In preparation for the upcoming Formula One season, Ferrari has ended its collaboration with Velas blockchain. The Ferrari team refused to comply with the conditions that must be met for Velas to manufacture NFTs for its business, according to reports. A loss of approximately $55 million has resulted from Ferrari's suspension of its blockchain partnership.
In 2021, Ferrari and Velas entered into a partnership worth $30 million per year in order to increase fan engagement through the use of nonfungible tokens (NFTs) and other joint initiatives.
Ferrari's racing division, Scuderia Ferrari, has joined the growing number of Formula One teams that have ended their relationships with cryptocurrency sponsors. Italian team Velas Blockchain and chip manufacturer Snapdragon have ended their multi-year partnership, resulting in a cumulative loss of $55 million.
From 2021, Ferrari-Velas' partnership was intended to increase fan engagement through nonfungible tokens (NFTs). RacingNews365 reported that Velas failed to comply with clauses that permitted NFT images.
After FTX filed for Chapter 11 bankruptcy in November, Mercedes lost $15 million in partnership with the crypto exchange. A similar fate befell Tezos Foundation's partnership with Red Bull Racing, as it decided not to renew its agreement.
Toto Wolff, Mercedes-AMG Petronas F1 Team principal, has warned that other teams may experience similar problems. The relationship between F1 and the crypto ecosystem goes far beyond partnerships. In October, Formula One filed ‘F1’ trademarks for an online marketplace for cryptocurrency, meta tokens, digital collectibles, crypto-collectibles, and NFTs.
In the midst of a bear market, Web3 projects have taken the initiative to strengthen engagement between fans and sports leagues.
Based on Deloitte's "2022 Sports Industry Outlook" report, the blending of the digital and physical worlds will accelerate, as well as the market for near-field technologies and immersive technologies will expand.