Understanding the technology that is hidden behind Tokens is not rocket science. But it’s not a piece of cake either. One of the essential skills you need to have to successfully implement Tokens in your sports organisation is recognising the difference between:
NFT – Non Fungible Tokens and FT – Fungible Tokens.
Sports clubs, leagues & federations may benefit from creating Fungible Tokens – FT – and Non Fungible Tokens – NFT. If you want to know how to implement both of them in order to maximise your success in the sports industry, you’re in the right place.
Read our article and get the answers to all of these questions:
What is an FT?
What is an NFT?
Which one would fit your sports organisation better?
Is it possible to combine FT & NFT?
Why is recognising the difference between FT and NFT so important?
FUNGIBLE TOKENS – FT
What is an FT? │ What is a Fungible Token?
Fungible Token – FT – is an entirely interchangeable digital asset working similarly to currencies. The pivotal characteristics of Fungible Token are its:
Fungible Tokens are fully based on blockchain technology. Their fungibility means that they can be easily interchanged with other Fungible Tokens of the same type. Putting it in the mathematical expressions, the term “fungible” means that:
1 FT = 1 FT 1 FT + 1 FT = 2 FT
Fungible Tokens are divisible because you can divide them into smaller units, and they will still possess the value for their holders.
They’re also uniform because every Fungible Token of the same type is identical to each other in its specification.
Sports Clubs’ Strategies for Fungible Tokens
Sports clubs, leagues & federations can choose from numerous wide-ranging strategies to maximise their Fungible Tokens’ utility. It all depends on what’s their primary goal. When it comes to tokenisation, we usually differentiate between:
enhancing fan engagement,
improving fan engagement monetisation,
bringing innovativeness to brand’s image,
strengthening relationships with partners & sponsors,
unlocking new revenue stream,
or keeping all supporters in one network.
Depending on your organisation’s final goal, you need to decide whether to implement Utility or Security Tokens [both are FTs]. Fungible Tokens constitute an awesome opportunity if you’re able to deliver exclusive “items” that are sincerely desired by your community.
Exclusive access to the network? Exclusive products & services? Exclusive rights or decision-making votes? If that’s what your community or organisation needs, Fungible Tokens are a perfect solution. They will work as a currency that people will need to have to become part of “the exclusive group”.
Non Fungible Tokens – NFT – are unique digital assets representing ownership of tangible or intangible items. The essential characteristics of Non Fungible Tokens are their:
Non Fungible Tokens are entirely based on blockchain technology. Their non-fungibility means that they can’t be interchanged because each of them is digitally unique and has value only as a whole.
1 NFT = 1 NFT 1 NFT + 1 NFT = 2 NFT
The above mathematical expressions do not apply to NFT Token.
NFT is non-divisible because it has value only when we have it in its original, complete form.
Each NFT is digitally unique – even if two Non Fungible Tokens represent “the same” item in reality.*
* What do we mean here? Imagine that you have produced five of the same T-shirts with the image and signature of your fans’ favourite footballer. You decided to tokenise them – they became NFT Tokens. In that case, each of these Non Fungible Tokens will still be digitally unique, non-interchangeable and non-divisible, even though in the perspective of customers, they might represent the same value.
Sports Clubs’ Strategies for NFT
/What are non fungible tokens used for? How does non fungible token work?/
NFT – Non Fungible Tokens – constitutes an excellent opportunity for the sports organisation which would like to implement digital collectables for their community. NFT Token works almost like a certificate of authenticity for tangible or intangible products.
NFT distribution in the sports industry may also be very helpful if you constantly need to fight with people illegally selling fakes of your merchandise. Thanks to digital transformation, blockchain and tokenisation, soon everyone will be able to verify the authenticity of the products they purchase.
When it comes to NFT utility possibilities, we usually differentiate between:
digital representation of assets,
certificate of authenticity,
element of gamification,
Whenever you want to share something digitally unique with your supporters, Non Fungible Tokens are one of the best concepts to think of.
NFT price varies significantly depending on the value it represents. The very well-known “liberal forces” of supply & demand have the greatest impact on setting the final NFT cost. Therefore, it may make sense for you to create your own marketplace in order to control the flow of Non Fungible Tokens produced by your organisation.
COMBINING FT & NFT IN SPORTS CLUBS
Do sports organisations need to choose between Fungible and Non Fungible Tokens? No!
You can combine them however you prefer. It depends only on your fan engagement strategy to decide what’s the best scheme for you. What are the examples of combining FT & NFT?
First of all, you can independently implement FT and NFT Tokens that have nothing to do with each other but are sold simultaneously by your organisation.
Another possibility is to make your Non Fungible Tokens be purchased only with the help of your Fungible Tokens so that the demand (thus, the price) for the latter is greater.
Creating your own marketplace where you will sell both FT & NFT Tokens and control all the forces acting on it? Possible as well!
Making a design of your Fungible Token become an NFT to sell? Why not – you can do it, of course!
The endless opportunities that FT & NFT Tokens create make them become a very important tool to consider for sports organisations.
WHAT’S THE BEST TOKEN STRATEGY FOR YOU?
There is no unique answer for such a question!
Each sports club, league or federation is different. All over the world, we have different communities with different backgrounds, emotions, habits, financial resources and willingness to pay for digital assets.
Whatever organisation you represent, remember to adjust your strategy to the market you want to operate in. Do not copy already existing solutions one-to-one without much consideration. It’s the easiest way to fail, so be careful!
The difference between Non Fungible Tokens – NFT – and Fungible Tokens – FT – is essential because it has a direct impact on the sports organisations’ fan engagement strategies. Understanding it allows you to take the right steps for your future development with tokenisation.
If you would like to know more about what TISA can offer you, check our CLUB TOKEN website or contact us directly. We will be happy to discuss your case!