Tokenizing Fandom, a New Era of Sports & Entertainment

Transcript

yeah let's sit uh let's sit according to the image and we can share we can share the two mics so I'm going to start us off with a round of intros um my name is Amanda casset AKA amanda. eth founder and CEO of Serotonin yeah good afternoon everyone my name is Thomas um I before I introduce myself thanks a lot for still being here uh it's such a humbling experience today with all these important topics and now we speak a little bit about sports um yeah regarding myself I'm in the midst of founding my own company so actually the name that is up there is sort of irrelevant soon um it's in sports data analytics I've been in the business the

sports business for a while now feeling that we need to do something about data analytics but there's also a web three side of things but we'll get back to that soon I think if you remember anything from me I'm the guy tackling things head first so I've done a few projects and I'm happy to share today hi my name is Alexandre Lloyd I'm actually working in um anti-money laundering for U hudler but I'm uh very excited to be on the panel and talk a bit more broadly about the impact of tokenization in culture sport I think and let's see if it it works oh surprise hi my name is Julian uh I'm the CFO of ches uh which is a web three company dedicated to sports and

entertainment uh we created I guess we'll talk about fan tokens which are web three membership for sports entities and uh hope we'll have interactive session so feel free to ask questions so we can exchange uh hi everyone uh my name is Celia I'm working at thinkport which is a B2B Association in the sport industry uh we're based in loan and uh I'm basically Innovation manager there uh I'm handling an innovation booster which is a program from inos SSS and I'm helping a federation or anyone involved in sport and physical activity to develop new ideas using day on thinking method and we have a budget also from

inos to help them and happy to be here really a new be on the web three topic uh we have a few stuff in the backyard but more to bring the Innovation and sport side to the table thanks everyone we have such super interesting people on our panel we'll make sure to uh have some time for questions at the end uh and have that interactive session but just to kick us off when you talk to a sports team or League or a big entertainment company about crypto web 3 tokenization what is the pitch what do you say to them about what they can do in web 3 why they should get into web 3 that wasn't

possible for them in web to I sort of felt that I'm going to be the first one to answer this super difficult question so let me start off by saying I'm quite sure that shulia you you're going to have a really nice use case to explain later on so my pitch would not be in your uh Direction I'm actually a fan of blockchain because I think it's governance technology so whenever I talk to federations in my projects or even sports clubs I'm always asking them do you guys have a governance issue that you want to talk about because at the end it sounds super dry but that's what we can blockchain really useful and I have some projects I can talk about later on but as I said it's a bit dry but it's essentially

what's working well for me with my projects we go this one yeah um I guess we'll just go in this direction because we already started but um so when it comes to tokenization my expertise would really be in like ownership design and the legalities of that because my background is as a lawyer and so I would say like look it really depends on how you want to engage with your fandom like you can use tokens as Julian's company has demonstrated to really engage um give special rewards you can also use it for ticketing for making efficiencies in your system but the great thing about

web 3 is you can connect these organizations directly to the fans where before there's not always been intermediaries so there's been stores who are the ones who sold the football jerseys there's been um sky for instance televising the competition so it's a way to really identify who your fandom is and with you hodler we realize the power of fandom because we sponsor toino I I don't just like wearing scarves when it's really sunny um and our social media manager was like we have really good interaction for a financial intermediary with our community and Community is something we understand in crypto so we might have five interactions on a

social media post as soon as we post anything that has Torino content you can times that by 10 there there's like a passionate engaged community and that's a way to really reconnect sure to to go back to the question on why web 3 um for us the way we position it was quite simple web3 unlocks a new way of um not only interacting with you fine as as as as you rightly mentioned is also even if you remove the sports element of it just web 3 enables you to get to create new digital assets that can be owned directly by people and transferred across platforms and across activation and to the to the sport entities what

were they were really first sport entities are really bad in technology so I think that the first step you go to them is discussing education uh so before you pitch anything you educate to the sports team because they are very very far behind when it comes comes to the blockchain and and crypto Vibe uh so you try to explain them that by creating a new digital asset that they will be able to unlock new revenue streams uh that didn't exist before and on our case one of the key accelerator was covid which is sometimes very unusual but like for sports club suddenly all the stadiums were empty so all your main source of Revenue disappears so then how can you reposition your business model in order to Target people that are actually not going to come to the

stadium so that's why if you create digital assets like it's always the same explanation that we take um if you were to guess who which countries as actually the most highest number of football fan it's not Spain it's not Italy it's China by far and China never go see a game because most of these Chinese users they will never be have the ability to interact with their team and go see a game so how can you engage with this remote uh users in a different way so that's why we decided to create digital assets that will only mostly target these teams that don't this user that don't get the opportunity to meet their teams by going to the stadium yeah exactly to to jump back on

Julian I think for most Federation um blockchain we3 is a black box so just going to them and saying uh this is great just try it it w't work also one big misconception that people do is to consider sport as a whole which is not the case actually into sports you have International Federation with many differences in size in technology Readiness as you said uh in budget in fund base Etc then you have National Federation and in between you also have the media the sponsor athletes clubs leagues Etc so all these word needs to work together so you really need to address them and really pinpoint their

needs and I think starting from The Challenge like what are the challenge you're facing uh really going in depth would really help and then coming with okay so you can actually solve your challenge with uh blockchain with web3 and then it starts to unlock possibilities but I yeah I think um the question does the sport industry needs weet three yes probably but uh all the first step is really to to identify what they're facing as a challenge and uh really go with a solution that they can understand that is solving the this

problem directly and that's basically the work we're doing at thinkport is to identify those challenges which is not uh a super easy way to to do actually so what I'm hearing just to synopsize are um web 3 for governance and web three to offer unique new fan engagement experiences that weren't possible in web 2 what I'm not hearing is come and do something in web 3 and make a ton of money real fast um and that was the motive I think of a lot of companies coming into the space in the first nft boom one thing that we really noticed at seratonin was we would be getting Outreach from the revenue officer or for

from people having to do with uh the company's bottom line and then it became the marketing lead because they wanted to market the fact that the company was doing something Innovative uh and then over time it became the uh the the cio's office Innovation people trying to figure out new ways to do crms and Target customers people trying to figure out uh you know what's the future and how do we offer people more engaged experiences but as that transition happened also a lot of that Outreach went away um and died down so that's been an interesting transition I guess in in that context what would each of you say are the success examples what is out there in market right now that

illustrates what's possible with sports and entertainment on chain um and as specific as you can make your examples that would be great what what does that success look like is it measured in revenue is it measured in number of transactions number of wallets and what are those success metrics yeah sure so I want to do a quick experiment to do this so looking at the audience who of you has engaged in sports or through sports with a web3 application with your favorite team or Sports organization I mean just raise your hand like properly engaged in some way or the other so we have probably the most educated uh um um ecosystem around here today and we have maybe five maybe 10% so you asking about success factors I

think Sports hasn't found its use case yet its proper use case I want to play Devil's Advocate a little bit regarding the the fan tokens to be honest with you do we really need blockchain for this to engage with the Chinese fans but you ask about success factors so let's look at numbers I mean everyone knows S rare I guess Sor rare is a familiar concept it's basically Panini pictures you know the Panini albums that we had as kids combined with fantasy sports super successful 4 billion valuation so I think that's the number so if you do it right and if you sell it right you can make a lot of money but I'm still not convinced that you need web 3 for it actually but we'll come back to that I guess in a second just on Sor less

valuation is 500 million so I guess it went down yeah it went down so just to Showcase that maybe the use case is not there on on S example um well I would think of the probably the most developed example maybe not in terms of numbers it's not you know FIFA that I've heard of is actually um sale GP which is a Challenger um organization to the Royal ocean Racing Club and they have basically come in and tried to revolutionize sailing they've they've put more emphasis on Tech they've put more emphasis on fan engagement more emphasis on so each boat will have 10 miles worth of fiber optic cables 30,000 sensors so really pushing Tech and what

they were they did is they launched the possibility for Dow owned teams fan-owned teams on the blockchain they launched on the neara blockchain so we we heard from um near yesterday at crypto Valley so they're they're represented here which is lgp not so much but they actually the first team actually successfully got funded no person they put built in restrictions into the the token release so no one was able to buy more than 200,000 so there would be no majority owner um that was successfully launched the first boat left um the first team was launched for the Bahamas and some Affiliated islands and you know that's they

really they had to think about it because it can't be a true doubt because when it comes to like the team's doctor and stuff some decisions not going to be taken by the token owners but you know I think it was like a it's a very developed idea and it's actually succeeded and it's a really interesting use case I sailing's not the biggest sport in the world but they've actually got the biggest viewing figures after the America's Cup which is really the biggest event and I I may be a bit invested in this because I'm a sailor but you know I think it's a really interesting case because it's very developed I also think that you know we don't just have we're not just here to talk about sport like you can look at three low the Australian DJ launching a royalties platform royalties for songwriting aren't Securities they

can already be traded not with tokenization but it allows for more transparency and more frictionless transactions exactly same thing we're talking about with cryptocurrency and you know there's been a lot of corruption in music licensing I mean we've all seen the Taylor Swift law cases and all of that so it's just it's really interesting to see these products which are more developed maybe not on scale yet but you know yeah it that you can just see it's been executed and well thought through and and it's it's not collapsed like the teams are actually going examples of U things things what's going well specifics what are the success

cases well I could be speaking about us but then that would be a bit dry so just because you're asking for some numbers uh we have on boarded over 150 sports team uh we have 2 million users uh we give back more than 500 Millions back to the industry in term of Revenue sharing as part of the of the partnership sales of fan token and others so we have helped the industry move into the the web three uh component to go back to the example of do you need fan tokens I would say if you use them only on one app as it used to be the case initially potentially with socios.com like three four years ago uh you still on a web 2.5 element meaning you can only activate your fan token in one place then I will agree you don't necessarily in

blockchain because anyway you're centralizing the deactivation that's why in the end we we move our CH chain from a L2 to L1 so then when you now with your token you can activate your token you go on Atletico Madrid we announced it last week you go on the at Atletico Madrid website you can activate your fan tokens that will give you uh discount on something that you're going to buy directly on the website you go you go on Nike on any other sports equipment soon you will be able to activate your fan token as well and then you will get rewarded because you have this inter this specific interaction with your with your Club so this element of what's what could be missing is the ability that you need to be able to transfer and activate you asset across different platform to

truly benefit from the web three component which is ownership and transferability of of digital asset that will be the that would be my for me that's the key success factor in the in the web three element just a sec to to respond to that I mean that's an extremely nice way of explaining it and I I appreciate it and I think that's exactly what I meant by by talking about governance at the end governance is identity ownership um it may be payment too I mean how it's it's being done Etc and that's exactly where the value lies so um you know hats off to you guys I mean that's uh amazing that you did that and just believe me there are so many

different governance cases in sports and the cool thing about sports and that's what you explained it's a nice place to start something big like you can make ownership of a boat team or even of a sports team potentially fan owned it's possible I mean we're not talking about owning a bank or whatever so that's the cool thing about sports so if you're ever into into finding a niche to start something cool I mean Sports is definitely the place to be but you still have to think of real use cases and not just use web 3 because it's a hype right now and I think we're seeing that with the nfts by the way yeah and just to to slightly slide on to that last remark about governance um as the uh compliance officer on the

uh panel I just had to note that actually the interesting thing about the fan AIP in that use case I was talking about SGP it's like 5,000 a token I think but the interesting thing is they've actually gone and engaged with the SEC that da is actually registered with the Securities Exchange and it's nice to see a token where they weren't just running away from it being labeled as a security and they were actually using it for fundraising it's actually a demonstrating it's actually a viable mechanism and you know we all have seen issues in regulation in the US us but you know it's it's a clear use case in which actually they're very comfortable with multiple um regist owners and you have the Green Bay Packers who've been for 200 years I mean

you can't do it in the NFL anymore because the state's got you know a bit upset with that and they there's now no more than 30% of a team other than the green and babe hackers can be owned but like they've done it they've opened up a team it's a security they can trade it they can you know use the senses to monetize the boat to improve the efficiencies so yeah I was just like interested to see they haven't been afraid of engaging with regulators and you know this is an actual fundraising and financing mechanism and it's been demonstrated so you bring up us to a interesting spot talking about regulation uh to the next question I was planning to ask you which is challenges

that uh some of these sports and entertainment projects and use cases face when getting into web 3 um what do you think the main obstacles are that are preventing some of these teams leagues projects Founders companies investors from getting into the space and how do you think we surmount them um yeah I guess I can speak on the on the sports side so what we realize when we're launching Innovation uh we really need to like take people from The Challenge side so it always work better if you say okay we will talk about this come during a session we'll discuss it with the experts and we will see what works what don't Works uh we will

co-create together so what we do and that's really helping is to have a common a common uh talk and really say the basics so that's what we understand on the topic that's where we are now and that's where we want to go so it always help and also having people discussing a topic with experts during for example an entire day for Workshop it really build trust and that's really help in going in the right direction so I think as we already said like sports is kind of uh moving slowly and people are really risk averse so you really need to bring them in the topic uh step by step and then um by building this trust and going into

the web through Direction then we start like going into what where we want to go but really um like like the web3 the blockchain it's a it's not a goal on itself it's really a way to reach uh something and to solve a problem and wherever you the problem you have if you it goes through web read blockchain it's fine if it goes with on another way it's also fine but um yeah it's U always useful to to like hook them and then uh go yeah go forward with uh with the topic so I actually had to play pleasure to be supported by Celia and her company so we started a so-called web 3 for

sports data Innovation booster and one of the key learnings uh was actually the proof of concept that we were able to do afterwards it was about identity so we established the proof of concept for a running identity which sort of solved the problem of being an completely scattered community in the digital world so the running community in Switzerland 400,000 people going to races events every year is in the physical world they're all super nicely unified but as soon as it comes to the digital world they're totally scattered they lose them to these digital platforms like straa you may know them or others so this was really their Challenge and by introducing this running ID concept we

did the first step to actually solve them this problem uh what was also cool and that's maybe another thing to mention here quickly um we were able to link this running ID to something that the Swiss government is actually right now establishing so we build it on the self- Sovereign identity principle uh with Tim we have someone in the room here that helped us from the the university side so the cool thing is we try to combine different things even bringing together different worlds so we have the government world with an electronic identity based on the self- Sovereign identity principle which is not a crypto wallet wallet you need it's another wallet as you may know so trying to bring all these things together uh

with we benefited a lot and that's definitely the way to go so be pragmatic basically and that's uh what what you saying by making it not the goal but just a means to an end the we you want to get back to the question challenges that are sorry for that so what I actually wanted to say is just Tech is less important than culture so basically you have to build that culture first you have to need to build that understanding first you have to understand the problem and then we need you guys to give a solution with web 3 I mean I would go back to what you were saying earlier is that there's been a a kind of um dis abusal of trust uh just because at the moment at at the

Inception of the like nft entering popular culture there were a lot of people coming in just trying to make a quick Buck like we have this week um in the US there's a class action lawsuit Brown versus doter and gabana and they that was an experiential it was an entertainment thing they were supposed to be going to events and shows and also getting like real world like fital they were supposed to be getting real and after two of eight they just closed the token and ran away and and they've basically been accused of a rug poool um and so there there is that lack of trust that you brought up earlier we we all have heard and also just bad ownership design you know people releasing nfts

where you know essentially it was a receipt for nothing there was no there was no specific license or in some cases there was such a restrictive license that people then were sold one what Mis advertising basically but then I would also say you know I think there's the question of is it an experience the fans actually want do you know who your fans actually are do you think your fans are 16 year olds when they're actually 65 year olds is like are you targeting Esports fans who are like I can get that already you don't need to sell it to me on a on a blockchain um I think that's probably something that Julian would know more about but yeah in terms of it's just the lack of credibility um and also you know popular culture has moved

on to AI at the moment because you you're going to push us to give us the answer so I'm going to try to give you the concrete answer that you want in in a bullet point list because I can I see that's what you want so I would say number one is education that's what was mentioned like they don't the sports team or any and that's not necessarily sports but like people don't understand what web 3 is and how they can use it second one that was well explain as well is that you need to have the right tools and Tech to make it feasible uh metamask is great but still my parents will never use metamask it's too difficult it's too complex it's too scary now that we move to account abstraction and other type of stuff it's coming so it's easier but you need to

give a bit of time to to the tech to become user friendly enough to go to mass adoption uh regulation rightly mentioned as well CU you we all in this space experimenting and then suddenly the regulator might wake up CU not all regulator are as pragmatic as the Swiss one and FMA is going to hold your hands and discuss with you open a Sandbox approach where you can make sure that you can experiment together and not Sue you two years after like the US will do it so I guess these three elements are are really key and to to close it off is we have seen but we should not be too harsh on the sports web 3 Industries like just pull use cases or use cases that didn't bring any value to the user can be a rock plot can be an nft

collection that you cannot activate but that you see it in any any industry any new technology that comes into life bring inside a very very cool project and inside of very very bad project just use internet like look at what you see online yeah I think these are all great points um there's some tech hardening in maturity there's some need for discovery of product Market fit use cases um and of course there's the regulatory uncertainty um I think also it's an interesting point for the future as more value comes on chain once value is on chain there are penalties to taking it

back offchain and so when you just have more disposable income and more fans and more purchasing power on chain then I think you naturally get more customers for these kinds of like web 3 onchain experiences with whether they're with their favorite artists their favorite sports teams what have you and so I think we're going to see a lot of that migration um accompanying where the demand and where the disposable income is located and that's a kind of positive Tailwind behind this um I guess we've seen so many different kinds of projects attempt this I'm curious when you talk to companies or teams or leagues that are going to attempt to get into web 3 what are the pitfalls that you avid them

to avoid um how do you make sure that they don't do it wrong don't be shy guys we all among friends it's only crypto people here it's only cool people uh on our case what we did um step by step team by team so we we didn't try to launch a solution that will be you don't impose a solution the same way to all the different teams because each team uh they all believe they're different and is actually quite true uh they don't have the same type of fan base they don't have the same technological maturity they don't have they don't face the same demographics so it's really and that's what a lot of people always

accuse blockchain or web through is doing is trying to find a problem in which web three is going to fit so for us it's more do it the other way around what will be the value proposition that you offer to the club and if actually web3 makes sense then use it if you don't do it without web3 do it without web 3 so don't don't be a an extremist or maximalist of of web three uh just make sure if you need to keep it to for the success will be that people don't even understand that fan tokens are crypto or web three like you connect you use them I don't need you to understand that it's web three if for you it's working and it's delivering the the the value that you need and yes from a technological standpoint it needs to be web three but you don't need to

understand that it's web three for me that will be the the success the the tech to become invisible in that aspect just to add on that I think it will be important to know where the power is in the sport ecosystem which mean who has the right to unlock or the the the opposite uh if the solution is put in place so sometimes you think it's the Federation sometimes it's not sometimes it's a sponsor sometimes the media so you really need to understand how that value chain is made and then really tackled and on board the stake the right stolder uh to make sure it doesn't uh go up up up and then fall because you

didn't realize there is a glass ceiling sooner than than expected yeah I would um like just adding on top of both of what they're saying I think a lot of importance should actually be placed on on the fact the web 3 you shouldn't you don't need to be announcing that you're using web 3 web 3 should you you should be using it because it's actually actually like you're getting more frictionless transactions or you want the transparency you want to avoid the the like corruption that has plagued certain Sports um organizations you know there's there's use cases but also at the same time we need to learn from the existing

industry you still need to study your Market you still need to know who your fans are whether you're an artist a musical artist a sports team you need to understand your fans and how you're making their lives easier because fans like culturally they will turn on you if they think you are taking advantage of them like they will not be quiet about that we can see that in the crypto Community if people think that you know someone is taking advantage of them be all over Reddit all over Discord you know that there will be chat in the the corridors of conferences this is like fundamental is like the same way that we learn in

implementing crypto travel rule from the original like Swift payment mechanisms the same way is the same way like in if you're doing marketing if you're tokenizing royalties like these legal problems have been discussed before and you should only be using web 3 if it's actually making delivery more efficient and and yeah a lot of people aren't aren't actually paying attention they're just trying to use it and they don't don't understand what they're using and then you end up with these projects selling nothing or just collapsing because there was no desire for it so just to add up on this so the the word fundamental I think is key here I mean it is fundamental so you have to

understand your Market but I experienced in many of the projects that when you tackle the fundamental problems of an industry you always run into a collective action problem because with blockchain you can solve fundamental stuff I call it governance I mean whatever you want to call it you can you can solve it however it's not a big investment case and I think some of you may know what I'm referring to at the end you want to you want to optimize things you want to use those smart contracts like the entire toolbox The Tokens The Smart contracts the wallets but it's all not a great investment case in itself so this is a big challenge but the good thing in sports you always have governing bodies some of them have money

like the international Olympic Committee or big Sports federations so when you face those challenges you need to convince these big nonprofit governing bodies to actually see it as a way of developing the their Sports and then you can Prevail basically one last lightning round question uh before we turn it over to the audience for some Q&A um super lightning what is your prediction for what's going to happen this year at the intersection of sports and web 3 I want to see a solution for the current ticketing pricing issue in uh let's say in soccer so fans they feel that they have to pay more because clubs wants to

make want to make more so I want to see a project that actually tokenizes a club so the fans can be in charge again but for this the clubs do actually want to embrace or have to embrace this idea and I haven't seen that yet except for sailing wow new cases every day well um in terms of ticketing it doesn't just have to be on Club ownership we've all Luma has been doing ticketing for even just events around crypto Valley Conference and so maybe just you know seeing more um more companies like using that foot ticketing would be good um I think we'll see well we won't see because it will be behind the scenes but

I think in terms of predictions for this year I'm going to go small and say that you know image copyrights sport licensing behind the scenes these are very messy legal contract contracts like image rights don't even exist in and of themselves in many countries they're just constructs of contract law so I think we'll see more tokenization of that just to try and keep track of the multiple parties that are involved in image rights in broadcasting like it's it's a fundamentally complex thing like you have the individual players or artists have the right to their image the club or the venue the stadium if it's an a away team like if if it's a

like an artist performing at a stadium or a gallery like who has the rights of broadcast of the images that are going to the newspapers everyone has a share and it's just a it's already being implemented and it's a way to keep track and I would say that that's probably like a manageable you know I'm a lawyer I'm going to be reserved and uh say that you know I I think that that's probably where we'll see some concrete development yeah I think I will go so with the athletes getting the power back to them who owns the the data and um I think it's rising like more and more athletes are asking what do you do with my data so I guess uh there will be and

it will move in a in a direction or another but I think it's going um in the right direction and uh for them to really know what's going on and where the money is uh coming and if they can have a share in it that would be that would be great this year I hope that we finally get Mika to go through speaking about regulation that will give a lot of clarity for the European market uh for sure uh interoperability of the chain more and more uh consolidation of the chain so what we call m&a of tokens that's what chains are you building on by the way ch's chain oh you're building your own on yeah we have our own chain chain now we we used to be no it's it's

a fair question we used to be um we used to be a L2 protocol build on evm compatible BNB chain but now we switch to our own chain more than 18 months ago uh but still evm compatible or No Yes I want to say of course but it's not some people might disagree but yeah when you want to attract developers and the tooling it's way easier to remain evm compatible the one that didn't do it it's it's a bit more tricky ke uh to to drive adoption to drive options uh so interoperability and consolidation of uh of chains amazing well I think we kind of blew through our time that we had for Q&A in order to get the last uh remarks from our panelists but I'm sure

everyone's going to be around after if you want to meet them and ask questions um thanks so much crypto Valley for having us come and speak uh for hosting and thanks to our audience and our panelists