Fan token is a crypto token that grants you a certain higher level perks in a sports, musicians or any other following related type of community. People with such tokens get to experience more content, special prizes, meetups, vote rights and other benefits.
Both fans and their idols gain something from these tokens.
Fan holders gain some weight in the decision making regarding the future of the artist, sports team or anybody else's community they are a part of. Artists and sports teams in turn get an additional income.
As you might have guessed these kinds of tokens are extremely unpredictable and volatile. But some artists/sport teams and other organizations see it as a good way to get additional profit and to bind their fans together even more.
As a matter of fact soccer related fan tokens have made their issuers a whopping $3.5 billion just in March 2022.
How does it work?
The issuer, in this case a sports team or an artist, mints a huge amount of tokens and then distributes them amongst their followers, fans etc. You can often find these tokens on various crypto exchanges which makes them susceptible to your regular trading rules. It's not surprising that such an asset also attracts a lot of crypto speculators and opportunists pushing its high volatility even higher.
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