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'Like memberships to an exclusive club'

FanCraze CEO Anshum Bhambri explains how digital collectibles are changing the way we look at memorabilia

Anshum Bhambri is the CEO and co-founder of FanCraze, a cricket digital collectibles platform that has secured exclusive deals with the ICC, Asian Cricket Council and several other boards, IPL teams and players such as Virat Kohli and Rohit Sharma. He talks to ESPNcricinfo about introducing the cricket fan base to collectibles, their value and the future of the space.
Let's start with a question we are sure you get asked all the time: What is a digital collectible?
I do get asked that all the time. A digital collectible is no different than a physical collectible. A collectible is anything that has limited supply and where proof of ownership and originality can be established. We've had physical collectibles like art, stamps, coins, memorabilia, whether it's from history or from sport, like the signed bat or stump from a World Cup final. The problem with digital assets before blockchains were invented was that digital assets could be copied infinitely. You could take an original photo of Virat Kohli or Lionel Messi, and it would be copy pasted a million times. What blockchains did via the non-fungible token was create verifiable ownership and scarcity.
Wait, so what is a blockchain
A blockchain is effectively a ledger where there is a set of independent validators who need to have consensus in order to edit the ledger. This ledger is not controlled by a person or an institution and can only be changed with the consent of the validators. So, it's a trust-less system which allows you to create digital assets (i.e. entries on the ledger) in such a way that the assets have verifiable scarcity and provable ownership. For the first time, you can take a video clip and say it is going to only have 50 copies because a network of 5,000 independent computers verifies it. That's how digital collectibles were created.
Are there any differences between a digital collectible and a physical one?
With a digital collectible, it's much easier to amplify your ownership of it. Collectibles give you bragging rights. Now, if you buy an M.F. Husain original painting, you put it in your living room to show off to people who come to your home. But how many people come to your home? With a digital collectible, I can put it on my Facebook or Instagram and all my followers can see it. So, the bragging rights I have are amplified from a few people to thousands.
So when I post that I own a digital collectible on my social media, how do I prove I own it? Meta, who run Facebook and Instagram, can actually verify from a blockchain whether you own a digital collectible. So someone may just post a photo of MS Dhoni, but if you post a digital collectible you own, yours will show the equivalent of a blue tick.
Do you see digital collectibles replacing physical ones or growing the market?
I think they will grow the market. Physical collectibles will still remain, but I actually think digital collectibles can be sold with physical ones to augment them. For example, today if you buy a bag from a high-end designer label and you post a photo of it on Instagram, how do you prove it's an original. What I prophesise will happen is those designer labels will sell their physical product along with a digital collectible so people can prove on social media that they own an original product. The digital world is definitely more scalable, so I definitely think digital collectibles will grow the market.
I also think digital collectibles will change the way we look at collectibles. Right now, we see them as rare, scarce assets that the rich want to have because of the limited supply. I believe that collectibles are going transform into things that have utility. They are going to become identification mechanisms. Think of a token gated community. Today, anyone can join a Rohit Sharma Facebook fan group. But what if tomorrow there is a community you can only join if you own a Rohit collectible? It may not be an expensive collectible. It may be a 10-rupee collectible, but it can give you access to closed communities verified by ownership. It's like an expensive gymkhana membership in some ways but at a much smaller price.
Could you expand on the real-world utilities you see digital collectibles having…
Let me first start by talking about collectibles we have on the FanCraze platform. We have player cards, which are 2D assets. They are static images of a player combined with stylized elements, such as an autograph of the player. We also have clips of some of the best moments from cricket history converted into NFTs so they become digital moments you can own.
Now, in terms of their value, we have a mental model at FanCraze that a digital collectible has value that can be broken down into three parts: there's collectible value, financial value and utility value. Collectible value is the rarity of the collectible and what it means to you. I was a kid when I saw Shane Warne bowl Herschelle Gibbs in the 1999 World Cup semi-final, so that moment means something to me. So that's the collectible value, which is easy to understand.
Then there's financial value, which is interesting because it almost treats digital moments as financial assets. Every cricket fan has a certain list of players whom they are bullish on, players they think will be the next Virat Kohli or Steve Smith. Till today, we've never had the opportunity to invest in them. Now, on FanCraze we have collectibles of Dewald Brevis, Maheesh Theekshana, Kyle Mayers, and people are buying their player cards or digital moments because they think these players are the superstars of the future. Today, their NFTs are available at USD 5 or 10 because they are not that well known. It's a bit like venture capital for cricket fans, where you take a long-term view on assets. The third part is utility. We have games on the platform. Games may be actual gameplay based games where the attributes of your player depends on the collectibles you owned. Then you have games based on strategy where you can basically own teams based on which player cards and moments you own.
You can also get real-world value from using these collectibles. You may be able to get on a Zoom call with a player whose NFTs you own, or go with them to a nets session or get to interview them. You can get access to signed merchandise and bats.
You touched on how these collectibles become financial assets. There is currently a collectible on FanCraze trading for as high as USD 50,000. Does that figure surprise you?
It's not very surprising because the fandom for cricket is huge. The collectible you're talking about is one of Sachin Tendulkar from the 1992 World Cup. There are only six copies of it currently. So the reason it's trading at that value is because of the scarcity, and there are six people who are crazy enough about Tendulkar to want to own that moment.
But if you look at other collectibles, they are as low as USD 5. There are many between USD 1,000 and 2,000. Our approach so far has been to manage supply very tightly. We understand that growth and revenue are great, but we also understand that this is a domain where supply should never exceed demand. We should never be short-term focused. To give you some numbers, other sports NFT platforms have minted 60 or 70 NFTs for every active user. Our number is eight, so we are at 10%. We've kept our supply really tight.
Another important statistic: we launched in February this year, in the depths of the bear market. Whereas the rest of the sports collectible markets are down 80-90%, FanCraze is up 40% if you take the average of the prices of all the collectibles we have. That's a result of us being fan-focused, engagement focused and being tight with our supply. So, these big numbers don't surprise us. And we actually don't like the top sales being really high. What we want is to have millions of people own collectibles between USD 5 and 100 as opposed to that one million-dollar sale.
Let's talk about something FanCraze is doing currently: The Crictos of the Game packs being pre-sold for every match of the ongoing ICC Men's T20 World Cup. What was the idea behind allowing fans to pre-buy packs?
We believe pre-buying a pack before a game gives you this really cool experience where you see now and buy now. Within three hours of a game ending, you have the moment in your wallet.
Relevance is something very important in sport. Fans are excited about things that happen in the current and the now. It's also a way to engage with Gen Z because they have short attention spans. The other thing it does is really illustrate the difference between owning a moment and watching a video of it online. You get access to this moment and the video of it immediately.
When you buy any pack on FanCraze, you don't know exactly which moments you are going to get. Is the mystery and element of luck part of the excitement?
Yes. It's the same as the excitement of unpacking a mystery box. The way a pack drop works is FanCraze announces a drop a few days before it's going to happen and tells the users how many collectibles they are going to get and which categories. We also release the entire pool of moments that you could get in your pack. The users then come at a predesignated time and join a waiting room for 45 minutes. There's a 15-minute wait in which we jumble the users randomly and each is given a number in the queue. Then, the first set of users are invited to come and buy their packs. There's usually 4x or 5x the number of users who actually want a pack. So there's always scarcity. Then, the most exciting part: what we call ripping. Users can rip their packs open and the moments appear one by one.
This also encourages secondary trading. If you are an Australian fan and you don't want an Indian moment, you just want a Steve Smith moment, you can go to the marketplace and check if anyone has got a Steve Smith moment and put it up for sale.
Tell us a bit about your own journey and how you came to be interested in digital collectibles
Let me start at the beginning. I'm a Bombay boy and grew up as a cricket fan. I studied computer science and then went to Stanford, California, where I studied financial mathematics. I followed that up with a career on Wall Street where I began trading complex financial products and then moved on to being a tech investment banker, advising Apple, Google and several other large tech companies. While I was in the US, my wife and I also got our MBAs at the University of Chicago. While there, a friend and I decided to build a video game. We had always been big gamers. We built a third-person shooter and managed to get hundreds of thousands of paid downloads and make a profit on that game. That experience of engaging people from the ages of 17 to 70 and actually getting them to pay for a digital product was something that stuck with me.
I heard about Bitcoin from some economics PHDs at the University of Chicago, so that's how I became fascinated with blockchains. Counterintuitively, I was not interested in the finance use cases but wanted to build something mainstream. Since I had built a game and engaged users from 17 to 70, I felt that one way to get people interested in this space was to build something related to sports or gaming. I met Roham Gharegozlou, who had built a produced called NBA Top Shot, which converted licensed NBA moments into collectibles. And Roham suggested I do the same in cricket. In my mind I said, who's going to give me a license? Luckily I got connected to Sundar Raman (former IPL COO) through my sister, who went to college with him. We ended up chatting and realized we had the same vision for creating something unique and innovative in cricket.
So what was that vision for FanCraze
The Web 3 movement is all about letting people buy products directly from creators without a middleman. So, there's no one to trust, and the revenue can go directly from fans to creators. It started with art, got into music and has now been introduced in sport. We felt cricket is the perfect sport for this. Because unlike other sports, cricket is B2B. The way cricketers and teams and leagues earn their money is from broadcast rights, sponsorships, advertisers. There's a large part of consumer spending in cricket but it doesn't reach the players. With collectibles, we can sell assets directly to fans and give a percentage of the revenue to the stakeholders
Sundar said this amazing thing that has stuck with all of us at FanCraze: Cricketers create moments of magic, but they aren't owned by them. They are owned by an ICC or a BCCI or an IPL. We have the ability to monetize that and to give the players something back.
How does FanCraze approach the market differently to other digital collectibles companies? Are there any challenges specific to cricket?
The biggest challenge is the fact that cricket fans have not been collectors. If you look at American sports, basketball fans buy Air Jordans; in baseball, baseball cards are really popular. In football, people buy a lot of merchandise, jerseys, season tickets etc. In cricket, even original IPL jerseys don't sell that much even though the fan base is huge.
The way we've approached it is to double click on the utility value. Collectible value is something we have to build over five or ten years. But utility value is something people understand. So we had a strategy game called FanCraze Flash that was up within two months of the platform launch. So, it was like, hey you need to buy these collectibles, but they have direct utility in this strategy game where you can gain rewards and prizes. We are also focused on giving collectors real-world utility in the form of access to players. Last but not least we are focused on this being a Web 3 experience but in a way that's Web 2 friendly. You can buy these collectibles with your debit or credit card. We don't accept Crypto currencies.
Let's talk cricket now. What has your own journey of fandom been like, and what are your early memories of the game?
Living outside India for 15 years, watching cricket on Youtube and following it on ESPNcricinfo has been a huge source of joy for me. There's a lot of solitude in living abroad, so that's when you engage the most with sports.
The first cricket moment I remember is this amazing Ajay Jadeja diving catch from the 1992 World Cup. I was still 8-9 years old when I saw it. In the same World Cup, Wasim Akram bowled this yorker that hit Brian Lara on the toe forcing him to leave the field retired hurt. Those are the two first moments I remember.
Then there was a Hero Cup where Sachin defended six off the last over. We were on a train, and my dad figured out a way to start the radio. He had to throw the antenna out the window for us to get signal.
These may not be marquee moments, but they mean a lot to me. Another of my favourite moments is when Yuvraj Singh caught Michael Hussey in the semi-finals of the 2007 T20 World Cup. It sealed India's win, and I just remember Yuvraj's celebration and the commentator saying "Yuvraj is pumped".
Which games are you looking forward to at this World Cup?
Australia vs England is definitely one. But sometimes in World Cups, it's the games you don't expect to be interesting that are the most fun. We've already seen several upsets already. So the joy of World Cups is that you never know which games will turn out to be exciting.
FanCraze are ESPNcricinfo's digital collectibles partners