What Is a Fan Token Offering (FTO)?-banner-imageAcademy

What Is a Fan Token Offering (FTO)?

Today, fans want to interact more with the clubs, organizations, and individuals they support. However, interaction has been quite limited due to the impact of Covid-19. Thanks to innovations in digital technologies and the cryptocurrency ecosystem, this problem can now be solved so fans can interact with the clubs they support and have unique experiences.

What Do Fan Tokens Offer?

Fan tokens allow fans to access the latest trends, exclusive discounts, and events. Besides the experience fan tokens provide, users can use them as an investment vehicle. Thanks to fan token projects, clubs give fans the chance to meet their favorite players, win signed jerseys, and watch the match from the VIP box. In this way, financial support is provided to the clubs. The more fan tokens you have, the better your chances of winning rewards, participating in giveaways, and having unique experiences. In short, fan tokens offer the following benefits:

  • The right to vote on club decisions,
  • Chance to participate in surveys and auctions to win various prizes,
  • Chance to win autographed jerseys, meet players and attend dinners,
  • Chance to take part in Q&As and pre-match activities,

and more.

Pricing of Fan Tokens

Like all cryptocurrencies, fan token prices may increase or decrease according to the supply and demand in the market. Club success, changes in club management or club performance can affect fan token prices.

What Is a Fan Token Offering (FTO)?

A fan token offering, or FTO for short, is like an IPO in traditional financial markets or an ICO in the cryptocurrency market. When it is carried out on an exchange platform it is called an IEO. For more information on ICOs, IEOs, STOs, and IDOs, you can read our article here.

An FTO includes all the processes in which fan tokens are sold at a set price before they are released and become available. This event is carried out once for a fan token. A fan token is sold at a fixed price before it is available to buy/sell. Users who buy fan tokens at this stage can only sell them when the trading board opens, if there is no time limit. If there is a lockup period, users can only sell their fan tokens after that period. An FTO can be executed in several stages. After all the stages, fan tokens become available and priced according to the supply and demand in the market.

What Is a Locked Up Token?

Token lockups are an essential part of an FTO process. Locked up tokens, which ensure the smooth functioning of the token economy, differ from unlocked tokens in terms of features such as pre-sale price, maximum sell limit, and token lockup period. Before the pre-sale phase begins, locked up tokens, whose features are detailed in the whitepapers of the relevant projects, are offered to investors at a more affordable price, provided that they do not sell these tokens for a certain period. In fan token projects with lockup period options such as 12 months, 6 months, or 3 months, locked up tokens cannot be sold in any way during the specified period.

Token lockups begin the moment fan tokens are bought. Once the lockup period expires, these tokens become available for trading in trading pairs. In this way, the token economy stabilizes and situations such as high inflation or supply shortages are prevented.

If you want to buy fan tokens, you can do so on Bitexen.