Source: Cointelegraph
Original: “Utility, Volatility, and Longevity: A Deep Dive Through the Fog of Hype”
Author: James Newman, Director of Corporate Affairs at Chiliz
Perceptions of blockchain—especially among those outside the industry—are often dominated by stories of extreme volatility, bad actors, and speculative hype.
In recent months, the wild fluctuations of meme coins like HAWK, Fartcoin, and LIBRA have become the focus of the industry. Looking back to 2021, NFTs, despite generating a frenzy, failed to translate into long-term success due to a lack of real use cases—today, the average lifespan of NFT projects is 2.5 times shorter than that of cryptocurrency projects.
However, for many, the allure of such assets lies precisely in their volatility, which can turn a few dollars into wealth overnight. While NFTs and meme coins are undoubtedly part of Web3 culture, the core that sustains project development, maintains user engagement, and drives the industry forward is not volatility, but real solutions that address real pain points. Ultimately, the key lies in practical value.
Practical Value Creates Stability
Most blockchain project failures stem from creating demand for solutions that do not exist, rather than addressing existing problems. Assets that lack practical value are ultimately just fleeting bubbles of speculation. As digital assets continue to push the boundaries of technological innovation, humanity's pursuit of practicality and substantive value remains unchanged. More importantly, the practicality of digital assets promotes stability by shifting the focus from short-term speculation to substantive participation.
When assessing the stability of digital assets, longevity is more persuasive than short-term price fluctuations. While volatility is indeed an inherent characteristic of crypto assets, the true measure of resilience lies in whether a project can weather market cycles. Fan tokens have demonstrated this stability, while NFTs, despite their initial explosion, struggle to maintain long-term value beyond speculative hype.
Meme coins can generate buzz, but their lifecycles are fleeting—97% of meme coins issued in 2024 have already gone to zero. Of course, there are exceptions, but the vast majority do not stand the test of time.
In contrast, sports clubs have endured the trials of bull and bear markets since issuing fan tokens in 2018. Their resilience stems from practicality—fan tokens continuously innovate the way fans interact, bridging the gap between clubs and fans.
Solving Problems, Creating Value, Building Longevity
The connection between practicality and stability is evident: only digital assets that solve real problems can achieve sustainable adoption. Practical assets attract not speculators seeking quick profits, but users with genuine needs or interests in the project.
The rise of stablecoins confirms the importance of practical value.
Recent data shows that in the past six months, the market capitalization of stablecoins has increased from $160 billion to $230 billion. According to DeSpread research, there were only 27 stablecoins in 2021, but by July 2024, that number had reached 182, a 574% increase in three years. What’s the reason? Stablecoins provide real utility—whether for cross-border payments for small and medium-sized business owners or for developers seeking liquidity in DeFi protocols.
Institutional adoption is another barometer of asset practicality. Simply put, BlackRock's choice to launch a Bitcoin ETF instead of a Fartcoin ETF is because institutions favor assets that can create substantive value for clients rather than short-term speculative products filled with hype.
For sports fans, even if they have never set foot in the home stadium, the emotional connection with the team remains strong. Fan tokens provide global fans with more interactive ways to engage through direct participation and reward mechanisms, filling the gap in this emotional connection.
Whether participating in team decision-making votes, gaining exclusive rights, staking tokens for additional benefits, or simply owning a part of the team's digital identity, fan tokens offer practical value throughout their entire lifecycle.
The Future of Digital Assets
Satoshi Nakamoto created Bitcoin to address the injustices of the financial system. Sixteen years later, despite the myriad applications of blockchain technology, this remains the essential reality of crypto assets.
The future of digital assets will be defined by their ability to solve real problems, a fact that clubs are beginning to recognize. Therefore, they not only issue fan tokens but also actively license IP to enhance asset credibility. When the world's top sports brands embrace blockchain in this way, a clear signal emerges: the new era of fan interaction is not just on the horizon—it has already arrived. And we are just getting started.
Beyond fan tokens, blockchain is multidimensionally reshaping the sports industry, with various application scenarios increasingly intertwined. For example, Tether's investment in Juventus vividly illustrates the deep integration of blockchain in investment, sponsorship, and fan interaction, as the price of its fan token skyrocketed. As crypto sponsorship surges in the sports world in 2024, this integration will accelerate as clubs, leagues, and brands explore new applications of Web3 technology—creating richer interactive experiences and opening new revenue streams.
Author: James Newman, Director of Corporate Affairs at Chiliz
Related: The Next Major Breakthrough in Blockchain: Areas to Watch
This article is for informational purposes only and does not constitute any legal or investment advice. The views expressed represent the author's personal opinions and do not reflect the stance of Cointelegraph.
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