Sporting Crypto - Nov 22nd 2021 - Nike & Adidas enter the Metaverse, Crypto.com take over the Staples Centre, ConsitutionDAO and Krause House
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Intro Notes, Plugs & Amendments 🔌🔧
Not a week goes by that I regret dedicating a lot of my time to the Cryptosphere.
There are a lot of teething pains but the energy, verve and excitement in this space is unparalleled.
Every week I’m having people reach out to learn more and understand where Sports & Crypto is going, which has been amazing.
In 2019 I remember a lead tech editor at a large UK newspaper telling me that he was a Crypto cynic because he simply didn’t believe there was any good use case for a decentralised database, ledger or blockchains generally. I disagreed, even if I wasn’t quite sure where the mainstream adoption would come. There was just something there.
2 years later, I can confidently say he was wrong - although he probably still looks at himself in the mirror every day and thinks otherwise.
Cynicism is good and necessary particularly when there’s a lot of scams happening in crypto.
But don’t be like that tech editor.
🔌Had an awesome time talking to Max from Finimize on their new Discord server! Education is very important in this space and there are not many better teachers than Finimize…
🔌 A podcast I’m producing that is funded by the Edgeware DAO :fire:
Some of the people interviewed in this I wouldn’t have dreamt of talking to 6 months ago
🔌 I’ll be at New World Disorder on Wednesday 24th the second NFTs LDN meetup on the 25th! If you’re there, please say hi :)
🔌 Early days, but if you're interested in getting ahead of the curve and sponsoring the newsletter - feel free to reach out to me on Twitter or LinkedIn. I've had some people reach out already, but I'll only accept those who I think will be genuinely engaging and benefit readers :)
If you’d like to have a conversation more generally, you can also reach out above!
Stories & projects of the week
1) Nike and Adidas enter the Metaverse
Buzzwords are great fun.
In 2017 it was Blockchain, not Bitcoin.
Now it’s Web3 and Metaverse, not Crypto.
These things are all intrinsically linked, forever. So when you’re talking about Web3 or the Metaverse, ensure that you understand the vehicle that is allowing for the most important technological change we’ve seen since the advent of the Web, is crypto.
Now on to the fun stuff.
Nike and Adidas, have done some Web3 (ish) stuff.
Let’s start with Nike.
The fashion brand (is it right we call them that now?!) announced that they have created a virtual world called ‘NIKELAND’ inside Roblox.
For those of you who don’t know Roblox. it allows users to program games and play games created by other users.
It has 164m active monthly users and half the children aged u16 in the US are on the platform.
According to the FT, they earned close to $1.2bn from selling virtual currency (robux) to its users in the first nine months of the year as gaming surged under Covid-19 lockdowns. They also had their first blockchain base game launched on Roblox over the summer.
So Nike creating NIKELAND is a pretty big deal.
But what does this actually mean?
Very broadly speaking, this is Nike extending their relationship with customers to something immersive in a digital sense. It’s also a huge activation play if you consider the gargantuan number of users on Roblox.
This is far better than any Sponsorship deal Nike will ink over the next couple of years from an ROI perspective.
Specifically, this is a place where Nike consumers and the public more generally could in future purchase physical and digital merchandise, hang out and create their own mini games.
Taken from Nike news:
Buildings and fields inside NIKELAND are inspired by Nike's real-life headquarters and hold detailed arenas for the Roblox community to test their skills competing in various mini-games.
Dream it. Make it. Play it.
We’ve seen this before, haven’t we…but in a physical sense? Nike by you allows you to create your own personalised sneakers - and we’re now moving from to digital.
In the same piece by Nike News, these are the 5 things they state you should know about this virtual world, and below each point - I’ve broken down my thoughts.
Nike’s WHQ has transformed into “NIKELAND,” a place where competition and creativity are abundant for all. Dream it. Make it. Play it.
Nike have created a virtual world that anyone can create and play in. Roblox have 164m active users, many of which are current and future Nike buyers. Match made in heaven.
NIKELAND is enhanced by real-life movement, encouraging visitors to get more active. NIKELAND visitors can take advantage of accelerometers in their mobile devices to transfer offline movement to online play.
Nike are aware of the need to align their values of maintaining a fit and healthy lifestyle with something that is associated with ‘sitting at home’. Bridging that physical and digital gap is important, and keeping it accessible to all is even more so.
A digital showroom allows you to outfit your NIKELAND avatar with special Nike products.
Stunting. That’s what people care about. Showing off that they own X or Y. That’s what has made NFTs so popular to this point, to some extent. Nike are allowing people to create their own social capital so they can show it to their friends.
NIKELAND is free for anyone to visit and experience on Roblox, breaking down one of the biggest barriers to sport — access.
Accessibility is important and Nike know that Covid has forced everyone to become a digital first brand. This step helps them become digitally native, eventually.
The digital world will come to life at Nike’s House of Innovation (HOI) in New York City via Snapchat.
45.8m people tuned in to watch the Travis Scott Fortnite concert…digital events are here to stay.
I’m fairly confident almost every big brand in the world will do something akin to this over the next 3 years.
Now over to Adidas!
Adidas created a POAP.
A Proof of Attendance Protocol.
Slow down, what is this?
If I go to an event and want to prove I was there, I scan a QR code and it mints a token that goes into my POAP wallet. I can now prove that I was there.
Now let’s say that same event organiser, says that they are doing a special event for people who were there at that specific event that I went to. To join, you just have to show your POAP.
Now there are a lot more creative and exciting things you can do than just activate your loyal followers/audience beyond a specific event.
Additionally, this is a digital ticket stub - to some extent.
This is “I was there” but in digital speak, with endless possibilities beyond it to extend the connection those event-goers have collectively.
What Adidas have done is a bit more nebulous, and I like the vibe.
On their POAP there’s a statement that says:
For those of you in search of new playgrounds where possibilities are limitless, we invite you to join us as we voyage into the Metaverse.
This digital collectible is our way of rewarding you for following your curiosity as we explore this new age of originality together. This token proves you were here from the beginning of this journey. Keep it safe — it may come in handy.
This is the first step in our journey to empower the creators of tomorrow to thrive in the Metaverse. A place where anyone can express their most original ideas and be their most authentic selves. It will take some learning, some building and a leap of faith. If you’re already here, show us the way. If you’re new, come and join us. We can’t wait to see what we do together.
For those not fluent in Crypto yet, WAGMI means We Are Going to Make it. A crypto meme of sorts.
Brands should learn from this approach.
Stealth launch something
Announce it with a vague tweet that doesn’t give too much away
Create a sense of exclusivity with limited claimable POAPs
Tap into the Crypto audience by speaking their language
Create a community around those early POAP claimers and leverage the network effect
Don’t overcomplicate things.
Don’t rush them.
And do them properly.
There’s a lot to like and a lot to learn from what Adidas and Nike have done.
2) Crypto.com Secure 20 year Staples Centre naming rights
Well, this is incredible.
Goodbye Staples Centre, hello Crypto.com Arena.
If you don’t know who Crypto.com are, they’re one of the fastest-growing crypto platforms on the platform.
And they’ve been on a tear in the Sports space spending over $1bn globally to ensure Crypto.com are in front of everyone’s eyes.
The Staples Centre is iconic in that it’s home to the most iconic NBA franchise of all time, the LA Lakers…as well as their local rivals the LA Clippers.
They’re also home of the LA Kings NHL franchise, have hosted figure skating championships, all star games, democratic national conventions and much more.
The Staples Centre is a big deal in LA.
At $35m a year, this is the biggest naming rights deal in the history of Sports.
Someone I work with closely told me that if you’re a marketer and you have big money behind you, no exec is patting you on the back for small campaigns.
So I think whoever has pulled this off at Crypto.com, probably got a big pat on the back.
With all that in mind…Sports franchises are in a delicate situation right now.
A balance between commercials, brand equity and sensitivity to your fan base is very difficult.
We’ve seen many sports teams announce partnerships with crypto entities that don’t even exist on paper, such is the lack of due diligence some of these teams are doing.
Crypto.com are not going away any time soon however and their brand is massive. They have 10m+ active users, considerable cash and have only been an entity for just over 5 years. In fact, 4 years ago - they didn’t even own the domain ‘Crypto.com’, which they bought for $4m!
However, locals and sports stars like La Clippers guard Paul George have questioned the name change - essentially saying that the iconic stadium they grew up with feels like it’s no longer there in spirit.
Taking that to the extreme, I even saw somebody tweet that this is the worst naming rights deal ever, and nothing should ever be named after Crypto.
As an Arsenal fan who goes to the ‘Emirates’ stadium, I’d kindly object to that.
A bit of whataboutery there, but I am seeing double standards in the way that Sports analysts and commentators are acting toward this nascent space.
A Saudi state buys a soccer club with not that much outcry.
A very successful, high growth crypto platform sponsors the most iconic stadium in the world, and it’s an issue.
There’s an association with scams when it comes to crypto, and that is a very valid concern. But let’s not paint an entirely redefining industry with the same tarred brush.
I’d actually argue the larger issue is whether or not people will actually call it the Crypto.com arena…
NBA commentators will have to, but how long until locals stop calling the Staples centre by its former name?
Either way, this is just more confirmation that crypto is here to stay. 20 years is not short term thinking.
Crypto Deep Dive: DAOs buying everything…?
Last week, a DAO called ConsitutionDAO tried to buy the American constitution.
Yes, you read that correctly.
So first of all a DAO is a Decentralised autonomous organisation with a specified shared interest or purpose. (If you’re reading this Simon Taylor, yes - I shamelessly stole that from your newsletter).
The ConstitutionDAO core team created a crowdfunding campaign to raise money to bid for a copy of the American Constitution, of which there are 11 copies left in existence, 2 privately held.
One of the 2 privately held ones was being auctioned off at Sotheby’s.
In short, the DAO raised $40m+ worth of ETH in under a week.
The thread above by Alex details the journey.
It’s pretty incredible.
The amazing thing behind the raise is that a lot of the participants had never bought Crypto before. This was their first foray and their first ETH wallet.
In the end, they were outbid by a hedge fund billionaire who donated it to a museum.
Still a great story though!
Sounds like a movie…why is this important and why should I care?
DAOs are going to be very important in the future. Think of the constitution as a metaphor for any common objective or passion that a DAO is built around:
DAOs are great at putting people and pooled resources behind a purpose. The idea was created less than a week prior to the auction. In that time, 30 core contributors built a legal formation, fractional ownership contract, relationship with Sotheby’s, FTX and many more.
Accessibility of very expensive things is low for obvious reasons. Enter DAO ownership. A piece of the constitution is better than no constitution.
When you align purpose and incentives, great things happen. I’ve seen DAOs do things that would take 5 months at a traditional org. The pace and quality of work are second to none.
There are, however, lots of teething issues at this moment in time:
The tools are primitive
There’s no hierarchy but at times, hierarchy is needed: Sometimes, people need direction.
DAOs need cashflow help: The tools for cashflow/treasury management for DAOs is still primitive
Onramps not yet there: If you’re a freelancer who has no clue what Crypto is, then you have to learn. There are no tools out there that let you bypass that knowledge hurdle (yet).
So why should we care in relation to sports?
Soon after ConsitutionDAO, The Krause House announced their crowdfund.
This time, to own a minority stake in an NBA franchise.
So far, they’ve raised $1.7m worth of Eth with a hard cap of 1000 Eth ($4.3m at time of writing).
Less than 6 months ago - the idea was incepted in their discord.
Now, they’re raising millions to try and buy a minority stake.
This is Web3’s home team.
Are they going to make it?
But this is experimentation in public and I’m here for it.
If a Saudi state or rich, ranch owning American can own a sports franchise, why can’t a DAO? (one day).
Pet, why do you keep writing about DAOs?
Sports fans are tribal, but that collective tribalism could well play to their benefit when it comes to DAO related activities. If passion and incentives align, sports fans could do amazing things as collectives
DAOs running sports clubs will happen one day, but not yet. Those who do it first will likely do it wrong but become the trailblazers for others to follow in a more operationally sound way. To some extent, we’ve seen this with the failures of Kings.Limited, compared to how well Krause House have done so far.
Sports will change for the better because of DAOs. I firmly believe that sports fans will come together in a variety of ways to make sports better.
DAOs foster cultures that allow for complete creative freedom as well as operational excellence, and they let collectives achieve things that aren’t possible as an individual. When it works well in Sports, it’s going to change the game (sorry for the pun) forever.
More big stories & things to put on your radar
Sponsorships matter more to tokenised entitiescrypto.com put $700M into a 20 year sponsorship, and the resulting PR doubled its token price and led to a $9B run-up in market cap the deal paid for itself ~13x over, difficult to untangle token distribution and who benefited, but smart token marketing strategy!
SportsIcon raise $5.5m with some big backers involved!
Perplexed at how Man City have allowed this to happen. Football clubs have a duty to be sensible.
I get where he’s going, but the lack of nuance is frightening. Serious education is needed.
NBA Rockets will be paid in Bitcoin for their latest partnership
Great reads, great tweeting and more general ‘stuff’
I don’t know what’s going to happen to El Salvador but it interests me…a lot
The Winklevoss twins seem determined not to let Zuck beat them twice…
Eth the new standard?
Consensys raises a lot of money, but actually not that much money
The Epic CEO seems bullish…
I like this
Metamask now has 21m active users