Tokenization Meets the eSports Industry

by | Oct 27, 2020 | Industry | 0 comments

When it comes to blockchain application, it is never a matter of if, but when. If you consider the milestones that this technology has made in the last ten years, there is one industry that has been eclipsed by the ‘big boys’: the rapidly booming eSports market.

Almost every sector of the economy can benefit from the use of blockchain technology. An untapped market that is ripe for blockchain is the eSports industry. eSports stands for ‘electronic sports,’ referring to competitive video games where players compete against each other for prizes. The most popular eSports game is League of Legends, which boasts of more than 67 million active monthly users.

The Problem with eSports

While eSports are valuable assets that most investors want to have a hand on, few have access to this asset class. The hindrance is that eSports teams are illiquid assets, which are not easily traded. Even when a team’s value increases, owners may be unable to sell their stake because of the lack of a ready market. Many investors are willing, but they fail to meet the minimum investment amount. Mostly, owners are forced to provide illiquidity discounts to entice investors.

Besides, the online eSports community encounters friction where winnings are concerned. Since the industry is still at its infancy stages with lack of proper laws and systems, there is little transparency in the distribution of prize funds, challenges in withdrawing funds, and many dishonest intermediaries who con players.

Tokenization and Blockchain

The issues highlighted above can be solved by leveraging the blockchain in the eSports industry. One of the significant applications of blockchain is tokenization, which refers to the process of issuing blockchain tokens- security tokens in particular- that digitally represent real tradable assets. It can be likened to the traditional method of securitization, with a modern twist. Asset-backed tokens (ABTs) are created via a form of initial coin offering (ICO) commonly known as a security token offering (STO) to distinguish them from other tokens.

Tokenization of eSports allows fractional ownership of teams, reducing the minimum investment amount in the process. Fractional ownership creates a more significant influx of investment since smaller businesses and investors can participate in the market, making eSports a more liquid asset class.

Even fans can buy tokens of their favorite teams, enabling them to vote, meet their favorite stars, access signed jerseys and more. Fan investors would definitely experience a stronger bond with their favorite teams.

Entering ownership rights into a blockchain network enables an immutable record of ownership. Documents that support every transaction are kept in the ledger. The ledger can be used in live and online activities, recording the teams’ scores and distributing the prizes. All procedures are transparent, and the database can be accessed by all participants, fostering trust among them.

Automated compliance is another benefit that encodes compliance regulations, like anti-money laundering, know-your-customer, and various jurisdictions’ security laws to save time and money.

The other advantage of tokenization is minimizing the cost of paperwork. Traditionally, transferring ownership involved lawyers and company secretaries to handle the paperwork of the transaction. Tokenization automates the process, streamlining it like never before.

With the support of blockchain, the eSports market will be more accessible and transparent to investors, players, and fans.

Tokenizer Blockchain Banking Platform

The Tokenizer is a blockchain investment banking system that champions accessible, transparent, and safe financial services. We believe that everyone deserves equal access to investment and fundraising opportunities. That is why we are democratizing access to capital for investors and fundraisers by making investing and fundraising efficient, safe, and accessible to everyone.

Are you in need of raising funds or investing in security tokens? Apply to raise funds through Tokenizer by filling this application form. If you want to invest in security tokens, sign up for a Tokenizer Investment Account today, and if you want to liquidate and trade-in Asset-Backed Tokens, we have a decentralized exchange designed for you! You can also contact us to order a metallic crypto card at $149 only.

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