Web3 May Be About to Score A Big Win in Sport

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Blockchain technology is transforming a number of traditional markets with the Web3 industry entering to redefine the traditional sports space too. How is it planning to achieve that? Read on to find out.

Blockchain technology is transforming a number of traditional markets, with the sports industry being the latest highlight on Web3’s influence list.

According to a study published by Modor Intelligence, sports revenue from blockchain technologies is expected to grow at a 9% compound annual growth rate (CAGR) over the next five years, becoming a valuable feature in ticketing — making acquiring tickets more accessible, secure, and fast.

How else is Web3 transforming the sports industry?

Web3 in Sports: Disrupting the Traditional Business Model

“Applying the principles of Web 3.0 and the recent advances around blockchain technology to the sports industry allows us to reimagine the relationship with the sports fan base,” Peter Argerakis, the CEO of the decentralized sports betting platform Six Sigma Sports, told Techopedia.

Fans play a pivotal role in the sports industry, contributing to various aspects of the game and its ecosystem, from revenue generation to player and team support, as well as engagement and interaction.

Dmitry Mishunin, the CEO of HashEx, added that through the introduction of decentralization, which goes hand in hand with the Web3 industry, the sports market benefits from fan-driven decision-making.

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He explained:

“For instance, Socios.com, powered by the Chiliz blockchain, allows fans to buy tokens and influence club decisions. This shift is democratizing sports, giving fans a more significant stake and voice in their favorite teams’ operations, something previously reserved for elite club owners.”

Jack O’Holleran, the CEO of SKALE Labs, added that many major sports leagues and franchises are currently on the way to building a Web3 strategy. This new addition to a formerly traditional industry could enhance ownership, transparency, and autonomy, facilitated through smart contracts and blockchain-backed sponsorship processes.

In addition, in June 2023, the boxing industry witnessed its first-ever metaverse match where Jones Jr. and NDO Champ faced off in an undisclosed location and were tracked using motion capture technology to make it look like they were part of a videogame. In a first-of-its-kind, Web3 technology has managed to show off its full potential for what it could bring into the world of sports in the future.

https://twitter.com/galaxyarena_io/status/1657440588336099328

Web3 in Sports: The Role of NFTs

Non-fungible tokens (NFTs) play a significant role in how Web3 is transforming the sports sector, with some of the most prominent players in the industry introducing NFT projects in which fans could get involved.

NBA’s Top Shot is perhaps one of the most prominent projects in the industry, being in the top 10 most traded NFT projects of all time, according to data published by DappRadar.

“NFTs have emerged as a groundbreaking technology that is reshaping the landscape of the sports sector. These digital collectibles, often referred to as POAPs (Proof of Attendance Protocol), are revolutionizing how fans engage with their favorite sports teams and athletes,” the former head of creator relations at MoonPay, Justin Johnson, explained.

In addition to becoming “digital memorabilia,” NFTs are also opening up a new world of in-real-life experiences for their holders. Johnson expanded on this idea, adding that some NFTs allow holders to access exclusive behind-the-scenes experiences, meet-and-greets with sports legends, or even VIP experiences to highly sought-after games and other sporting events.

“These NFTs are paving the way for fans to enjoy exclusive merchandise, leveraging the power of blockchain technology to authenticate and track the ownership of limited-edition items, thus fostering a sense of exclusivity and value within the sports community.”

Moreover, NFT platforms have introduced game cars that empower users to create fantasy teams, participate in global tournaments, and interact with other fans, helping bring sporting communities closer than ever before.

HashEx’s Mishunin added:

“Athletes are leveraging Web3 technology to establish direct and more intimate connections with their fans. NBA star Spencer Dinwiddie tokenized his contract, allowing fans to invest in his performance. This not only provides athletes with alternative revenue streams but also fosters a deeper bond between athletes and their supporters, as fans now have a vested interest in their favorite player’s success.”

Indeed, NFTs offer athletes a new revenue stream, allowing them to capitalize on their performances, likenesses, and personal branding narratives in ways that were previously unimaginable.

Future of Sports with Web3

“In essence, the fusion of Web3 and sports is not just changing the game; it’s redefining the entire stadium,” Mishunin said.

By helping fans move from being “just spectators” to “active participants,” the traditional nature of the sports industry is ready to move into a new era of digitalization.

In the future, Mishunin added that “we could see a world where virtual stadiums in metaverses like Decentraland host matches, with fans from across the globe attending in real-time using their avatars.”

Moreover, the future of Web3 in sports could also encourage athletes to hold their personal token sales, allowing fans to invest directly in their careers, entirely blurring the boundaries between the digital and physical realms.

In addition, Six Sigma Sports’ Argerakis added that Web3 technologies are not just disrupting the sports industry itself but also everything related to it, including sports betting, where customers can engage with new features that have not been previously possible.

“At Six Sigma Sports, we have created a new way to bet as a participant alongside the House, which provides users the opportunity to capture the value that they help create. We are also simultaneously using increased transparency not only to reduce trust requirements but also to enhance the user experience.”

Of course, companies are “just scratching the surface” so far in exploring the full potential of how Web3 technologies could reshape the sports industry.

The Bottom Line

Integrating Web3 technologies into the sports industry signifies a revolutionary shift, transforming fans from spectators to active participants.

Blockchain innovations, mainly through NFTs, reshape fan engagement, offering exclusive experiences and direct connections with athletes. This digital evolution not only redefines the stadium experience but also transcends into virtual realms, where global fans gather in metaverses to attend matches using avatars.

As the industry explores these transformative possibilities, the sports landscape stands on the brink of an era where transparency, ownership, and interactive fan experiences are set to redefine the very essence of sports.

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Iliana Mavrou
Crypto journalist
Iliana Mavrou
Crypto journalist

Iliana is an experienced crypto/tech journalist reporting on blockchain, regulation, DeFi, and Web3 industries. Before joining Techopedia, she contributed to a number of online publications, including Capital.com, Cryptonews, and Business2Community, among others. In addition to working in journalism, she also has experience in tech and crypto PR.  Iliana graduated from the City University of London with a degree in Journalism in 2021. She is currently pursuing a Master's degree in Communication.