryptocurrency?
Helpfully, Dreyfus is very clear again “Maybe. Some will hold their token forever, some will trade because there is a gamified element to it, so why not?”
The hypotheses, therefore, according to Dreyfus, is that match going supporters are an irrelevance in marketing his ‘fan engagement’ app to supporters across the world. Why therefore is he proposing to give away ‘fan tokens’ free to season ticket holders?
In my view Dreyfuss, the entrepreneur, wants to use season ticket holders as the route to legitimise his ‘gimmicky’ offering, he wants us to get in involved with the gamified element of online trading.
Money for nothing started with the ‘snake oil salesman’ of the past, the marketing men behind this latest attempt to further ‘monetise’ football supporters are offering very little in return, other than an online currency gamble. It appears to me to be an empty vessel, created in a virtual world aimed at nothing more than taking cash out of your pocket, others may think differently.
The real concern is that this is being marketed as ‘fan engagement’, but it has a real risk of exploiting vulnerable football supporters. The trading element will be attractive to some, ‘gamified’ as Dreyfus say’s ‘so why not’? Well, maybe because cryptocurrency trading addiction is real, just like a gambling addiction, it’s a behavioural addiction that disrupts or damages personal and family relationships and may lead to unrecoverable financial loss. Why would Premier League clubs expose its supporters to such a risk through this ‘entry level’ gamified, gimmicky app, fan engagement at what cost?
To be clear Socios.com are offering tradeable fan tokens in clubs across the world to anyone who wants to invest, sharing profits on a reported 50/50 basis with their partner clubs. You will of course be made aware that the value of cryptocurrency can go down, as well as up, but don’t worry you are being introduced to trading through the app. Dreyfus again: “Does it educate you about the fact there’s a trading component involved with stock? Yeah, sure, probably, and that’s fine.” Let’s not forget that Dreyfus’s career history is embedded in online Poker gambling.
Cryptocurrency trading is legitimate, but you need to know what you are doing. There is a lot of regulation involved on the stock market, so why are our football clubs encouraging fans to get involved? Greed, it brings you no benefit, buyer beware.
Further reading:
https://lufctrust.com/article/statement-on-the-lufc-fan-token