Partnerships in the crypto space are a common event for reasons like engagement and adaption of the networks. With so many brands and famous individuals like Ronaldo joining hands with the space, NFTs and Metaverse saw a huge rise last year. However, Formula One racing teams have been ending their deals with the crypto sponsors in recent times. Joining the list of Formula One racing teams, the new one being Scuderia Ferrari, the racing division of luxury carmaker Ferrari, has ended its partnership with their crypto sponsor.
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According to recent news, Ferrari exited its multi-year partnership deals with Velas Blockchain and chip manufacturing giant Snapdragon. The decision has resulted in a cumulative loss of a whopping $55 million for the Italian team ahead of its 2023 season.
The Ferrari-Velas crypto partnership from 2021 which was agreed at $30 million a year was worked upon aiming for an increased amount of fan engagement through NFTs or non fungible tokens along with a few other shared initiatives. However, according to RacingNews365, the Scuderia Ferrari team was noncompliant with the clauses that permitted Velas in creating NFT images.
Back in November 2022, when the FTX fiasco happened, another one of the major Formula One team, Mercedes, was also a team that garnered a loss of $15 million after it suspended its partnership with FTX when the crypto exchange filed for its Chapter 11 bankruptcy. Another one to join the list of falling partnership was Red Bull Racing’s partnership with the Tezos Foundation. This partnership also suffered a similar fate like the ones with Ferrari and Mercedes, as the blockchain platform had reportedly took the decision to not to renew its agreement. When asked for reason, the company had said that there has been a strategy misalignment.
The team principal and CEO of the Mercedes-AMG Petronas F1 Team, Toto Wolff commented that the other Formula One racing teams may also come across the same fate or rather situations where the teams might end up cutting their crypto partnerships. Though this might be a case for the various teams, the relationships between the crypto ecosystem and the F1 spans beyond just partnerships. Tracing back to October of last year, Formula One filed trademarks for ‘F1’. In doing so it also revealed its plans to set up an online marketplace for crypto tokens, meta tokens, digital collectibles, and NFTs.
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As seen by the experts, while going through a bear market, Web3 projects have also taken up the lead in order to strengthen engagement between fans and sports leagues. What more the space is to bring, we are yet to witness!