Footballer Lionel Messi, who has joined French football club Paris St. Germain (PSG) on a two-year deal, will have a component of his signing package in $PSG Fan Token, a crypto-based digital asset linked to the club, according to a statement issued by them.
These tokens, in turn, act as cryptocurrencies which can also be traded on exchanges for fiat (like dollars or euros) or other cryptocurrencies (like bitcoin or ethereum).
Though the tokens were a part of his signing package, the quantum of these tokens or his package is not public. He will reportedly earn 35 million euros ($41 million) at the club after transferring from FC Barcelona.
What is the difference between fan tokens and a cryptocurrency?
What differentiates a fan token from other cryptocurrencies is that these token grant their holders certain privileges in interacting with the club, making them a conduit for fans to engage with footballers and the club's management more intimately.
For starters, holders of these tokens are able to vote on polls that the club opens to token holders. A recent example of such a poll was the message that PSG's captain Marcus Corrêa carried on his armband. The more token held by a fan, the more the influence of that fan over how a poll goes, though voting in such polls may be subject to an upper limit to prevent malice.
The voting and these benefits reaches holders of the token through socios.com, a company working at the intersection of crypto-technology, sports and fan outreach. Socios also issues a finite number of these tokens. In PSG's case, 2.9 million $PSG Fan Tokens exist out of a possible upper limit of 20 million tokens can eventually come into circulation.
PSG was among the first club to hop on cryptocurrency bandwagon, when they did so as early as 2018 when they partnered with Socios to launch their fan token, which eventually took place in 2020. Socios.com also oversaw prominent clubs like Barcelona, Atletico Madrid and Juventus issuing their tokens last year, while Manchester City, AC Milan and Arsenal launched them this year.
In PSG's statement, the club has said that holders of the fan tokens have also received personalised video messages from the players, and have been allowed to choose the messages to be displayed in players' dressing rooms, with more such benefits being in the pipeline. The benefits listed by Socios also says that fans would be given access to discounted official merchadise, hunts for more fan tokens and chances for free match access and tours.
How have these tokens performed?
Since the signing, $PSG Fan Token's market capitalisation has risen more than 130% in a day after the club announced that it was a part of Lionel Messi's signing package
Data from online cryptocurrency market tracker Coinmarketcap shows the token traded at a market capitalisation of $121.65 million, driven by record trading volumes in the run up to the transfer, even though the price of the token has fallen from a high of $61.5 for the token on August 10. The token currently trades as $42.45 at the time of publication.
The club seems to be delighted with the evolution of the program.
Marc Armstrong, Chief Partnerships Officer of Paris Saint-Germain said: "Fully embracing Socios.com and $PSG Fan Tokens has proved a massive success for the Club. We have been able to engage with a new global audience, creating a significant digital revenue stream."