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Sorare, a French company that distributes non-fungible tokens (NFTs) in the shape of football trading cards, has raised $680 million (£498 million). Fans utilize the NFT-based cards to construct fantasy football teams that may then “play” against them other. Softbank, a tech investor, led the round, with ex-England player Rio Ferdinand also contributing. Concerns about financial risk and environmental effect have sparked debate over NFTs.
A Non-Fungible Token (NFT) is a “one-of-a-kind” digital asset that may be purchased and traded like any other asset. A record of who owns what, similar to crypto-currency, is recorded on a shared ledger known as the blockchain, which is maintained by thousands of computers across the world. At auctions, players can purchase cards from Sorare, or fans can sell cards they possess to other players. Since January 2021, Sorare says that $150 million worth of cards have been exchanged on the site. The current investment values it at $4.3 billion (£3.15 billion). The cards may also be sold as NFTs on sites like OpenSea and Rarible. Sorare claims to have 600,000 registered users and agreements with over 180 football clubs. Several athletes, notably Gerard Pique of Spain and Antoine Griezmann of France, have invested in the firm.
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The company recently struck a partnership with La Liga in Spain and told the Telegraph that it intended to have “something to say” regarding the Premier League soon. Some journalists, charities, and fan groups have begun to wonder if crypto-assets and sports are compatible. Sorare isn’t the only company that has partnered with crypto-based asset clubs. Barcelona, Juventus, Manchester City, and Paris Saint-Germain have previously made deals with a company called Socios to offer crypto-currency-based fan tokens. On its website, the company touts tokens as a method to influence decisions of your favorite tunlock VIP prizes, access to special promos, games, chat, and a superfan recognition. However, because the tokens can be exchanged, some fan organizations are concerned that the teams are promoting crypto-currency speculation.
Maintaining a blockchain, depending on the technology employed necessitates a significant amount of computer power as well as a significant carbon footprint. Financial impropriety and criminality are a concern, just as they are in traditional investment, but consumer safeguards are typically weaker. A lack of regulation is also a source of worry. OpenSea, the world’s largest digital collectible marketplace, has reported that one employee utilized inside information to purchase NFTs before they were marketed on the platform. The event, according to CEO Devin Finzer, was very upsetting and did not reflect the team’s beliefs. Insider trading, or the exploitation of non-public information about a firm for financial gain, is prohibited in most regulated markets. The NFT market, on the other hand, is unrestricted.