Is it still worth listing your token at CEX?

If you’ve watched the UFC lately, you may have noticed a new sponsor sprawled across the front of the fighter shirts: Crypto.com. Likewise, if you're a fan of Formula 1, you’ve likely noticed the proliferation of crypto companies entering the space, with logos occupying prime real estate on the cars. From Redbull’s partnership with Tezos to Aston Martin’s partnership with Crypto.com and Fantom’s partnership with Alpha Tauri, there seems to be no shortage of crypto companies willing to shell out big bucks to partner with mainstream sports brands.

A case in point is the crypto exchange FTX, which agreed to pay over $135 million for the naming rights to what was formerly the American Airlines Arena, home of the NBA team Miami Heat. At first glance, this might seem like a lot of money, but crypto companies are gaining more than just visibility. Many of these partnerships secure exclusivity for a range of on-chain initiatives that could lead to significant revenue growth in the near future.

IP Rights
Most sports teams are sitting on a goldmine of content. Their intellectual property (IP) can be used for NFTs and sold to fans and speculators alike. Anything from F1 cars to iconic moments or apparel can be turned into NFTs and commoditized. While many sports properties are aware of the NFT market, few fully understand the immense value this potential revenue stream offers. It’s similar to how the music industry initially undervalued the potential of streaming services.

This knowledge gap creates an opportunity for crypto and blockchain companies to secure IP entitlements and earn mutual revenues through the release of premium NFTs. A great example of this is the Tezos and Redbull partnership. Beyond securing a prime spot for their logo on Redbull’s Formula One car, Tezos also secured on-chain exclusivity with Redbull Racing. This means that any blockchain-related activities, including the creation and sale of NFTs, must be done on the Tezos blockchain. Such strategic deals help drive adoption and build momentum by facilitating value transactions on the blockchain.

On-Chain Exclusivity
There are many blockchain-based activities that go beyond the creation and sale of NFTs, such as ticketing, digital payments, and the distribution of social tokens. By securing on-chain exclusivity, crypto companies can also lock down rights to these emerging blockchain applications. The revenue potential from these activities could be game-changing if executed correctly, offering sponsoring companies a way to recoup their investments.

Who Are the Sponsors?
The initial wave of sponsors includes centralized cryptocurrency exchanges, Layer 1 blockchain protocols, and companies offering crypto wealth management products. These companies are in an ideal position to help sports teams develop their IP, transition operations onto the blockchain, or drive successful user acquisition campaigns through enhanced exposure. With the necessary funding and ambition, they can justify the large capital outlay required to support these high-profile partnerships.

The Future
As these engagements develop and entertainment brands begin to take notice, we can expect to see more niche partnerships beyond sports and into the broader entertainment industry. Concerts and E-sporting events are likely to be the next frontiers for crypto branding and partnerships. Blockchain technology has the potential to revolutionize fan engagement and other core business functions for these properties. The key question isn’t if they’ll recognize the opportunity, but when they’ll join the herd in the adoption arc.

At Kairon Labs, we are uniquely positioned as an independent dealmaker to guide and educate large IP rights holders toward the most suited and legitimate crypto sponsors. Over the last few months, we have built a track record of successfully closing some of these significant deals.

Interested in exploring these opportunities? Reach out to our team for a conversation about how we can help!