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As “digitally native” ecosystems such as eSports continue to synergize with blockchain technology, sectors such as fantasy sports may be ready for mass adoption, says digital research firm Messari.
In a recently published report, researcher Mason Nystrom argues that fantasy sports are poised for significant growth due to COVID-19. It also believes that blockchain-based applications could help increase fan engagement in this rapidly expanding market. Nystrom explains:
“As the pinnacle of eSports and crypto networks awaits improvements in emerging technology and 5G connectivity, blockchain-based fantasy sports are poised for consumer adoption.”
Citing PwC’s research, Nystrom says betting and fantasy sports are expected to grow 7.2% over the next three to five years. This could bode well for the segment, as 75% of traditional sports bettors also played fantasy sports, according to a 2018 study.
Unlike traditional sports betting, where participants bet on the outcome of a match, fantasy sports betting is when you assemble a fantasy team and compete against opponents for a cash prize.
The need to digitize the sports experience has taken on paramount importance after the spread of COVID-19 led to a drastic reduction in spectator revenue. As large indoor gatherings are unlikely to return until at least 2022, the industry is looking for new ways to improve user engagement. The end of a federal ban on betting markets in the United States in 2018 provides one such avenue.
Blockchain-based applications can be used as the foundation for digital ownership and monetization, with platforms such as Ethereum offering a high level of trust. The trade-off right now, Messari says, is a poor user experience because if you lose your resources, they’re permanently lost.
Fantasy games built on the blockchain work by selling non-fungible tokens, or NFTs, which apparently increase in value based on the performance of real athletes.
The top three crypto fantasy sports – Sorare, MLB Champions and NBA Top Shot – have already amassed over $ 10 million in sales. Sorare and MLB Champions are built on Ethereum, while NBA Top Shot resides on the Flow blockchain.
While there are hundreds of NFT assets currently tracked by sites like OpenSea, the vast majority have non-existent or extremely low volumes.
