Tokenizing Sports: Bringing Real-World Assets On-Chain with Ethereum

Transcript

[Music] Hello everybody. So um welcome to my presentation. So I'm fan um Jonathan. I'm the founder and CEO of of Phantom. Before we start uh one or two quick questions. So who of you is enthusiastic about sport? Um maybe raise your hand. Okay, that's 70%. And who of you have already invested in sports? Um, either way, like NFTTS, fan tokens.

So that's less than 5%. So that's a perfect target group for me. So with Phantom, we are bringing the sports world on chain. Um, before I start, I will quickly start with a quick teaser. Uh, if it works. Okay, it doesn't work. doesn't matter. Um so tokenization is um obviously changing the world of finance, right? So it's expected that over the next 5 years that over 10% of the GDP will be tokenized. Um and in sports you have over 250 billion of sports assets which will also be affected by tokenization. Um and at the same time you have over five billion of sports fans with access to smartphones who can

also with tokenization then participate in that asset class they are passionate about. Um and what is tokenization? I think I need don't need to go into detail here. So it just simplified it means that you digitalize a real world asset and bring it onchain to make it both investable but also tradable. It has a lot of advantages compared to traditional finance such as um tradability, 24/7 liquidity, but also you can offer fractional ownership. That means you can um split up a big asset into many different different pieces.

Why it will play such an important role in sports is because of um first of all there's a big financial pressure pressure in many sports um on on different levels. So if you take the athlete level, you can um look at sports like tennis, golf, um Formula 1, racing, right? So these are sports which are very expensive to be done especially early on and then in many sports there's like no money to be earned early on in a player's career, right? So sponsorship money is not um enough yet and that's why there's a financing gap. Even in sports like tennis, Carlos Alkaras um a few years ago he had a financial gap. So he was looking for funding because he couldn't cover the costs. Um and also

football, if you take football clubs, obviously here we're in France. So Lupin Leon who just got relegated because of financial issues. You see that even like very successful football clubs are struggling financially. Um at the same time there are a lot of illquid assets um available in sports and this can include like stadium infrastructure revenue uh revenue um which are going to be generated through different means and with tokenization um you can unlock this these liquid assets and unlock it for liquidity. And last but not least, you have these like 5 billion of sports fans, right? Who can also turn into investors and invest in their passion um and support your club or their favorite club or athletes they believe in. And

with Phantom, we have built the first really the first sports investment platform um where you can invest in a tokenized way in sports. And on the sports side, athletes, clubs, teams, they can list tokenized um assets um on the platform to make them investable. And these um tokenized assets, these are rights, right? Which can represent anything from like future price money earnings. Um a player might might be earning um over to equity, tokenized equity where you buy a token and that token represents the same economic rights like a shareholder in a club or in the team. um over to like just traditional tokenized bond where you buy a token and that token represents a specific annual yield um you can earn

over some time. Um everything is handed through smart contracts. So payment goes uh P2P um uh wallets are being set up um and also compliance and and asset manage management is completely digitalized and then as an investor you can build a portfolio of different assets. You can invest on the athlete side in um the success of future upcoming um players in sports like tennis, golf, um racing etc. and participate in their future earnings coming from prize money earnings coming from sponsoring earnings. Um and then on the club side you can invest in the equity. You can invest in transfer revenues being generated uh revenues coming from a youth academy for example but then also stadium infrastructure. So

it's pretty diverse. Um and um the idea is obviously that you can build up a portfolio across different assets and different types of products. Um from a tech technology point of view, we have um tried to abstract any like crypto complex crypto layer. Um so our target um users um we have around 6,000 verified investors on the platform. They are mostly just sports fans, right? So they have been not active in in crypto before. So um we are it's built on Polygon as a layer 2. Um we are using uh prey for non-custodial wallet solutions.

So you can just easily sign up with your email address u a wallet is being created and then you can top up your wallet um with USDC um using using moon pay um and then uh you can invest in in your favorite um athlete club um or team um from a sec regulatory point of view and I will not go into detail because I don't want to bore you um but obviously this is an important area. So it's a security tokens where we are using different exemptions across Switzerland and and Europe um um for like different offerings. So it's usually up to 8 million per year a player or a club can issue with like light prospectors requirements and yeah we help obviously here the athletes and clubs and and teams to comply with all relevant

regulatory points um of you. Um the platform is live. So we launched it um two years ago and in tennis to build this like first showcase um of tennis players. So um in tennis we are the go-to player financing platform um where upcoming tennis players in the age of 14 to 23 years old uh go to when they need financing. Um so we have 30 tennis players live. We only launch a selective um we're pretty selective in who we launch, right? There's less than 10% of the players who approach us. We work together with all the relevant tennis agencies representing these these tennis players. These tennis players have raised um a million from yeah different investors. Um so as I said it's mostly um sports fans right who are have a

passion for that sports but then also high net worth individuals who are kind of building that as an asset class. Um and um yeah over 200k now already um has been also already distributed back by the first tennis players who already got successful um to investors. Um this is just one example. So this is Tristan Boyer. He he launched I think a year ago. So he raised um uh he was 23. He just finished finished college tennis and um then he needed like one year in kind of to improve his ranking to get into the prize monies and he needed 100k a little bit more and in return he was offering 6.5% of his prize money. Um the payment structures or payback structures is always similar. So you as an investor

you participate for six years and it starts in the year when the player gets into top 150 um ATP. Um so that's when the payback starts and then on a yearly basis the player is paying out investors um based on the official prize money um which is displayed on ATP or WTA. Um the returns um every player is vetted by tennis experts right so we have we're working together with coaches etc who always give an subjective estimation on how the player what potential the player has something usually between top 50 top 100 and then if the player develops like the projection then the goal is always as investor that you make around 30% IRRa over six years that leads like to four to 5x mo um on your on your capital

but you can also obviously 50 60x X your investment if the player really breaks through or you can lose all your money if the player never becomes successful. Um as an investor you get also non-monetary perks. So next to the prize money the you you can request tickets right we had the first tennis uh first investors being invited to Gwen Slams Roland Ross uh Wimbleton last week um also Australian Open digital coaching sessions uh video calls with the players after if you invested a certain amount um but then um also um exclusive updates on a on a telegram in holders only channel um yeah so what's next for us um um we don't have much time anymore so um We're going to expand um to football

clubs and esports teams now. So um we have the first clubs and and teams um signed and confirmed. Um obviously for clubs they don't have price money or relevant price money. So for them it's different types of types of offerings. So um it's equity tokens where you buy an equity token and then you have the same economic rights like a shareholder. So you participate in uh dividends, you have exit proceeds. Um revenue share tokens are another category where where you um just pre-inance a certain revenue stream um from let's say broadcasting revenue transfer revenue whatsoever and then you can pre-inance that um and then um use that proceeds in order to invest in that category and then also bond tokens where you just tokenize um a bond

right and then you have a fixed interest rate um over some sort of um duration. Um yeah, our goal is um obviously to kind of you know um um you unite the the sports world, right? because we believe like sports just have such an important role in society and um there's a big risk in sports because of institutional money flowing in private equity for example buying into NBA teams and there's a big risk that fans kind of disconnect because they don't feel that they don't have any uh thing to say anymore and I think by um uh offering them the option to also financially participate yeah in these kind of deals and also partnering with institutional capital partners we believe we can kind of improve um the sports world by making

fans more engaged and giving on the other side athletes, clubs, teams a new form of financing to to stay and or become um competitive. So yeah, so that's that's it um about Phantom. So if hope I could convince a couple of like new sports investors. So if you're passionate about RWA um or sports, feel free to reach out, check out Phantom and then hope to see you on the platform soon. [Applause] At the end you mentioned, sorry, at the end you were talking about fans feeling like they have nothing to say anymore.

Uh, which actually reminded me of decision-m. So, was that topic ever raised as one of the perks that a fan could potentially access through tokenization of of sports teams for example? Yeah, that's super interesting topic. Um, I think that's ultimately the end goal, right? So that not apart from financial participation, you also have these like governance um benefits also included um and and giving fans more more more yeah more options to to vote or to to decide on certain things. It comes with caveats, right? So it it's obviously there's pros and cons. Um but um ultimately our goal is to really engage fans, right? and bring them closer to the sports they love and and if it's through financial participation or then also voting governance in in a

later stage that that's that's cool and yeah would be hopefully added then over time. No we don't have time please if you have more question you can continue outside the room. Okay. Thank you very much. Thank you. [Music] Thank you. [Music]