2023 has been a year of transformation for digital sports collectibles.
Several widespread attempts to combine crypto with sports entertainment failed to catch on; more than a few Web3 projects have adapted or restructured their offerings, responding to changing demand in real time.
But there is a silver lining. Sports platforms that focused on fan culture proved surprisingly resilient. New platforms focused on gamified experiences found their footing, and in some cases, significant growth. The truth is, most fans don’t want to become team managers through tokens; they are looking for connections with their favorite players and new ways to experience the game they love.
Here are three insights from the world of Web3 sports in 2023.
Crypto fantasy tokens first burst onto the scene nearly half a decade ago, promising holders a variety of benefits, including team voting rights and exclusive access to content. However, most of these benefits have not been realized in a meaningful way, which has fueled criticism from fans.
This year, Tottenham released their own fan token, but experienced the same community backlash as that of other European football clubs that were early to the fan token game, including Paris Saint-Germain and Juventus. Participating fans felt excluded from the club’s decision-making, and speculation continued to take precedence over genuine involvement. The British Parliament even went so far as to publish a report criticizing British football clubs for promoting sports NFTs tied to illusory perks.
Outside Europe, however, several football clubs have begun to promote the concept of fan tokens through more ambitious forms of community governance. Avispa Fukuoka, a Japanese football club in the country’s top J1 League, transitioned into a full-fledged decentralized autonomous organization (DAO) in February. This model gives Avispa members much more decision-making power than the programs we have seen in Europe to date, and several other Japanese soccer teams have followed in Avispa’s footsteps and adopted the DAO model.
The year also offered additional hope for fan tokens in the form of full-contact experiments. Karate Combat, a live martial arts competition set in virtual environments, this year began transitioning their organization into a DAO run by both athletes and fans.
And while previous sports DAOs like Krause House have yet to realize the ambitions of their members, this new generation of DAO-certified sports clubs could signal a broader movement toward bolder, fuller forms of community governance. In short, although many have not fulfilled their initial promises, it is still too early to count down fan tokens.
For many sports fans, collectibles are much more than digital objects; they are part of their identity as fans. This deep connection is one reason why digital collectibles have seen continued success among sports fans, especially when combined with gamification features.
Despite launching during the 2023 bear market, the release of NFL Rivals is a prime example. The game allows users to build virtual teams using NFTs of NFL players to compete with other fans, gamifying the process of collecting and trading these collectibles. These NFL collectibles also unlock exclusive in-game events and rewards, further immersing players in the world of football.
This is also why in 2023 there were a number of platforms focused on improving access to Web3 experiences, through products like commemorative cards and free-to-play games. During the 2023 baseball season, more than 100,000 commemorative tickets were redeemed by baseball fans on Candy Digital. To celebrate the MLB playoffs, the platform launched a free game for baseball fans, offering fans a new opportunity to experience digital assets.
This two-pronged approach reflects recent developments within the Web3 gaming space, and over the past year both the sports NFT and Web3 gaming industries have become more accessible and fun for “crypto-curious” audiences and no-coiners alike.
In addition to digital collectibles, major sports leagues like the MLB and NFL have gone big this year with new Web3 locations and platforms aimed at connecting fans with each other and their favorite players. Even though most sports entertainment is consumed from home, socialization and community building will always be at the core of sports culture.
To that end, MLB became the first major sports league to launch a virtual ballpark in their own metaverse this year, providing an interactive setting for fans to gather during live baseball games. The virtual ballpark’s first live event included an NFT scavenger hunt and other Web3 activations, demonstrating how Web3 can also be used effectively in real-world sports environments.
Read more in our opinion section: Sports betting is the real killer app of crypto
Not to be outdone, the NFL Alumni Association is working on a new initiative that will allow former athletes to create their own Web3 experiences and connect with fans. While this new platform is still in development, it is expected to include digital collectibles and metaverse interactions.
Based on the results of Deloitte’s 2023 Future of Sports Fandom report, fans may be increasingly attracted to these types of digital platforms. With the majority of respondents expecting home sports entertainment to be more interactive, immersive and easier to access than it is today, this year’s Web3 activations certainly raise the bar for the industry.
The Web3 sports projects that have seen success have taken the lessons of the recent bear market to heart: building experiences that connect fans with their favorite players and allow them to experience the game in new ways. As these platforms show us, digital ownership can unlock something transformative for fans: the ability to create your place and your legacy on the field.
Clearly, the goal is not to get sports fans into crypto, but to unlock new forms of entertainment and engagement powered by Web3 technology.
Scott M. Lawin is co-founder and CEO of Candy Digital, Inc., a next-generation digital asset platform for sports and culture, delivering authentic objects and experiences that deepen fan engagement and connect people to their passions . Before launching Candy, Mr. Lawin founded Parametric, LP, a private investment and advisory firm focused on early-stage opportunities in blockchain, fintech, art and real estate. From 2010-2017, Mr. Lawin served as Chief Operating Officer of Moore Capital Management, a $15 billion global alternative investment management firm. Before joining Moore, Mr. Lawin was Chief Operating Officer of the Liquid Markets business at Fortress Investment Group after a 12-year career at Goldman, Sachs & Co.