This is the second post of a three-part series about how blockchain technology will improve the sports industry.Each part discusses new and exciting trends at the cutting edge of blockchain technology and sports. A token is an entirely programmable digital asset that can represent anything, including shares in a bond, ownership of a piece of real estate, or participation in an investment fund.This isn’t a new concept, the Green Bay Packers have a publicly traded stock.Generally speaking, fan ownership does not provide real benefits to the fan, other than bragging rights.All of these could be possible through an individual’s blockchain-enabled fan wallet, accessible through a mobile app.Liquidity is a term that refers to the ability to turn an asset (real estate, stock, etc.) into cash, the most liquid asset.
Therefore, these assets usually have a liquidity premium making them more costly and challenging to sell.
One of the most exciting potentials for tokenization involves fractionalizing a major or minor league sports team.
There are millions of fans who jump at the opportunity to be partial owners in a sports franchise.
In return for the initial funding, successful athletes could pay fans interest on their investments, potentially in the form of a dividend or income service agreement.
Funding and sponsorship of athletes already occur through Go Fund Me’s, family members, and other grassroots campaigns, but tokenization enables fans to get rewarded for their faith and capital provided to athletes. There is still a significant earnings gap between the average athlete and the few well-established, contracted ones.
This can be achieved by tokenizing the funding journey.