Cryptocurrency enthusiasts are advocating a future in which everything will be tokenized: real estate, IoT, supply chain, energy, healthcare. These are situations that require trust and accountability but where it does not inherently exist. In other words, everyone needs to trust each other but nobody does. Blockchain offers trust as a built-in product feature. The most compelling stories are in sports and gaming, specifically with Unikrn and FCFL (Fan Controlled Football League). These companies have implemented blockchain technology and tokens to help resolve accountability and transparency in their communities.
Engaging globally in a regulated space
Unikorn is a gaming and esports (competitive video gaming) betting website. They offer event coverage, original content, and, where they are licensed and regulated, wagering. In 2017, they launched their own cryptocurrency token, called Unikoin. The wanted to engage and commercialize a global customer base but their challenges included
- Sports wagering is highly regulated. Unikrn wanted to remain legally compliant.
- There were multiple banks and currencies across the world that they would need to work with.
Instead of building for individual banks and currencies, Unikrn built a blockchain to create a global token-selling platform. The blockchain’s transparent ledger helped their regulators deal with issues like anti-money laundering (AML) , Know-Your-Customer (KYC), transactions history, anti-sanctions bouncing, and individual verification. CEO Rahul Sood said, “With a typical ICO, anyone can send Ethereum to any address and get tokens in return. We didn’t allow that. We had to know who people were, where they were coming from.”
One of the current challenges of blockchain is that transactions are not instantaneous. This lag was not acceptable for a real-time wagering platform. For example, when you’re on betting whether Tom Brady is going to throw a touchdown, you don’t have 10 minutes for your transaction to clear the blockchain. To deal with high-speed transactions for real-time events, they build their own private blockchain with no transaction fees.
Unikrn’s ICO raised about $130 million tokens to customers and collected about 112,000 Ethereum. Today, over million users across 113 country spend these non-transferable tokens on the their platform.
Sports and the Wisdom of the Crowds
FCFL is another example of the future of sports. In 2015, they bought a team in the Indoor Football League and let the fans choose everything from the team name to the city they represented to the plays. In it’s first season in 2017, the Screaming Eagles was 5-11 and #3 (of 10 teams) in the league for offense. They are currently launching a fully sponsored league of five teams. Fans have the power of coaches and general managers, meaning they call plays and can hire and fire players. Voting works on a plurality and fans need the reassurance that the votings are legitimate. Enter blockchain, which solved two problems for them.
- They needed transparency in the fan voting process and results.
- Blockchain enabled tokenization for voting power.
Holy sh*t! I just called that play!
FCFL CEO, Sorahb Farudi, said, “As a sports fan, until you actually experience it [you might not get the FCFL concept]….the first time I experienced it…I looked at my phone, I called a play, I looked up and saw the guys do exactly what I called and said, Holy sh*t! I just called that play!” Even though there are thousands of votes, fans feel connected to the game and players because they feel that they called the play. Blockchain offers the accountability and traceability. Fans can see that the voting results were not manipulated as some sort of publicity stunt. Similar to Unikrn, fans are able to earn tokens on the platform and build their status on a leaderboard.
I’m a fan of coaches. They tend to stay on teams longer and have a longer overall career to follow and cheer on. Coaches like Mike Krzyzewski and Gregg Popovich embody great leaders who also train the next generation of great leaders (fingers crossed to seeing an NBA head coach Becky Hammon). This new model is taking a significant part of what I love about sports (specifically teamwork, leadership, practice) and turning it upside down. For this reason, I’m intrigued.
I’m interested in seeing the Wisdom of the Crowds applied to sports. I already have so many questions. What happens when a player is injured or needs to time to recover? I remember when the SF Giants were in the 2014 World Series. I was standing in a crowd at a Game 6 watching party outside of AT&T Park. Fans around me were saying that the Giants needed to have Madison Bumgarner pitch. Bumgarner had already pitched 2 games of the series, including a Game 5 shutout. SF Giants Manager Bruce Bochy repeatedly said to the press “He’s not a toy.” So what kind of decisions are going to be made when you remove the personal relation that these players have with their managers? Will it be closer to a resource-management game? I’m optimistic that some fans will factor in the human element. We’ll see those people higher on the FCFL leaderboards and thus have more FAN Tokens and voting power.
Why these applications works over other tokens.
These companies stand out as leaders in this space because
- They already had an active community and live product.
- They have a clear application for blockchain.
Unlike many ICO projects that sell a token to build a project, these companies already had a working project to integrate tokens into. The blockchain helped them be transparent, audit-able, and tokenize their community.
This article is part of our Blockchain and Cryptocurrency Market Landscape. Please click here more information about the companies that we are tracking.