Web3 is not as complicated as you may think and its newly formed link with Formula 1 has made it essential to understand. Web3 has presented lots of new opportunities for companies looking to invest in Formula 1, which you cannot afford to miss out on…
In 2021, popular cryptocurrency exchange platform, Crypto.com became an official partner of Formula 1 in a reported $100 Million deal. This highlights that the link between Web3 and motorsport is stronger than ever before. When you consider this and the fact that 10 of the 10 F1 teams are sponsored by a Web3 company, it’s clear that the window for other companies to follow suit is well and truly open. It’s a window of opportunity that you simply cannot afford to miss, and at RTR Sports we are on hand to give your company the best help as you take the steps to investing in F1 or MotoGP sponsorship.
But what actually is Web3? Web3 is essentially a new iteration of the worldwide web. First there was Web1, which was the ‘first version’ of the internet- it was ‘read-only’ as it was made up of content created by governments and big corporations. This was followed by Web2, and this version is the worldwide web that you mostly use today. It is more developed than Web1 because it gives you more autonomy- much of the content is generated by normal people. You are able to create your own platform using Web2. The best examples of this are social media platforms such as Youtube, Twitter, Facebook etc. The transition from Web2 from Web3 can be described as the next step in the decentralisation of the internet.
Granting more autonomy to the user has opened up doors to new opportunities for those in the sports marketing field- it has resulted in a rise of Web3 companies sponsoring sports teams/athletes. This is most notably seen through Web3 features like NFTs and cryptocurrencies, with NFTs having given companies new ways of building relationships with its consumers. On the other hand, cryptocurrency companies have sponsored global sports in order to push their promise of a safer and more secure banking system. It is important for these companies to gain the trust of users in their push to help evolve the worldwide web.
What makes the Formula 1-Web3 link so special?
Web3 is the fastest growing sector in motorsport, and most significantly in Formula 1. The reason for this is that Formula 1’s global audience aligns with cryptocurrencies’ emphasis on decentralisation and globalisation. Cryptocurrency is an easier way to transfer money around the world as it uses encrypted blockchain technology to carry out transfers, in turn cutting out the middle man (a centralised bank). So, what better way to promote this than by sponsoring a sport viewed by fans all over the world? Research from global analytics company Nielsen Sports has found that 1 billion people claimed interest in F1 by April 2022. Most significant however, is the fact much of this audience growth has been driven by the 16-35 age group, making F1 the perfect partner for cryptocurrency companies placing emphasis on the future of the internet.
In addition to a global audience, the highly technological nature of F1 makes it the ideal sport for Web3 companies to grow in. F1 teams are constantly looking for new ways to gain that all important edge over rival teams, with this competition driving innovation. This aligns perfectly with what is happening in the Web3 world as companies are looking for the best ways to utilise features of Web3 like NFTs to offer new and exciting things to their consumers.
What about NFTs in F1?
In addition to crypto, Formula 1 will be exploring how to make the most out of the rapid rise of NFTs. With a recent Deloitte study forecasting the generation of $2 Billion by NFT transactions by the end of 2022- this presents a massive opportunity for F1.
NFTs are a type of crypto asset built on the Ethereum blockchain- transfers of NFTs are mostly done using the Ethereum cryptocurrency. Initially, one may look at them similarly to trading cards popular with kids. However, the fact NFTs are digital has seen companies add many interesting features to their NFTs in order for them to stand out in an ever-expanding market. Similar to merchandise, they offer fans new ways to get behind their favourite teams/athletes. They essentially allow fans to own their favourite moments, with Aston Martin’s partnership with Cryto.com highlighting this as they produced NFTs of their new cars hitting the track for the first time.
Interestingly, the Aston Martin-Crypto.com partnership involved an ‘NFT drop’ where fans could collect different car parts, with the amount car parts you collected placing you in a tier. These tiers equate to different rewards, including discount codes, team merchandise and even tickets to exclusive events. This is just an example of why the Web3-F1 link makes sense, it has broken down barriers and given teams/athletes new ways to get close to their fans and make the sport we know and love even more exciting.
As you have read, if your company is involved in the Web3 world, the benefits of investing in Formula 1 are enormous. It allows you to tap into an ever-expanding audience and align your company with a sport heavily focused on the future. Better yet, it is felt that we are only just scratching the surface. If other sports are looked at as a blueprint for where the Web3-F1 partnership can go then there is a lot to be excited about.
A mouth-watering 20-year $700 million naming rights deal for the Staples Centre (best known as the home of the Los Angeles Lakers and the Los Angeles Clippers) has recently been signed. It will see the world-famous arena renamed the Crypto.com Arena. This deal has benefits for both parties involved, with owners of the Staples Centre, AEG, obviously netting a huge sum of money whilst Crypto.com will have visibility in America’s most popular sport. The high visibility will help to increase consumer confidence as fans are more likely to trust a company they see partnered with their favourite sports team. This improved confidence is vital to Web3 companies, who have been looked at with great suspicion by people over the years, unsure whether to buy into claims that Web3 is the future of our web. The Web3-Sport partnership is a win-win, get your company involved in F1 before the ship has sailed.