The Ferrari-Velas partnership, which will begin in 2021 with an annual investment of $30 million, aims to increase fan engagement through non-fungible tokens (NFTs) and other sharing initiatives.
Scuderia Ferrari, the racing arm of luxury automaker Ferrari, joins a growing list of Formula 1 teams to end their partnerships with their cryptocurrency sponsors. Ferrari ended a multi-year deal with Velas Blockchain and chipmaker Snapdragon, costing the Italian team a cumulative $55 million ahead of the 2023 season.
Set to start in 2021, the partnership between Ferrari and Velas is set to be worth $30 million per year, with the aim of increasing fan engagement through non-fungible tokens (NFTs) and other joint initiatives. However, the team did not comply with the terms allowing Velas to create NFT images, RacingNews365 reported.
In November 2022, when the cryptocurrency exchange filed for Chapter 11 bankruptcy protection, Mercedes also suffered a $15 million loss after suspending its cooperation with FTX. Red Bull Racing’s partnership with the Tezos Foundation met a similar fate, with the blockchain company reportedly deciding not to renew the agreement, citing strategic misalignment.
Mercedes-AMG Petronas F1 team principal and chief executive Toto Wolff has warned other teams could find themselves in a similar situation. However, the relationship between F1 and the crypto ecosystem goes beyond a partnership. In October 2022, Formula 1 submitted the "F1" token when it announced plans to create an online marketplace for cryptocurrencies, meta-tokens, digital collectibles, crypto collectibles and NFTs.
In a bear market, the Web3 project has taken the lead in increasing the interaction between fans and sports leagues. Deloitte's "Sports Industry Outlook 2022" report predicts that the convergence of the real and digital worlds will accelerate as the market for NFTs and immersive technologies grows.
