Ferrari severed relations with their crypto sponsor

by Jan 8, 2023CryptoNews0 comments

The Ferrari-Velas agreement, which was slated to start in 2021 and cost $30 million annually, intended to boost fan involvement through nonfungible tokens (NFTs) and other joint projects. The racing unit of premium automaker Ferrari, Scuderia Ferrari, has joined the growing number of Formula One teams that have ended their relationships with their cryptocurrency sponsors.

Before the 2023 season, Ferrari ended their multi-year collaboration agreements with Velas Blockchain and the world’s largest chip manufacturer, Snapdragon, incurring a combined $55 million loss for the Italian team.

The Ferrari-Velas agreement, which was slated to start in 2021 and cost $30 million annually, intended to boost fan involvement through nonfungible tokens (NFTs) and other joint projects. RacingNews365 claims that the team violated the provisions allowing Velas to produce NFT photos.

Post FTX

As FTX filed for Chapter 11 bankruptcy in November 2022, Mercedes also suffered a loss of $15 million and ended its cooperation with the cryptocurrency exchange. A similar fate befell Red Bull Racing’s alliance with Tezos Foundation when the blockchain startup apparently opted not to extend its contract due to strategic incompatibility.

The CEO and team principal of the Mercedes-AMG Petronas F1 Team, Toto Wolff, forewarned that similar circumstances might arise for other teams. However, there are more than just agreements between F1 and the crypto community. As it unveiled plans to establish an online marketplace for cryptocurrencies, meta tokens, digital collectibles, crypto-collectibles, and NFTs in October 2022, Formula One filed trademark applications for the “F1” moniker.

Web3 initiatives have taken the lead in boosting fan engagement with sports leagues during a weak market.

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In addition to rising markets for NFTs and immersive technologies, Deloitte’s “2022 Sports Industry Outlook” research anticipated accelerating the merging of the physical and digital worlds. According to Cointelegraph, the biggest obstacle to widespread adoption is the need for more user-friendly platforms.

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