Blockchains and non-fungible tokens (NFTs) are making their debut in the vaunted halls of motorsport, with three top Formula 1 teams announcing unique ways for fans to engage with their favourite constructors.
Bahrain-owned McLaren became the first team in F1 to announce a fan token in partnership with Bitci, Turkey’s first native blockchain platform, at the onset of the 2021 season. They were followed by Aston Martin and most recently, Red Bull.
“In the coming months, we will launch our own official fan token, the first of its kind in Formula 1,” said Mark Waller, chief commercial officer of McLaren Racing.
“The token will work on Turkey’s first native blockchain platform, developed by Turkish engineers and software developers with Bitci Technology.”
For the uninitiated, NFTs are unique computer-generated codes that can be connected to a digital product and service, allowing them to be bought, sold and traded like other merchandise, such as clothing and car models.
It is a secure digital certificate of authenticity and ownership, stored on the blockchain, which enables video, imagery or any other type of digital item to be exchanged. It is possible for organisations that originally sell them – like Formula 1 teams – to take a cut whenever an item is sold, effectively creating the potential for a healthy flow of recurring revenues over time.
Unlike NFTs, which are designed to be collectibles, fan tokens usually are more rewards-oriented, allowing access to votes and merchandise. They are not unique or limited edition, in the way that NFTs are, so they’re fungible.
By using blockchain technology in sports to issue their own virtual currencies, teams and players can interact with fans while rewarding points, offering discounts, and creating a virtual ecosystem.
Tokens also give fans a sense of involvement in the team’s decision-making through voting rights – on initiatives such as celebration songs or training kit colours.
Fan tokens can also help clubs overcome the challenges of distance when communicating with fans.
Red Bull Racing Honda has come up with digital collectible NFTs on the Tezos blockchain, just like Aston Martin, which has sold 1,500 units of digital products, including 61 editions of never-seen footage of Aston Martin’s return to the motorsport after 61 years.
“Tezos will help us maximize our engagement with our fans through the development of NFTs,” Christian Horner, Red Bull Racing Honda team boss, said in a statement.
“This is a hugely exciting space in which we’ve been looking for the right partner and in Tezos we strongly believe we’ve picked a winner who will help us give our fans a new, unique and innovative way to connect with the team.”
Although the technology has existed for several years, NFTs have gained greater prominence during the pandemic, particularly within sport and art, as the value of crypto has risen and more people have been seeking out screen-based entertainment.
The National Basketball Association (NBA) has generated significant revenue from Top Shot, its digital highlights trading platform.
In the digital art world, the artist known as Beeple sold a piece of digital art as an NFT in March for $69 million.