Sporting Crypto - Oct 11th 2021 - Gary Vee Launches Candy Baseball NFT Project & Sorare Sign Bundesliga
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Intro Notes & Plugs 🔌
I seem to have picked a terrible day for this newsletter. There seems to be a plethora of Sport-related Crypto news every single Tuesday - which means I always miss something big! That being said, it does mean I can properly digest the big stories of the past 7 days and break down how important they really are.
This week also saw the biggest increase in subscribers for the newsletter which is incredible to see. A 50% increase isn’t that crazy when this is still starting out and on hundreds rather than thousands of subscribers but nonetheless, it’s great to see.
I have some plans about how to make this not ‘another newsletter by a guy about Crypto’. A referral system, cool collabs and some giveaways are in the offing when certain milestones are reached - which I’m quite excited about doing in the future.
🔌 I’m going to be at the Football Content Awards this Thursday 14th Oct, my podcast the State of Play is up for ‘Best International Podcast’. If you’re there and we haven’t met, please say hi. If we’ve already met and you’re attending, I look forward to catching up.
🔌 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. If you’d like to have a conversation more generally, you can also reach out there :)
Stories & projects of the week
Gary Vee was never going to stop at Vee friends when it comes to NFTs. His latest venture, Candy Digital, has partnered with Major League Baseball to create MLB NFTs for the masses.
The launch was announced on a live stream from Gary’s Twitter account.
The MLB partnership was announced in June, and alongside Gary - there are some other small fish in the Sports & Crypto space respectively backing Candy. None other than Galaxy Digital, and also Fanatics’ Michael Rubin. This one probably has some legs.
It feels as though as soon as NFTs became a thing for sporting collectables, there’s been a gold rush when it comes to Major League Baseball. I mean, baseball cards appeared as early as 1898 in Japan (according to Wikipedia…) and many believe baseball cards *are* the original Sporting collectable, especially from a US cultural perspective.
Thus the gold rush!
Let’s take a look at what MLB has done so far when it comes to NFTs:
Now, enter Gary and Candy.
Candy is doing a few things differently from what I can see.
They auctioned off Stadium NFTs, now sold out, available on secondary markets here
It has a huge discord community already, which is giving preference to early supporters in terms of NFT buys.
Gary’s brand and marketing ability, coupled with Candy’s backers and their community mean there’s every chance this does a lot better than the Topps series. There’s already a huge community, I went in there when it first launched and it’s buzzing. This has been very well planned out and Gary hasn’t rushed when it would have been easy to do so considering how many land grabs there are going on.
A couple of interesting points that I think are worth getting into:
I’m not a usage rights or IP expert, but the MLB has now engaged with two separate partners for 2 separate NFT projects in the last 6 months. NFTs are going to change the way sports teams and associations use their rights, and likewise players as well.
The long game > the short game. Planning correctly and executing accordingly is always going to win in the NFT space and Sports are no different.
On 1) - I’m a firm believer that NFTs are going to change the way IP works. Again I’m not a lawyer, but a lot of these projects are interesting in that the owner of specific avatars in NFT projects own the actual rights, in that - if Cartoon Network wanted to make a show and include your NFT Koala - if the NFT comes with said rights, you’d have a right to veto the use of your specific Koala.
Now with Sports stars, teams and associations, this is a LOT more complex.
As a team or association you want as many partnerships as possible, but not too many to water down existing collections or just generally water down your brand.
Right now the English Premier League has a drinks partner, banking partner, snack partner - what is the Web3.0 version of that? What will partnerships in the metaverse look like, how do they all abide by IP law and how do they differentiate with what we see right now?
Where this space has changed the game for big brands is marketing. There’s no more room for a “let’s throw X event sponsored by Y” and hope to activate Z many individuals. You really need to think about what you’re doing to make a big impact.
This leads on to 2). The best projects I’ve been involved in or watched from afar - Sports specific or not - have all been patient. If you rush into this space, you won’t make it far.
As I wrote in the previous newsletter:
Think about it a lot. Talk to people about it a lot. Get your teams internally educated.
And when you do go to market with something, ensure it’s not a cash grab. Be authentic.
The long term value add for your brand here is 100x the short term.
And this isn’t a message strictly to larger brands looking to dip their toes in this space.
Smaller brands with smaller revenues need to realise that the reality of this opportunity is that work in this space could dwarf their current revenues 10x - 100x.
If you’re a marketer working in Sports and are looking at how NFTs work or mould your strategy - that’s your first rule. Don’t rush and be patient.
I mean, no surprise that Sorare are appearing this often in the headlines but it’s a surprise even to me that they are getting so many things over the line.
TL/DR if you’re a first-time reader, Sorare is a Global Fantasy Football Game that allows you to use your NFT player cards in fantasy games. It’s like Panini meets Fantasy Football meets Fifa Ultimate team meets NFTs.
After their La Liga announcement, launching legends - they’ve done it again by partnering with the Bundesliga in a league-wide deal.
The press release reads:
Bundesliga International is taking an innovative approach to the marketing of the Bundesliga and Bundesliga 2. The subsidiary of DFL Deutsche Fußball Liga has agreed a partnership in the growing sector of non-fungible tokens (NFTs) with the successful digital company Sorare. Effective immediately, the popular fantasy football game will be an official partner of the Bundesliga and Bundesliga 2 until at least the 2022-23 season.
This means that Sorare Bundesliga cards will be available up until at least the 2022-23 season.
In addition to this, Sorare has also announced that they’re venturing into Moments a la Dapper Labs & the NBA. Now this, is where things get interesting.
Playing cards that are useable in fantasy games are a great beachhead and they’re now taking aim at Dapper Labs who have until now had pretty much a free run at this market.
Another article stated:
The new videos will be used in moments-only tournaments, and Sorare plans to expand the video element to other leagues around the world.
What moment-only tournaments entail we still don’t know, but Sorare has always been about utility up until this moment. Usable collectables rather than just collectables.
After La Liga, the Bundesliga become the second big European league to join forces with Sorare - leaving only France, Italy and England. left. With Sorare being french based, their tech darling with constant support from Macron and his government - I don’t think it’ll be long until they join officially.
Sorare is rapidly growing and diversifying your range of income is always smart with any business. Sorare still doesn’t take a secondary market commission, meaning all their revenue is derived from selling the original NFTs. I think commissions come in at some point, but their marketplace needs to be a bit more robust to ask that from their customers. After all, there’s still no ‘counter-offer’ function, it’d be tough to ask managers to cough up 1% of sales when you can’t even do that!
They’ve recently invested in Sorare Data, a third-party data provider for Sorare who raised $750k, which included investment from SeedCamp among many others.
With Sorare, I kind of like to think of them as Football Entertainment’s equivalent to Hopin. Weird, but I’ll explain.
One vertical in your business creates an abundance of value. Sorare = selling player NFTs, Hopin = subscription for online conference hosting
Suddenly you have a lot of money and raise significant amounts. Pressure is on to deliver.
Sorare partner with La Liga and the Bundesliga. Go on a hiring rampage. Invest in third party businesses that have made a name in the Sorare ecosystem. Launch Legends…and now moments.
Suddenly you can see what’s happening here. Create an incredibly successful model, scale, but don’t rest. Diversify, scale again, reinvest in the business and invest in others. They earmarked themselves as the future of sports entertainment, and I can kind of see that taking shape. In a few years time, the SO5 game that has made Sorare so successful could generate 10% of their yearly revenues. We’re far away from that, but the way that they’re going it’s not inconceivable.
I’d bet anyone that Sorare acquire a big name in Football or in the Football NFT space over the next 18 months.
Our lives online are being reshaped and I think from a Soccer perspective, Sorare are the frontrunners and pioneers when it comes to changing the landscape for football fans.
Crypto Deep Dive: CyberKongz and the rise of passive income with NFTs…
Every 6-8 weeks something interesting happens in this space.
Then, everyone copies it.
This happens in financial services a lot, but it takes 3-5 years and it’s quite boring. X does buy now pay later. Y, Z + + + + all do it as well.
This means that things look and feel bubbly and weird but in quicker cycles, so the boom and bust cycles feel a bit more smoothed out over a longer period of time.
So what’s the latest?
Let me introduce you to CyberKongz. At the time of writing the floor is 1.6 Eth:
What are they?
Taken from their website:
CyberKongz started as a collection of 1000 unique and randomly generated non-fungible tokens (NFTs) created in early March 2021, priced mostly at .01 by the artist myoo.
Why are they important and why have they blown up?
The short answer is, Kongz introduced a token called $BANANA.
Every Kong holder gets 10 of these tokens a day.
What can you do with them?
Customisation: At certain $BANANA thresholds you can customise your Kong.
Breeding: When you have a certain amount of tokens, you can breed your Kong.
Shop: CyberKong shop is coming soon!
So…why is this interesting?
You start with NFTs, then you build a microeconomy. That’s why this is interesting.
Kongz at current pricing will yield their owners a pretty sizeable amount of $BANANA which is then convertible into larger cap tokens and eventually fiat. That’s pretty interesting.
I get the same feeling here that I do from the LOOT projects in terms of innovation, but also in terms of duplicates and people trying to create equivalents across 100s of different PFP projects. This for example shows how many projects have already followed in these footsteps:
But…there is also regulatory risk.
This thread by Will is excellent:
First of all, there’s a risk some of these are securities. If you’re promising a return, then you might be in trouble.
But the biggest risk maybe isn’t a regulatory one - as Will points out, it’s whether or not your project is GMI (gonna make it) when it comes to the tokenomics:
Final thoughts from Will:
So basically if you’re creating a token ensure that, to add to previous points:
Ensure that utility is always being innovated in terms of what you can actually do with the token
Ensure that Supply = Demand or demand outweighs it
Constantly move so that you’re not doing what everyone else is
Understand that just because these things are in order, it might still not work because your original NFT is NGMI
Most of the blue-chip NFT projects will eventually have a token.
Bored Ape Yacht club for example recently announced they were going to create one…but they’re being smart and taking their time, requesting the correct legal opinions - and all that good stuff that a responsible project should do:
What does this all mean for Sports?
First and foremost, you don’t *need* a token if you’re looking at creating a greenfield Sports Crypto project or if you’re a Sports brand looking to get into Crypto.
If you do make one, you better make sure it’s good.
In future, I see a lot of Sports brands creating tokens that are much more event & novelty led, burnable in exchange for merchandise and such. I don’t think we’ll see Nike creating a token that gives you a 75% yearly yield. But…might we see Nike airdrop tokens into wallets of genesis holders of their first digital collaboration, that are burnable for physical attire, digital events etc…maybe? Will people buy these tokens?…maybe.
If Web3.0 is about ownership, then a lot of these tokenised projects need to be careful not to fall into the trap of creating something that doesn’t grant ownership and upside of the totality of the thing they’ve created. So there’s a fine line and a fine balance.
Let’s see where this goes. There’s something here, but it’s rough around the edges to say the least.
More big stories & things to put on your radar
Sorare makes 4 key hires…big talent is entering the Crypto space.
Chilliz is going to invest $60m in the tokenisation of brands, media and entertainment. Interesting to see where this starts and where it goes…
League DAO is doing some interesting things. There is a lot of innovation happening here. Unsure if this will become a thing but nonetheless, it’s interesting and different.
Dapper Lab DAOs anyone? Dapper, behind NBA Top Shots, are looking at how they can do what they did to NFTS to DAOs?
Great reads and great tweeting
Crypto gets a bad rep on the environmental side of things but:
This by Coop is great:
A lot of people think that Web3.0 isn’t going to be a thing. The short answer, it is and they’re wrong.
Great deconstruction of DAOs by the Blockchain Insider Podcast team!
Again Crypto gets a bad rep due to AML and money laundering concerns. I wonder who has those concerns first and foremost? We need to start reading between the headlines…it’s getting boring now.
If you don’t follow Dave Nemetz, you probably should. A sports media vet who has some awesome ideas about how this *thing* is gonna play out…
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