Want to swap a robot?

There was a mass Panini sticker swap at Wembley on the day of the Women’s Euros final. Panini had only produced a limited run of player cards so this was the chance some fans had been waiting for to finally get their hands on Lucy Bronze.

A couple of weeks earlier, Charlton Athletic Supporters Trust had attended a Football Supporters Association briefing on crypto, NFTs (non-fungible tokens) and DAO (decentralised autonomous organisations).

Whether it is the Robots DAO logo on our shorts and perimeter advertising boards or the ownership structure at Crawley Town, crypto and NFTs and DAOs are popping up everywhere in football. So, it as well that fans know a bit more about them.

It all started in 2008 with the financial crisis.

Bitcoin was the first cryptocurrency created by someone calling themselves Satoshi Nakamoto, as a peer-to-peer version of electronic money. Bitcoin is backed by blockchain software technology.

Satoshi’s name is a pseudonym. The real identity of Satoshi Nakamoto is not publicly known.

Mystery and anonymity have become the norm in the crypto world ever since. The people behind Generous Robots DAO appear to have continued in this tradition, hiding behind avatars, bandanas, and sunglasses. When we spoke to the club about the sponsorship, Thomas Sandgaard mentioned that he had met the ‘young businessmen’, but beyond age bracket and gender, that doesn’t give us too many clues as to their identity

Bitcoin was a response to the instability of the global financial markets (and what is referred to as fractional-reserve banking and fiat money). Crypto was born as an alternative means of exchange that didn’t require the banks as intermediaries.

In recent years cryptocurrency itself has experienced a period of high volatility and instability. There are now over 1,500 cryptocurrencies in circulation. It is likely that supporters will have come across people who have speculated on crypto. Many of those will have lost money.

There have been serious questions asked about the carbon footprint of crypto. Bitcoins are released by being ‘mined’ and that uses an enormous amount of processing power and electricity. Crypto companies are making noises about reducing their carbon footprint, but they have a very long way to go as current estimates suggest that crypto-coin mining is responsible for 22-23 million tonnes of carbon emissions per year, or the equivalent to the entire emissions of Sri Lanka.

It is worth noting that Charlton Athletic’s lead sponsor for the 22/23 season is RSK, a firm of environmental consultants

By 2014 NFTs (Non Fungible Tokens) had arrived. In simple terms, an NFT is a unique piece of code that is built using the same kind of blockchain technology as cryptocurrency, but that’s where the similarity ends.

Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged for one another. They’re also equal in value—one pound is always worth the same as any other pound; one Bitcoin is always equal to another Bitcoin. Crypto’s fungibility makes it a ‘trusted’ currency amongst fellow crypto users as means of conducting transactions on the blockchain

NFTs are different. Each NFT has a ‘digital signature’ that makes it impossible for NFTs to be exchanged for or equal to one another.  Hence, they are non-fungible

The code is usually associated with a unique image or piece of film. If you own the code, you own the image. The code can be bought or sold. Hence the images can be bought or sold. The code gives you proof of ownership (not to be confused with legal ownership rights). The images themselves can make the token desirable, collectable and, of course, worth trading. There is now an international market in NFTs running alongside the traditional (and real) art market being facilitated by the same auction houses such as Sotherby’s

The global market for NFTs was worth $41 billion in 2021 approaching the total value of the entire global fine art market.

NFTs have arrived in football.

Fan tokens are now commonplace in football and are a form of NFT linked to a specific cryptocurrency; Socios & Chiliz. As they arrived, there soon began to be issues for fans to be worried about. For example, last year two promotions for Arsenal fan tokens were banned by the Advertising Standards Authority (ASA) for misleading fans. These schemes not only offer images, but also a chance for special influence at the club. The deal Charlton Athletic has struck with Generous Robots DAO is not a fan token deal.

However, alongside fan tokens, NFTs are gaining popularity as so called ‘investment opportunities’, heavily promoted by footballers and celebrities. Generous Robots DAO is an organization that offers ‘investment opportunities’.

To these NFT investment organisations, football clubs still struggling to build back profits after COVID could look like needy partners. As this article details, FC Barcelona, the club that once prided itself in only carrying UNICEF as shirt sponsors, was reluctant to enter into deals with NFT or crypto organisations. However, COVID changed everything.

NFTs are susceptible to pump & dump scams. NFTs are said to be ‘one of a kind’, or at least ‘one of a very limited run’, and whilst they may have unique identifying codes the entity owning the NFT base source can, and do, just issue more. This undermines the major selling point of NFTs i.e. their ‘digital scarcity’.

In this video an advocate explains how the Generous Robot DAO investment scheme works. Note: CAST does not endorse this video. In a regulated financial market such as share-dealing, the video would not be compliant with the ASA or Financial Conduct Authority regulations in place to govern the marketing of all forms of investment. However, NFTs and crypto are not regulated

Generous Robots is a DAO (decentralised autonomous organisation). DAOs have been marketed as a way of democratising organisations. Each DAO is based on an encrypted ledger of transactions including ownership tokens. Ownership of NFTs grant voting rights in the decision-making processes of DAOs. In the case of Generous Robots DAO, the tokens are pooled with other tokens into an ‘investment’ fund. As with many NFT models DAOs tend to be based on the Ethereum blockchain rather than Bitcoin.

Regulation of DAOs is weak. The State of Wyoming recognises DAOs as LLCs (Limited Liability Companies) but that is about it. It is not entirely clear why (or at least not to us anyway) but the Class of 92 has one of the few DAOs in which the people have dropped the shades and bandanas https://www.co92dao.com/

We don’t suppose it takes a genius to work out why these outfits are swooping in on football. Premier League and La Liga clubs are famous all around the world and they already have massive fanbases hungry for souvenirs and collectables. The football fanbase has a higher-than-average tendency to bet. In its players, the game provides a good source of NFT influencers (oh and John Terry). Right now, clubs large and small need the money

So, yet again as Charlton Supporters, we might go, ‘here we go again, why does it have to be us? Haven’t we had enough of dodgy for one lifetime?’ It is not necessarily reassuring, but we’re not alone. The combination of unregulated DAOs, unregulated crypto, speculation and unregulated NFTs has set off alarm bells ringing amongst football supporters especially as we are about to enter a recession.

It is worth noting again that at least our club has acknowledged that this is a sector that carries a lot of risk, and we should not expect Generous Robots DAO to market directly at us. However, Generous Robots DAO are sponsoring Charlton to raise awareness and hope that some of our ‘brand’ kudos rubs off on them. When it comes to our brand, we are a community, family-oriented and friendly club. Let’s not forget that if some of our image rubs off on the robots, then some of theirs will rub off on us in return

While we understand that the club needs the money and are pleased that the club acknowledges the risks, if it was down to us, we would have sought sponsorship from an organisation that is more consistent with the values of the club and its supporters. We should be very careful of whose company we keep.

Here is @uglygame excellent thread looking into the sponsors

CAST is affiliated to The Football Supporters Association. At the recent AGM we were a signatory to a motion put forward by the West Ham Supporters Trust to call on the FSA to work with the FA and the football leagues on some common self-regulatory standards for any crypto partnership in football. (Please see below for full wording) We will do our best to keep supporters informed of developments in this regard

In the meantime, if I want to be excited about buying something in football of little material worth, I think I’ll stick to Panini stickers and if I want to participate in a lottery, I’m going to stick to Valley Gold. At least with Valley Gold, I know where the money is going

Never invest more than you can afford to lose

(With grateful thanks to Andy Walsh of the FSA for his excellent briefing)

 

Here is the FSA Motion in full:

Cryptocurrency and Football 

Many football clubs are entering into partnerships with cryptocurrency providers, including those with product offerings that encourage fans to purchase cryptocurrency backed tokens that provide so called ‘engagement opportunities’ with their clubs.

It is further noted that cryptocurrencies are a high-risk investment product not currently regulated in the UK.

This motion calls on the FSA is to develop a plan of action to address the proliferation of these schemes across football that includes the following activity:

• Engagement with the Football Association, Premier League and Football League to work collectively on the introduction of common self-regulatory standards for any cryptocurrency partnership entered into by a football club and to;
• Develop an information awareness campaign for football fans advising them of the risks to their capital of investing in cryptocurrencies
• Lobbying activity to the Government (DCMS and Treasury) to call for the introduction of statutory regulation of cryptocurrency in relation to football.
• Calls upon football clubs that do have partnerships with cryptocurrency partners to ensure that they undertake due diligence before entering into those arrangements and to meet with the Supporters Trusts and fans groups to discuss all marketing and promotional activity before it us undertaken to ensure high levels of consumer protection

Proposed by West Ham United Supporters’ Trust

Seconded by Arsenal Supporters’ Trust

 

Countersigned by

Manchester United Supporters’ Trust  -  PL

Tottenham Hotspur Supporters’ Trust -  PL

MCFC  Fans Foodbank -  PL

Newcastle United Supporters’ Trust -  PL

Cherries Trust -  PL

Talking Cherries -  PL

Griffin Park Grapevine (Brentford FC) -  PL

Arsenal Disabled Supporters Association -  PL

Everton Fan Advisory Board -  PL

Everton Fans’ Forum   -  PL

Fulham Supporters’ Trust  -  PL

Aston Villa Supporters’ Trust -  PL

Wolves  1877 Trust   -  PL

Foxes Trust -  PL

Brighton and Hove Albion Supporters’ Club-  PL

Liverpool Disabled Supporters Association-  PL

Spirit of Shankly-  PL

Crystal Palace Supporters’ Trust-  PL

Nottingham Forest Supporters’ Trust-  PL

Blackpool Supporters’  Trust -Championship		Championship
Burnley FC Supporters’ Groups- Championship		Championship
Charlton Athletic  Supporters’ Trust – League One		One
RamsActive – League One		One
Shrewsbury Town Supporters Parliament- League One		One

 

If you would like to join over 2600 Charlton supporters as a member of CAST:

https://www.castrust.org/join/