Both the esports market and the Non-Fungible-Tokens (NFT) market have been exploding in recent times
During Q3 2021, trade volumes for NFTs rose as high as $10.7 billion, up more than eight-fold from the previous quarter. In comparison, and to put things into perspective, trade volume remained at just $1.3 billion for Q2 and $1.2 billion during Q1. Meanwhile, studies suggest that by 2026, the esports sector will grow to become worth approximately $1.9 billion. Moreover, approximately 291.6 million people are forecast to be viewers of eSports by 2024.
Now, these two high-growth worlds are set to collide, with a burgeoning list of future-oriented esports organizations adopting NFTs as a means of diversifying their existing income streams, penetrating into an entirely new customer base, and galvanizing fan engagement and loyalty.
As more and more people continue to explore this budding technology, the list of untapped use cases related to these offerings has only continued to develop.
A closer look at the esports boom
Despite some startling monetary figures emerging in recent months, most analysts are of the opinion that the esports market is still nowhere close to reaching its full financial potential.
Another clear indicator highlighting the growing clout of the esports industry is the salaries that players are now beginning to draw. For example, all of the top-10 esports players in the world today rake in multi-million dollar paychecks — alongside other lucrative sponsorship deals — with the lowest earner on the list still earning a cool $3.5 million annually.
As a result, a growing chorus of mainstream voices believe that a marriage of the NFT market with that of the esports industry could lead to the latter experiencing a growth rate of unparalleled proportions. In this regard, one only need look at some existing sports-based NFTs that have seen their values surge exponentially following their launch.
Through the use of NFTs, esports teams are afforded the ability to produce various kinds of digital collectibles — ranging from limited signed player cards to digital merchandise to videos from popular players.
NFTs and esports go hand in hand
In recent months, a growing number of partnerships between the two worlds have continued to emerge. For example, leading esports giants BOOM Esports and Fact Revolution recently came together with Yieldly, the first decentralized finance (DeFi) platform on Algorand, as a means of exploring the NFT space comprehensively. The partnership enabled the two esports organizations to leverage bespoke, esports-centric NFTs to increase fan engagement; in return, Yieldly gained access to an entirely new demographic of users. Over the coming months, we will launch NFTs that enable close engagement between fans and teams on places like Discord and Twitter.
Similarly, late last year, the NBA started offering interested users NFTs representing limited-edition ownership of various art and videos of selected league moments. The market for these offerings has increased exponentially, with the total valuation of these collectibles currently estimated to be worth more than $7.5 billion.
Lastly, earlier this year, European esports juggernaut OG Esports revealed that it was going to enter the NFT fray, so much so that the organization was able to rake in a cool $1 million via the sale of just three digital artwork collections, putting them just behind Team Liquid in the esports earnings leaderboard.
The numbers suggest an explosion may be on the horizon
The symbiosis between NFTs and esports doesn’t just come from the ability to level up fan engagement; it’s also a matter of statistics and demographics. The average age of most esports players currently lies around 25, with some teenagers also having claimed championship titles in the past. Add to this the fact that millennials are most likely to own cryptocurrencies, It stands to reason that individuals operating within the two sectors are well exposed to the NFT/crypto market.
Lastly, most esports organizations have massive operational costs to bear — from salaries to everyday overheads. By making use of NFTs, they open the door for themselves to additional, sustainable revenue streams, and also interact with their respective fanbases in a much more streamlined and meaningful manner.
ETH Competitors are redefining the NFT sector. Here’s how
With the NFT market continuing to boom at an unfathomable rate, the need for an easy-to-use marketplace and wallet for these offerings has continued to rise.
Three ecosystems ripe for NFT utilization are Moonbeam, Polygon, and Algorand.
For example, on Algorand, multiple NFT marketplaces and other such offerings have sprung over the last few months, and the blockchain has plans to create its own NFT standard that will enable greater functionality, including the ability to assign royalties to NFT creators. In fact, as things stand, Algorand founder Silvio Micali is already in discussions with a number of leading organizations — including premier auction house Christie’s — so as to help facilitate the sale of various NFT collectibles via the project.
Alogrand also benefits from composability with other networks thanks to Yieldly Bridges, a mechanism that connects the Algorand ecosystem with other major blockchains, including Ethereum, Binance, and Polkadot.
All of this seems to quite clearly suggest that it is only a matter of time till we see more esports organizations moving towards the crypto sector. Consequently, it will be exciting to wait and see how the future of these seemingly unstoppable markets plays out from here.
About the Author
Sebastian Quinn, co-founder of Yieldly, and a veteran in developing blockchain and emerging technologies. Yieldly is a suite of DeFi tools built for the Algorand blockchain.
Featured image: ©DisobeyArtPh