eSports are a form of electronic sports competition in which competitors compete on gaming platforms and in video games, sometimes with a spectator audience. Their notoriety has increased significantly in recent years, especially during the pandemic.
Participation in the competitions is open not only to professional gamers, but also to fans, who, after registering or passing selections, can take part in the tournament.
Major competitions can be streamed through YouTube or Twitch platforms, and both participants and spectators can be present at the event, physically or remotely.

In 2021 there were 240 million fans actively playing games worldwide; by 2024 this is expected to increase to 291 million. As for the audience, however, compared to 474 million in 2021, 577 million are projected in 2024.
The estimated economic impact for the eSports sector, in Italy, amounts to between 45 and 47 million euros, according to data recently released by OIES (Osservatorio Italiano E Sports).

Blockchain and eSports, the benefits

The world of eSports has already approached blockchain very strongly. The advantages of this technology applied to eSports, lie mainly in the ability to track and validate results, ensuring transparency and data sharing with all participants on the platform.
The ability to clearly show the progress of tournaments and track transactions, through new technological models, results in increased trust on the part of all players and fans.

For example, one of the most immediate benefits of distributed ledgers lies in the ability to enroll all users on the platform so that awards are visible to all and transparent, including by leveraging on cryptocurrencies or tokens.
Startups entering the world of eSports have begun to turn to blockchain as early as the planning and fundraising stages. Initial Coin Offering (ICOs), fundraising via crowdfunding, are directly aimed at obtaining funding for a project using distributed ledgers. The operation of ICOs is based on the issuance of tokens that are sold in exchange for a fee intended to finance the initiative.

After purchasing the tokens, users actually become part of the system, which allows players and brands to both organize events and tournaments and set up prize pools for winners.
In this way, in addition to ensuring real sharing of the initiatives taken by the various tournament players, it is possible to increase the pool of users who aspire to become professional players in the world of eSports.
In addition to event organizers, professional players will also be able to make use of technology to broadcast their matches live, earning money on their channels through advertising.
Thus, a new perspective opens up for sponsorships, which can identify not only events and teams but also professional gamers with whom to sign mutually beneficial agreements.

Blockchain and eSports, toward the future

Blockchain represents an innovative circuit in which to give rise not only to economic exchanges, but also a virtual platform in which audiences and fans can be actively involved in the enjoyment of various initiatives.
In this way, all players on the scene find themselves playing an equally important role and gaining benefits regardless of their position in the ecosystem.
Novice gamers, who aspire to become professionals, often face quite a few difficulties in overcoming the barriers to entry created for the benefit of the preponderance of team sports that, by definition, require the creation and management of a team. Thanks to blockchain, this issue can be easily solved. Indeed, with modern platforms, gamers can challenge themselves individually: if interested in team competitions, they can easily find other “peers” (anywhere in the world) through recruitment platforms.

Blockchain and eSports: more security, trust and speed

Everything related to the contractual phase and financial transactions can be easily managed by the platform, resulting in faster time to make agreements and increased security and trust between the players in the exchange.
It is the creation of trust and the pursuit of transparency and security that are cornerstones not only for the success of platforms, but also for the growth and development of eSports.

With a decentralized and incorruptible method, the risk of system corruption can be reduced and what happens within the platform (including on the eSports-related betting side, for example) can be regulated in a crystal-clear manner.
What remains a substantial problem is the lack of established legal certainty, but the increase in litigation in the industry has led to a growth in attention to eSports regulation and will certainly produce case law in the near future that can increase protection for all gamers.

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Another Play-to-Earn that has become famous recently is that of French startup Sorare. It set a record as the richest ever Series B round (investment round) in Europe, raising an impressive $680 million and reaching a capitalization of $4.5 billion. It is an NFT-based fantasy league that reprises traditional fantasy soccer. With 90% of users lacking blockchain expertise, game card purchases can be made using wallets that convert traditional currencies to Ethereum. Blockchain-related technology barriers are thus broken down and made invisible to consumers. Being based on Ethereum, the cards gain in interoperability, i.e. they can be traded on secondary marketplaces. This very feature is linked to the liquidity mentioned above. The digital collectible that was sold at a higher price is that of Borussia Dortmund’s Norwegian centre forward Erling Haaland at a price of 600 thousand euros.

The world of motorsport-related gaming has also experienced changes related to the advent of blockchain. Two Play-to-Earns were born, related to Formula E and Formula 1 respectively. The first one is called High Voltage and NFTs represent spare parts, developments and upgrades of single-seater drivers’ skills and can also be purchased on Binance’s NFT marketplace. The one related to Formula 1 is called Delta Time, in which NFTs also represent parts of real circuits. Owning an NFT of a circuit allows you to earn phee based on the number of users who use those tracks for their races: the rarer the NFT the higher the percentage of phee guaranteed to the owner. NFT sales and rewards are paid in REVV Tokens, a cryptocurrency native to both platforms. To monetize these tokens, simply transfer them to an exchange platform and sell them.

To stay in the world of motorsport we can mention the recent partnership of Scuderia Ferrari with the Swiss company Velas AG. The Swiss will be Premium Partner of the racing department of the Maranello team and Title Sponsor of the Ferrari Esports Series and of the Esports team that will compete in the F1 Esports Series. Again, NFTs, created by the Swiss team on Solana’s blockchain, will be useful to progress in the Cavallino stable’s Play-to-Earn.

NFTs as property deed

Thanks to the blockchain technology on which these products are based, NFTs are potentially configured as true deeds of ownership, certified and indisputable. Their deployment in ticketing is progressing in a spotty but continuous manner. The main national and international sports bodies, such as UEFA, have begun to adopt these systems or announced their intention to do so in the short term. Their use becomes decisive in gathering data, profiling fans and proposing targeted reward programs.

Also with regard to merchandising, these tools can be used to certify the ownership and originality of a good. For obvious reasons the value of the good, and therefore also of the NFT, is destined to grow when counterfeiting is made impossible and the property can be certified. We can therefore say that the transfer of ownership of a good cannot exist without the transfer of the NFT related to it. In addition, we have the first cases of digital-only merchandising, created in very limited series and bringing with them benefits beyond those of simple possession, such as the right of pre-emption on other merchandising goods and the possibility of accessing exclusive experiences reserved for owners.

NFTs can also be used to make their owners full-fledged shareholders of a company or a specific project. This is equity crowdfunding based on NFTs: their possession entitles the owner to participate in the distribution of part of the revenues in the percentages agreed upon in the purchase phase and regulated by the Smart Contracts registered on the non-fungible tokens. Some of the most striking cases are those of the casinos under construction on the metaverse of Decentraland and The Sandbox. Fifty percent of the revenues will be split between the owners of the 11,111 NFTs in the collection. Possession of lands in the metaverse, called Lands, is also certified by possession of the corresponding NFTs.

Will Fungible Tokens follow the example of Non-Fungible Tokens?

Fungible tokens differ from NFTs since they are all identical, i.e. they do not differ from each other: an example of this is the Fan Tokens sold to soccer team fans by platforms such as Socios.com. Fan tokens have enjoyed soaring popularity in 2021, launched by massive advertising and sponsorship investments by the platforms that market them, as well as hype generated by the novelty of the services offered.
The contracts in place between sports clubs and the companies that create Fan Tokens restrict their use to mostly virtual experiences and services created ad hoc for their launch. In addition, these types of tokens have proven to be subject to volatility that has generated a certain mistrust on the part of fans.
It will be necessary, therefore, to move towards a “maturity phase” of the Fan Token, which will inevitably pass through an adequate regulatory and fiscal structure, also taking into account the MiCAr regulation of the European Union that provides for much higher taxes on security tokens (savings and investment products) compared to those provided for utility tokens.

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