Scuderia Ferrari, the racing division of luxury car maker Ferrari, has joined the growing list of Formula One racing teams in ending partnerships with their cryptocurrency sponsors. Ferrari exited its multi-year partnership agreements with Velas Blockchain and chip-making giant Snapdragon, resulting in a cumulative loss of $55 million for the Italian team ahead of the 2023 season.
The Ferrari-Velas partnership starting in 2021, set at $30 million a year, was aimed at increasing fan engagement through non-fungible tokens (NFTs) and other shared initiatives. However, the team did not comply with the clauses that allow Velas to create NFT images, according to to RacingNews365.
In November 2022, Mercedes also suffered a $15 million loss after discontinuing its partnership with FTX as the cryptocurrency exchange filed for Chapter 11 bankruptcy. Red Bull Racing's partnership with the Tezos Foundation suffered a similar fate to that of the blockchain company. He decided not renew their deal citing a strategy misalignment.
Toto Wolff, the team principal and CEO of the Mercedes-AMG Petronas F1 team, warned that other teams could find themselves in a similar situation. However, the relationship between F1 and the crypto ecosystem goes beyond partnerships. In October 2022, Formula One filed 'F1' trademarks as he revealed plans to establish an online marketplace for cryptocurrencies, meta tokens, digital collectibles, crypto collectibles, and NFTs.
Related: The Argentine soccer league scores association in the metaverse after the triumph in the World Cup
In the midst of a bear market, Web3 projects have taken the lead in strengthening engagement between fans and sports leagues.
Deloitte's "2022 Sports Industry Outlook" report predicted an acceleration in the blending of the real and digital worlds, along with growing markets for NFTs and immersive technologies. As Cointelegraph reported, the lack of user-friendly platforms is the biggest challenge for mainstream adoption.
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