- Ferrari lost $55M after terminating collaboration arrangements with Velas Blockchain.
- The team was not in accordance with the provisions that allow Velas to produce NFT.
The Ferrari racing division, known as Scuderia Ferrari, has severed ties with its cryptocurrency sponsor, joining a growing number of Formula One racing teams doing so. Ferrari lost $55 million after terminating its multi-year collaboration arrangements with Velas Blockchain and chip manufacturing giant Snapdragon in preparation for the 2023 season.
Ferrari and Velas’ $30 million annual cooperation which started in 2021 focused on boosting fan interaction with the use of non-fungible tokens (NFTs) and other joint projects. However, RacingNews365 reports that the team was not in accordance with the provisions that allow Velas to produce NFT.
In November 2022, when the cryptocurrency exchange FTX filed for Chapter 11 bankruptcy, Mercedes also lost $15 million when it decided to halt its cooperation with the company. Tezos Foundation, another blockchain startup that partnered with Red Bull Racing, apparently opted not to continue its arrangement due to a lack of strategic fit.
Focusing on Direct Connection With Fans
Mercedes-AMG Petronas F1 Team principal and chief executive officer Toto Wolff expressed concern that other teams would face a similar predicament. Yet the ties between Formula One and the cryptocurrency sector go much beyond simple collaboration. In October 2022, Formula One confirmed its intention to launch an online marketplace for cryptocurrencies, meta tokens, digital collectibles, crypto-collectibles, and NFTs by filing trademarks using the stylized letters “F1.”
Web3 initiatives have stepped up to the plate to forge deeper connections between sports fans and their favorite teams while the economy has taken a nosedive.
According to Deloitte’s “2022 Sports Industry Outlook,” the convergence of the physical and virtual worlds will quicken, and markets for NFTs and immersive technologies will expand.
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