Better understand how a Fan Token works

Charlie Taylor

Despite still being a novelty in the market, tokenization is spreading in several areas. Nowadays, tokens are practically everywhere, going far beyond just serving as forms of payment or participation in companies, for example, as is the case with the Fan Token. In this article, you will know everything you need to understand more about this type of token that has been gaining more and more attention from people. Good reading!

What is a token?

First, it is important to conceptualize what a token is before delving deeper into the Fan Token itself. Tokens, in the crypto market, are the digital fraction of a real asset, created on a Blockchain, a technology that emerged with Bitcoin in 2008. It can be considered a kind of ledger in which all information related to transactions is concentrated, such as the amount of tokens traded, who sent and who received them, and much more. All this information is stored within a block, which has a timestamp. From time to time, a new block is formed and interconnected to the previous one, creating an immutable (as the name implies) “chain of blocks”, that is, that under no circumstances will be changed. There are 4 main types of tokens: payment tokens (payment tokens), utility tokens (utility tokens), security tokens (securities) and the darlings of the moment, the NFTs (non-fungible tokens or non-fungible tokens). The Fan Token, as it is usually linked to sports groups and offers those who buy it access to exclusive products and services, in addition to participation in voting, can be defined as a utility token.

How does Fan Token work?

In practice, the Fan Token works like a football club supporter program, but with some differences, such as, for example, the fact that it is stored on the Blockchain, there is no need to pay a monthly fee to maintain it. and also worth money to those who buy it, since, over time, the token can appreciate in value, according to the movement of the market. The purpose of creating the Fan Token is to connect those who own them with teams, artists and much more in a very simple and effective way. This type of token generates engagement and moves fan bases, bringing a new movement to the crypto market. When a person invests in Fan Token, they can be part of internal decisions, win exclusive prizes and even discounts, in addition, of course, to be able to have exclusive and early access to content and benefits related to who is behind the Fan Token. By allowing fans to have access to so many benefits, the Fan Token ends up being a unique experience, in addition to making the crypto market even more accessible, since it is a way to take the first steps in it without having to pay large amounts. I believe that this is the main role of tokenization: to democratize access to investments, in addition to making everything more agile and transparent, both for the owner of the tokenized asset and for those who buy the tokens. I hope you have understood more about Fan Token and its great importance for crypto market movements!

About the author

Daniel Coquieri is CEO of asset tokenization company Liqi Digital Assets. Entrepreneur in the technology field, he was the founder of BitcoinTrade, one of the largest cryptocurrency exchanges in Brazil.

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