Firstpost Explains: What are 'fan tokens’, the cryptocurrency in Lionel Messi’s PSG package?

Football star Lionel Messi’s transfer to Ligue 1 French club Paris Saint Germain (PSG) included some payment in cryptocurrency fan tokens. The 34-year-old, who left Barcelona after 21 years last week, signed a two-year contract with PSG, with the option of an additional year. The club also revealed on Thursday it had paid a signing on bonus to the player in PSG’s own virtual currency which it calls $PSG Fan Tokens, originally sold at 2 euros each and currently trading at over 30 euros. “The coins are there to create a link between the fans and the club, and it’s the first time we have used them in this way,” the Parisians said in a statement. PSG quickly emerged as the favourites to sign Messi following the shock of his departure last week from Barcelona and he arrives eyeing a fifth Champions League, with the most recent of his four victories with his old club coming in 2015. They are reportedly paying 35 million euros ($41 million) a year to Messi, who will wear the number 30 jersey — with fans continuing to line up outside the club’s different shops in the capital to buy the shirt with his name and number on the back. What are fan tokens?  Fan tokens have a lot in common with other cryptocurrencies. Just like bitcoin and other cryptocurrencies, they can be traded on exchanges and their value can drastically fluctuate overnight. These fan tokens are created by a crypto platform called Socios and allows fans to gain access to exclusive club content, games etc. by purchasing said crypto tokens with real-world money. A kind of non-fungible token, a fan token allows the holders to have a say on mostly minor decisions related to their clubs. As per the Socios website, fan token is “a new digital asset for fans” that gives them the power to influence decisions of their teams, unlock VIP rewards and access exclusive promotions, games, chat and a superfan recognition. Which other teams are using fan tokens? The concept of fan tokens isn’t new or only specific to football clubs. As per Socio’s website, other teams that have launched or are about to launch their own fan tokens are AC Milan, Inter Milan and AS Roma from Italy; Arsenal, Aston Villa, Manchester City from England; Barcelona and Atletico Madrid from Spain; Aston Martin F1 Team, Alfa Romeo Racing Team, and the UFC. How many tokens did Messi receive as part of his package? Are there previous examples of players getting paid in cryptocurrency?  While PSG did reveal that tokens were a ‘‘significant" part of Messi’s welcome package that has an estimated report value of 25-30 million euros ($29-35 million), the club did not reveal the exact proportion of tokens in his package. Turkish club Harunustaspor in 2018 claimed that it was the first football club to purchase a football player (Omar Faruk Kiroglu) via bitcoin. The player received 0.0524 in bitcoin and 2,500 Turkish Lira as part of the deal. In January 2021, former Real Madrid B striker David Barral became the first player to be solely purchased by cryptocurrency after being signed by Segunda B side DUX Internacional de Madrid. In 2018, Gibraltar United FC revealed that through a partnership with Quantocoin, their players would be able to receive payment in cryptocurrency. With inputs from AFP