In recent years, the cryptocurrency industry has revolutionized and gone through major changes. Progressively developers and users have started using blockchain technology in innovative ways. Among the changes, is the tokenization of sports which involves the pairing of traditional sports and modern blockchain technology.
What is tokenization?
Blockchain tokenization can be defined as a method of creating a digital representation of any asset or any type of tradable rights. These tokens can be easily tradable and the tokenized rights are similar to Universal United States Dollar (UPUSD) and Tether (USDT).
What is StarsX?
StarsX is a platform that allows its users to carry on with the exchanges and investments in NFTs. The space is powered by the Ethereum and Matic Layer 2 blockchains. StarsX provides a platform for active users to communicate and trade with other sporting fans from all over the world.
The primary factor in the platform is the Fractional NFTs. These are designed in such a way that they represent the real-life performance of any player. The tokenization of players suggests instead of receiving a monthly salary, they will get the majority of their salary in the form of a lump sum figure upfront. This act of tokenization has created ample opportunities for players and investors to earn maximum wealth.
Benefits of tokenization
Sports teams and players can be distributed to a pool of investors through the method of tokenization. The amount of investors related to project size is limitless, when a large project which requires many investors, a pool of investors can reach over 10,000. In return, investors get returns on ticket sales, merchandise, concessions, and other related costs while performing transactions with sporting teams. However, all these are still in the developing process with the tokenization industry.
Is tokenization legal?
There are multiple jurisdictions available to explain the legality of tokenization. It depends upon the leagues and whether they will interfere with the teams or allow the players to enjoy ownership of their tokenization.
Tokenization can be beneficial for everyone, however there might be risks associated with it. Tokenization is still a new concept and has limited users, which suggests long-term results of successfully issued dividends are limited. The annual salary and contracts for players are generally safe and secure, however the risk of injury must be considered. Additionally, there can be penalties that could reduce the total payable amount at the end of the year. Players may also be reluctant to perform well after salary has been paid, which may affect the player’s practice time and the zeal to compete.
Tokenization in StarsX
The token involved in the StarsX is ERC- 721 STAX. This cryptographic token is unique and is never interchangeable. These tokens are the representation of shares in the NFT. This allows the users to store, buy or sell more tokens as per their wishes.