The digital theme continues in motorsports, centering around the fan experience and increasing engagement. This month we will look into the growth of non-fungible tokens (aka NFT) and its use in the sports industry.
As another new class of digital asset, NFTs are taking the over the sports world by storm. The increased visibility and popularity has led to a better understanding and acceptance of the digital marketplace.
Paying for digital-only content may feel unfamiliar. A decade ago, this behavior was niche. But the evolution of spending within video games points to a burgeoning, now mainstream acceptance of the concept. Gamers spend billions on virtual currencies that they then use to purchase game-related artifacts and capabilities that only exist virtually.
The sports marketplace for NFTs is rapidly growing. Analysts predict that there will be more than $2 billion in transactions in 2022, twice the previous year. This have been about 4 million sports fans globally who will have purchased or been gifted an NFT sports collectibles.
When it comes to racing nothing beats the enthusiasm of its fans. They go to extreme lengths to support their favorite driver, team or sponsor. They spend big money on races, tickets, and merchandise.
Fans are crazy about owning racing collectibles, from die casts to signed driver cards, t-shirts, hats, and anything and everything to do with motorsports.
Collecting and trading racing memorabilia has long been a popular way for fans to express their passion for sport with physical products, whether it be through assembling a collection of die casts or filling up a garage with race worn tires and banged up fenders.
NFTs will initially represent various items of the motorsports collectible landscape. This may include: tickets, programs, driver cards, helmets, video clips and other pieces.
NFTs now offer a new digitized way of collecting sports memorabilia.
One may ask – physical or digital.
Old physical trading cards have been sold for millions. This is the result of a limited run of a print is individually numbered, yet otherwise identical.
NFTs are the digital equivalent of printed sports trading cards and they present the ability to swap still images with digital stills or video.
Value in each case is a function of demand and scarcity
They also present a great money-making opportunity for the racing industry. Teams, drivers, sanctioning bodies, and tracks players will be able to sell limited-edition video clips of moments (taking the checkered flags, crashes, etc.).
The value of each NFT will depend on the prominence of the driver, the significance of the event / win / crash, any additional content included within the NFT, and demand.
An NFT limited to a single edition of a major event—a win or crash bundled with a commentary by that driver star—could be sold at auction, while the same video but with no additional content could be sold or traded via an online marketplace.
Many motorsports entities are exploring the NFT space.
Formula One and its teams including are dropping digital recreations of race cars. This reflects the technology and engineering nature of the sport.
Speedway Motorsports created RaceDay NFT – a digital collection marketplace for their racing venues. Their goal was to drive excitement towards the tracks and events. Featured digital objects included: tickets, coins, and die cast cars. Fans were able to buy, sell, trade or hold motorsports-themed NFTs.
Recently formed, MotorDAO plans to offer motorsport fans and online communities the chance to participate via NFT based memberships. The decentrailized-automonous-organization will allow its supporters to determine which teams and drivers receive financial backing. Membership provides access to the ‘perks’ of team ownership, including a racing helmet themed NFT.
Motorsports is about leading the race, staying ahead of the pack. By embracing the use of NFTs they will deepen engagement with the next generation of fans via the digital marketplace.