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How and why big stars accept tokenization

June 25, 2020

In the past two years, the cryptocurrency industry has undergone a paradigm shift as developers, projects, and users You have started to apply blockchain technology to increasingly innovative and fascinating use cases.

Among them, tokenizing artists, sports stars, and great personalities is one of the most unusual trends of recent times, as traditional sports, entertainment, and modern technologies like blockchain seem like an unlikely couple. However, Tokenizing sports contracts, intellectual property in sports, stars and players is actually the next logical step in the development of blockchain use cases

What exactly is “tokenization”?

In a sense, using blockchain tokens is a way to create a digital representation of a right using a blockchain ledger (the right can be the property of an asset or any type of negotiable right). Similar to stable coins like the Universal United States Dollar (UPUSD) and Tether (USDT), rThey represent ownership of an $ 1 asset in the hands of Tether. Tokenized rights represent rights in / from systems.

How and why big stars accept tokenizationHow and why big stars accept tokenization

These digital representations of tradable rights, referred to as tokens, can be easily transferred between people, as can sending a payment in Bitcoin (BTC).Essentially, it allows anyone to buy, sell, and trade practically anything without having to turn to in-market brokers and original token issuers. Therefore, they have greatly reduced market friction. In addition, token rights can be integrated into all systems, which enables unlimited integration.

These tokens are generally created through smart contracts in the Ethereum blockchain with different smart contract standards – ERC-20, ERC-721, ERC-875, ERC-1155, ERC-1400, etc. Depending on the type of rights granted tokens, token issuers choose different rules for smart contracts for consumable, non-consumable, or semi-disposable tokens.

Non-consumable token smart contracts have been used to give real estate, art, stocks, cars, and more than tokens. It is rapidly gaining popularity to bring sports personalities and celebrities closer to their fans while opening exciting new opportunities for investment and entertainment.

Spencer Dinwiddie announced his contract

Perhaps the most prominent example of a symbolized sports contract was earlier this year when professional basketball player S.Pencer Dinwiddie has topped part of its $ 34 million contract with the Brooklyn NetsThis creates a unique tokenized investment opportunity that was carried out on a platform called Dream Fan Shares.

Dinwiddie essentially split part of his contract with Brooklyn Nets into 90 SD8 Professional Athlete Investment Tokensthat can be purchased by accredited investors for $ 150,000 each. This way, Dinwiddie can access up to $ 13.5 million of its three-year contract, $ 34.4 million in advance, while investors You will receive a token bonus that pays 4.95% APR – paid as a one-time payment when due.

By providing an interest rate of 4.95%, Dinwiddie’s three-year bond pays off much more than most other financial instruments and certainly more than most government or corporate bondsThis gives investors the potential to generate lucrative returns, while Dinwiddie can get money out of his contract much faster than any other possible method.

Dinwiddie is currently the first big name with which the Dream Fan Shares platform launches its own token debt It is planned to bring a similar sign to the market for famous artists as well as for influencers in order to open up an even larger selection of stars for decentralized investments.

The potential to bring fans closer to their favorite athletes through tokenized investment models goes far beyond simply ensuring an attractive interest rate for investors.. Imagine being able to sponsor a promising athlete token sponsorship and then share your success, or even own part of a popular team, so you can have a say in how it goes and what revenue it generates.

Possible applications

Tokenization in the sports industry is still in its infancy and the problems are still being solved. However, Various platforms that offer token services have appeared and offer more exciting use cases.

Among these, the recently launched partner platform is one of the most successful examples. Through partners, Sports fans can purchase a special type of cryptocurrency, known as fan tokens, that gives holders voting rights so they can make decisions that affect their favorite sports teams. Holders may also be able to take advantage of a number of special incentives such as: B. VIP experiences, player meetings, tours and more.

Through this system, members allow fans to truly feel part of the club but still not benefit from the team’s financial success. For this reason, Partner fan tokens are not considered value tokens. It is therefore not necessary to be an accredited investor to participate.

Token Stars is very different with celebrities and tokens. Token Stars proclaims itself as “the first celebrity management platform in the blockchain“And that’s exactly it. Celebrities can use the platform to host their own ICO. In essence, allow yourself to divide your time into token blocks that can be redeemed for activities such as an after-party with fans, Skype shows, and individual training.

The flexibility of this system can be adapted to practically any application, so that both stars and their fans can determine what each token represents and how it can be redeemed. It can also be used for token performance, allowing players to fund themselves in a tournament like the World Series of Poker. Also, Users can sponsor their favorite players or teams at featured eventsFor example, the big leagues and earn part of the profit if your star or team does well.

Where is the token industry heading?

One of the main reasons why token sales have become dramatically more popular in recent years is the potential to increase the fundamental value of rights by increasing profits and liquidity. Tokenized rights can be traded on the market with less friction, which increases the liquidity of the rights. Tokenized rights are integrated into all systems, which enables seamless integration and increases the use of rights.

This enables the creation of entirely new asset classes that were impractical or simply impossible to create prior to the advent of blockchain technology, and potentially uncover hidden treasures of the wealth stored in physical possessions. Creating new investment models that everyone can access; and enable brands to become much more decentralized.

The future of the Tokenized Asset Industry is clear. Any person or thing with significant added value potential over a fixed period of time has the opportunity to tokenize and sell on the Internet. It can be anything from celebrities to online personalities, aspiring athletes, brands, companies, patents to anything that has value.

With this in mind, it is now time to create a framework that ensures investor security and enables everyone to participate in the new token economy without taking the same risks that many investors burned during the recent ICO madness to have.

The views, thoughts and opinions expressed here are only those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.