Sorare is a blockchain-based fantasy football game that has been garnering a lot of attention lately. It raised a record-breaking $680m in Series B funding last year and has been making waves in the NFT space.
As it is a blockchain-based game with a lot of excitement around it, many people have sought information about a Sorare cryptocurrency token.
We will take a look below at the current status regarding the Sorare token and what exactly you need to know about it.
What is Sorare?
Sorare is a blockchain-based platform that allows you to buy NFTs (Non-Fungible Tokens) of footballers from around the world. These are digital versions of popular trading cards that have existed in physical form for many decades, like baseball cards in the US or Panini stickers in Europe.
Users can then enter these digital cards into fantasy football contests to win prizes. These rewards come in the form of the cryptocurrency Ethereum, other Sorare cards or real-world prizes like VIP tickets to football matches or signed shirts.
Sorare was founded in 2019 by two French entrepreneurs and now has over a million registered users. It made over $100m from card sales in 2021 and raised $680m in Series B venture capital funding, a record for a European company.
In January 2022 Sorare also broke the record for the highest-grossing sale of a football trading card ever, with the Unique Haaland card fetching over €600,000 at auction.
An Erling Haaland NFT is now one of the most valuable digital sport items in the world 🤯
— GOAL News (@GoalNews) January 30, 2022
That smashed the previous record of $432,000 for a Topps card, interestingly also for Erling Haaland, according to data from One37pm.
So that’s a brief summary of Sorare, but you can read more about what Sorare is and how it works in our full Guide here.
The Sorare Token – Latest Update
With so much excitement around Sorare and such explosive growth in the last year, many people are asking how they can get their hands on the Sorare token – and hence own a part of the Sorare story. Typically owning tokens of exciting and hyped cryptocurrency projects is seen by some as a pointer to future growth in the price of such tokens.
However, at the moment the situation is that there is no Sorare cryptocurrency token. Anything you see claiming to be such is either a scam or not related to Sorare itself.
On the other hand, there is a way to still own a piece of the Sorare story and potentially see returns if the platform really takes off. And whilst there is no Sorare token at the moment, we believe there is a good chance there will be one in future – this is something we delve more deeply into below. You won’t want to miss out if they do release a token!
How To Get Involved in Sorare’s Journey Without Owning Sorare Tokens
Normally if people are bullish about a blockchain project, they like to invest in that project’s token or coin. So for example if someone was bullish about Ethereum becoming the base of web 3.0 and the metaverse, they might buy the cryptocurrency Ether (ETH), or if they felt it was more likely to be Solana they might buy SOL.
Others might be bullish about cryptocurrency exchanges Binance or FTX and so buy BNB or FTT respectively.
This is not to recommend any of these tokens nor to give any financial advice, but these are just examples of how lots of people involved in cryptocurrency like to buy the tokens of projects they are bullish on or enjoy using themselves.
With Sorare there is no “Sorare Token” or coin as such that you can buy at the moment if you are similarly bullish on the project. However, you can gain exposure to the project in another way – and that is through buying the cards themselves. We will explain just why this is the case.
What has happened over the course of the last two years is that as more and more users have joined Sorare, the price of the cards has gone up correspondingly.
Let’s have a look at some examples of this.
One of the first users on the platform was a chap called Mark whose manager name is YNWA – as you might have guessed he is a big Liverpool fan. He bought some of the first Sorare cards ever released, for very low amounts relative to their current prices.
For example he purchased a Declan Rice Super Rare card for €70 back in August 2019. That card is now changing hands for over €18,000 at the time of writing.
So that’s obviously a massive uplift in price in a relatively short space of time.
Or a Lorenzo Insigne Super Rare card that he bought for €139 in January 2020, which is now changing hands for over €14,000.
These huge price increases are due to the scarcity of the cards – as more users join the platform, so more people are going after the same number of cards which have fixed and limited scarcities.
When the manager YNWA joined Sorare there were just a few dozen people on the platform in the early days, where as now there are over 80,000 paying users and a million registered users. This disparity between supply and demand causes the price of cards to increase.
Although these examples from the manager YNWA are quite extreme, we have also seen significant price rises in the year we have been on the platform.
We have been documenting our own journey here and have witnessed some of our cards double, treble or even 10x since we bought them, as the number of users on Sorare has gone from around 5,000 when we joined in February 2021 to over 89,000 at the time of writing.
Whether card prices will continue to grow remains to be seen, but the point is that by purchasing cards over the last year we have owned a part of the Sorare journey and experienced some of the gain from the growth in the platform, much in the same way you might have done if owning a token in a successful cryptocurrency project.
And the beauty of the Sorare cards is that you can earn a yield on them by entering them in the fantasy football contests – called “SO5” on Sorare because you need five players to enter.
Gaining A Broad Exposure to Sorare
If you are going to take this “exposure” approach to Sorare then it is probably a good idea to spread your risk across different card types and regions. For example we hold cards in a range of different scarcities – from the “Super Rare” category of which only 10 are minted each season – down to the “Limited” category of which up to 1,000 are minted each season.
We also own cards from a variety of different leagues across the globe, from the popular teams of Europe like Real Madrid, PSG and Juventus to players in the MLS, Argentinian League and even in Asia.
So our exposure to the platform is quite wide and varied. We have also invested in a team of “Legends” cards, which are great players of the past like Cruyff, Beckenbauer and Ronaldo Nazario.
If the platform continues to grow, then potentially the value of our collection will grow as well. At the moment, as we say there are around 89,000 paying users on the platform but Sorare have plans to grow the platform to over a million paying users.
What would happen to the price of cards if they are able to achieve that aim? And don’t forget they have raised over $700m to help them get there.
Again this is not to make any predictions or give out financial advice – the blockchain is inherently risky and Sorare could fail. The cards could be worth a lot less than they are now or even become worthless.
The point is though that by owning Sorare cards you can gain exposure to Sorare’s fortunes, much in the same way as you can by purchasing a normal crypto coin, even though there isn’t a “Sorare Token” as such…yet.
Why Sorare Might Launch a Token in Future
We emphasised the word “yet” above because we do believe there are reasons why Sorare may still end up launching their own token in future.
This is because Sorare has a reward structure that is founded on three types of rewards as we mentioned before: cards, Ethereum and VIP prizes like match tickets. The latter two of these costs Sorare money and expose it to financial risk should the number of users slow down or stop altogether.
The potential damage of such a structure was seen with the collapse of another platform called Football Index, a UK regulated entity that traded “virtual shares” in footballers. Although the platforms are very different in many ways, they share a similar reward structure that pays out users cash prizes not from a pool of entries for a gameweek but on a fixed basis.
There is an inherent risk that this structure can become unsustainable and in the case of Football Index, tragically it did. Huge liabilities were built up when times were good and the platform was adding lots of new users but those liabilities simply could not be met when new users started drying up.
There was no new money coming in to payout the fixed prizes – or “dividends” as they were called on the platform. They had to drastically cut payouts but that only led to a run on the platform and its swift collapse. It became in essence a Ponzi scheme – and it is arguable it was set up to become one from the start.
It may never come to pass with Sorare of course and they may keep adding enough users, or develop other revenue streams, that allow them to keep paying fixed rewards indefinitely without it becoming unsustainable for them.
However, what happened to Football Index is a salutary warning about building up large liabilities when times are good and Sorare may wish to head off this risk by adjusting the prize structure before it becomes an issue.
A Proposed Prize Structure Incorporating a Sorare Token
In our view they could maintain key pillars of their rewards system that pose low financial risk to them:
- The cards, which cost them virtually nothing to mint but which people can sell on if they win.
- The Ethereum rewards for finishing on the podium (top 3) in the fantasy tournaments, which are a tiny percentage of Sorare’s overall takings and rewards.
- The VIP rewards like match tickets, which again are a very small cost but add some additional “sheen” and excitement for users.
The part that is a bigger financial risk currently is the Ethereum rewards for achieving a threshold of certain points in one of the fantasy contests on Sorare.
As thousands of users enter this division just to hit the threshold and achieve the payout, the liabilities can be quite large for Sorare, often running into hundreds of thousands of dollars in fiat terms each gameweek. And some users who have bought cards at value prices can achieve payouts in the long-term way above what they have paid for the cards, thus producing a negative ROI for Sorare. That is not great for their business model.
Whilst Sorare has stated it plans to replace the Eth thresholds with a “Progress Bar” that will award gameplay over a longer period, the risk would remain the same. They potentially have to pay out large numbers of people indefinitely.
A solution to this would be to replace the rewards for either these thresholds or the new Progress Bar with a Sorare token. This would cost Sorare very little – just the initial setup costs of establishing a cryptocurrency and ensuring it is implemented smoothly. Paying out the token costs them nothing as they would create it and own it.
Many play-to-earn games operate on such a model and it greatly reduces the financial risk for the game developer. Interestingly, another play-to-earn game in the sports NFT space, Zed Run, has recently done exactly this – replacing paying out cash rewards with its own “Zed Token.”
The ZED Token is coming.
Tag a friend 👇 pic.twitter.com/PWOHH8v3aB
— ZED RUN (@zed_run) January 29, 2022
The downsides of this for users is that such tokens can fluctuate wildly in value – thus giving different values to rewards from week to week or even day to day. However, that is not really any different to the situation currently, with the cryptocurrency Ethereum fluctuating wildly in value for current users of Sorare.
The more challenging aspect of introducing a Sorare token would be to ensure it has some utility within the platform. If it doesn’t, then as has been seen with some other play-to-earn games, the value could go towards zero.
Some suggestions for giving the Sorare token utility include given players a boost to their XP if staking the token with your training lineups, using it to buy Sorare merch, or being able to buy other NFTs like stadiums and badges for your club with it. If Sorare had a mechanism for swapping the token to Ethereum within the platform that would indirectly add utility to it as people could in effect use it to buy cards.
There are probably lots of additional use-cases for a Sorare token, but making these function effectively and having sensible token economics are key for Sorare.
There are lots of examples out there though of P2E games for Sorare to draw on and with the budget at their disposal they could recruit the best talent of game economists to structure it effectively.
Overall we do see the functioning of the “Progress Bar” or whatever new game mode they come up with as crucial to Sorare’s future because it is becoming harder and harder to win cards as more users enter the game.
This is just going to continue as there are only a fixed number of cards they can give out as rewards but user numbers are likely to keep on going up. In the end if only 1% of users are able to win prizes then the game becomes a lot less attractive.
At the same time, they can’t just be giving away huge amounts in prizes to a point where it becomes unsustainable. So we see the introduction of a Sorare token as an elegant solution to these competing dynamics. Users could still win decent rewards and enjoy the “play-to-earn” element of Sorare, without it becoming a millstone around the company’s neck. It would be a win-win for everyone.
Yes there would be fluctuations in the price of the token and no doubt some teething problems when it was introduced, but these would be prices well worth paying in our opinion.
Conclusion – Not Just a Token Effort
Currently there is no “Sorare Token” as such – although if you want exposure to the fortunes of Sorare, buying some cards is a close proxy to owning a token in a typical cryptocurrency project. If you have a team of five in a relevant division you can also earn rewards from those cards by entering them in fantasy contests.
Whilst there is no token at the moment we do believe it would make sense for Sorare to introduce one in future. This would remove a great deal of risk in terms of rewards potentially becoming unsustainable and allow lots more managers to win prizes and thereby enjoy and progress in the game.
We should stress that Sorare have not announced any such plans – indeed they have not even hinted that a token is coming. However, we believe the case for it is strong and would not be surprised if in the next year or two we see a Sorare Token joining the lists of coins on Coinmarketcap.