Why Are Crypto Businesses Pumping Money in the UFC? The MMA Corner Staff March 12, 2022 News The Ultimate Fighting Championship (UFC) and Crypto.com, one of the world’s fastest-growing cryptocurrency exchanges, unveiled extraordinary long-term cooperation last July. Crypto.com became the UFC’s first-ever global official fight kit partner as a result of the contract, which permitted the cryptocurrency platform’s branding to be embroidered on UFC bout equipment used by fighters and their corner members during matches on which you can bet by visiting the top MMA & UFC betting sites at Bookmaker-Expert.com. The arrangement, which is worth $175 million over ten years, also saw the development of a new sponsorship category for the world’s most popular MMA organization, with Crypto.com being named the UFC’s first official cryptocurrency platform affiliate. UFC Aims to Establish Tokens That was UFC’s latest but not the only journey into the ever-changing world of cryptocurrencies, which are digital currencies or binary data that may be used as a medium of exchange. The UFC reportedly submitted multiple new trademark applications in April 2021, signaling plans to establish a UFC-branded cryptocurrency as well as an app to manage non-fungible tokens (NFTs), which are effectively digital collectibles, and other digital assets. Dapper Labs, the blockchain game developer behind the NBA Top Shots NFT marketplace and the inventor of CryptoKitties, has struck a licensing arrangement with the organization. The following month, the organization announced plans to establish a $UFC Fan Token fan interaction and incentives platform Socios.com in collaboration with Chiliz, a major digital currency and blockchain supplier for the sports and entertainment industries. The UFC would be the most recent of over 30 major sports properties to deal with Chiliz, which includes European soccer heavyweights Barcelona, Paris Saint-Germain, Milan, and Manchester City. UFC’s Interest in Crypto Is Unsurprising Given its success in other sports leagues, it was predictable that the UFC would be enthusiastic about virtual currency. As of April 2021, approximately half a million collectors had made over 4 million transactions on Top Shot NFT department-store within the NBA, where basketball fans may buy video highlights (only the clip, not the copyright). NFTs sold for nearly $400,000 in some cases. Apart from the possibility for rapid riches, the UFC is likely to see the crypto industry as a way to harvest significant endorsement payments from cryptocurrency exchanges with large cash reserves. However, the UFC’s move to crypto, as well as other sports organizations’ zeal for crypto deals, raises concerns about increased costs for spectators, the tokenization of sports through digital currencies, and increased scrutiny owing to a lack of regulation. In order to attract new clients, Singapore-based Crypto.com and other cryptocurrency exchanges and blockchain enterprises are investing millions in sponsorships and licensing arrangements. According to recent studies, sports fans and bettors are more conversant with cryptocurrencies like Bitcoin and Ethereum than the general public. As a result, cryptocurrency became a popular sponsorship category in sports very rapidly. Individual sports franchises such as Paris Saint-Germain, the NHL’s Montreal Canadiens, and the NBA’s Miami Heat have partnered with cryptocurrency companies – the first two with Crypto.com and the Heat with FTX. High-profile athletes have also backed these transactions. FTX, a two-year-old exchange based in the Bahamas, has announced a $20 million ad campaign starring Tom Brady, the legendary NFL quarterback. The NBA star Stephen Curry was later engaged by the company. Supporters of MMA Are Very Much Familiar with a Cryptocurrency Surprisingly, supporters of niche sports were even more familiar with cryptocurrency than fans of the major leagues, according to surveys. This included MMA and explains Crypto.com’s partnerships with the UFC. It appears that the approach is working. Binance, the world’s largest cryptocurrency exchange by volume, is apparently struggling to keep its throne. Binance’s volume has reportedly plummeted by 45%, while Coinbase, Crypto.com, and FTX have all witnessed big boosts. While the spike in brokerage volumes wasn’t necessarily a direct outcome of the sports deals (Binance is already facing regulatory problems in a number of countries), it could’ve influenced the recent shift. Companies aiming to push addictive behavior online have long targeted sports enthusiasts as easy prey. Gambling corporations sponsor almost 40% of the English Premier League’s jerseys. And as the number of gambling sponsorships grew, so did the amount of money they made from new signups who were urged to try online sports betting. Many of the same reasons apply to cryptocurrencies, which sports fans appear to be embracing with the same zeal and zeal as gambling, such as the so-called fan tokes issued by sports, which supporters purchase using cryptocurrencies. Fan tokens are exchanged on cryptocurrency exchanges and have variable pricing. Because of the price volatility, professional traders may be able to take advantage of fans who are unfamiliar with cryptocurrencies and digital assets. In the case of the UFC, the organization has avoided any obviously crypto-related collaborations. However, because of the organization’s unbalanced revenue share with athletes, profits from cryptocurrency sponsorships are unlikely to reach the combatants. Fighters Won’t Receive a Direct Cut of the UFC’s Crypto Arrangements Unlike the great majority of sports leagues and organizations, which pay athletes between 47 and 50% of revenue, the UFC has traditionally compensated fighters between 16 and 19% of revenue. Only 16% of the organization’s $900 million in income was paid out to the UFC’s approximately 600 competitors in 2019. Several ex-UFC fighters launched a $5 billion antitrust lawsuit against UFC’s subsidiary, Zuffa LLC, in December 2014, due to the UFC’s monopoly over its fighters. Zuffa LLC is accused of acquiring and sustaining exclusivity in the MMA market without permission, according to the lawsuit. According to the lawsuit, the UFC engaged in predatory activities and participated in a nefarious scheme to stifle competition, resulting in fighters being paid a portion of what they would obtain in a competitive marketplace. Fighters, for example, won’t receive a direct cut of the UFC’s Crypto.com arrangement. They will, however, be able to work as compensated brand ambassadors and negotiate individual agreements with the cryptocurrency corporation. When the UFC announced an expanded collaboration with Crypto.com, which featured an exclusive line of NFTs, it was disclosed that fighters will receive 50% of the proceeds from NFT purchases. Despite these minor compromises, the UFC’s participation in the current cryptocurrency boom will primarily help the company’s financial line. Fans are likely to lose money by putting money in fan tokens and watered-down digital memorabilia, while UFC fighters are unlikely to make much more money – at least not as much as they could through collective bargaining.