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PSG pay Messi with cryptocurrency: “Was surprised

Paris Saint-Germain this week presented Lionel Messi, 34, as the club’s latest acquisition. Messi has signed a contract until the summer of 2023, but with an option to extend it for another year. At the same time, he is said to receive a huge salary.

According to transfer journalist Fabrizio Romano, Messi will earn around 35 million euros (357 million kronor) per season, while the French newspaper Le Parisien has other information that Messi will receive 41 million euros net, just over 417 million kronor net per year. In addition, various types of bonuses are also added. Messi is also said to have received a sign-on bonus of 40 million euros, just over 407 million kronor.

Now the news agency reports Reuters that PSG has made a slightly different approach to Messi’s “welcome package” (25-30 million euros, about 254-305 million according to the news agency). PSG have confirmed that part of the “welcome package” is in the club’s cryptocurrency “$PSG Fan TokensPSG has not confirmed the proportion of the package in “tokens”, but it should be a large number of “tokens”.

– Fully embracing Socios.com (crypto platform) and $ PSG Fan Tokens has proven to be a huge success for the club. We have been able to interact with a new global audience and create a significant digital revenue stream, says Marc Armstrong, head of partnership at PSG, in a comment on the club’s website.

Reuters describes “fan tokens” as a type of cryptocurrency, which allows holders (often supporters in this case) to vote on various minor decisions related to their clubs. It can be votes about which song to play after a goal or which images to use in social media. In PSG’s case, supporters have, among other things, been given the opportunity to write motivational messages to the players, which have been posted on a wall in the locker room before important matches.

Some other clubs that have also launched and use “fan tokens” are Barcelona, ​​Manchester City and Milan. “Fan tokens” can, just like bitcoin, be traded on stock exchanges, which means that the value can fluctuate significantly.

In connection with Messi’s transfer to PSG, there has been a high trading volume on the club’s “fan tokens”. According to PSG, the trading volume exceeded 1.2 billion dollars, just over 10.4 billion kronor in the days before the move. The price for the club’s “fan tokens” is currently around 40 dollars, just over 347 kronor.

Totte Löfström, who is CEO of the crypto exchange Trijo, has a good grasp of cryptocurrency and “fan tokens” and was surprised when he heard that Messi has received compensation with that arrangement.

– There is a company (Socios.com) that has more or less specialized in making this type of collaboration with football teams and probably other sports as well. They make it very easy for teams to release their own “fan token”, which is used for small and fun stuff. It’s actually the primary use, so I was surprised that Messi and his team agreed to get paid for it. I wonder how their reasoning went, says Löfström to Fotbollskanalen and develops:

– From what I understand, it is a fairly large part of the total compensation (in the “welcome package”) that is paid out with this. Such “tokens” are traded on crypto exchanges and there is speculation. They go up in value sometimes and down in value sometimes. What I think is that PSG has sold it in that it will go up in value when he plays for them and that more people will then want to buy.

Löfström believes, however, that Messi may not earn much on the set-up.

Trading in this type of “tokens” is quite limited. Thus, it can be very difficult to realize if he would ever want to do it. If you then think that he puts it all out at once, wants to sell off and take home the profit, then the risk is great that he pushes the price down more or less at the bottom and kills the value of that “token”, as it is so a little trade, he says and continues:

– People in the financial industry are also aware that this can happen with shares. You might not even expect him and the team behind him to keep a close eye on that. The only conclusion I can draw is that it’s mostly a fun thing to encourage fans to buy.

Then it is not very likely that he will make a big profit on this?

– No, it is the same problem, as with, for example, small shares on the Stockholm Stock Exchange. They have problems, as there are not enough buyers and sellers. Therefore, there are quite small trading volumes that take place in these. If there is a large player who wants to buy or sell, you buy up the entire order book, either up or down.

He continues:

– Large players in small asset classes have a lot of power when it comes to influencing the price. In this case, it would be relevant for him to sell at some point, and when a large player comes who wants to sell large sums of something that does not have much trade in it, the effect is that you drive down the price. Then there are ways around it to sell a little neighbor every day for several years, but then it also has the effect that there is always someone who is willing to sell at the predetermined price and then the value of the “token” will not go up over time . It will more or less be locked to the level he wants to sell at.

Löfström simply believes that Messi has agreed to the arrangement as a fun thing to give the club’s project attention. As Messi fronts “$ PSG Fan Tokens”, it could lead to more supporters choosing to buy “fan tokens” in the future.

– It becomes a bit of a plow thing. I have a hard time seeing that it is a purely financial decision, but perhaps rather a fun thing to encourage and that it gives some news and attention around it. It’s not wrong to do that either.

PSG will face Strasbourg at home in Ligue 1 on Saturday.

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