Ferrari cuts ties with crypto sponsor ahead of 2023 Formula 1 season

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Scuderia Ferrari, the racing division of luxury carmaker Ferrari, has joined the growing list of Formula 1 racing teams to end partnerships with their cryptocurrency sponsors. Ferrari has terminated its multi-year partnership deals with Velas Blockchain and chip-making giant Snapdragon, resulting in a cumulative loss of $55 million for the Italian team ahead of the 2023 season.

The 2021 Ferrari-Velas partnership, set at $30 million per year, aimed to increase fan engagement through non-fungible tokens (NFTs) and other shared initiatives. However, the team did not comply with the clauses that allowed Velas to create NFT images, according to RacingNews365.

In November, Mercedes also suffered a $15 million loss after suspending its partnership with FTX as the crypto exchange filed for Chapter 11 bankruptcy. Red Bull Racings’ partnership with the Tezos Foundation suffered the same fate, as the blockchain platform reportedly decided not to renew its deal, citing strategic misalignment.

Toto Wolff, Team Principal and CEO of the Mercedes-AMG Petronas F1 Team, has warned that other teams may encounter a similar situation. However, the relationship between F1 and the crypto ecosystem extends beyond partnerships. In October, Formula 1 filed for F1 trademarks revealing its intention to create an online marketplace for cryptocurrency, meta tokens, digital collectibles, crypto collectables and NFTs.

Related: Argentine soccer league signs metaverse partnership after World Cup triumph

Amid a bear market, Web3 projects have taken the lead in building engagement between fans and sports leagues.

The Deloitte 2022 Sports Industry Outlook report predicts an accelerating blending of the real and digital worlds, as well as growing markets for NFTs and immersive technologies. As Cointelegraph reported, the lack of easy-to-use platforms is the biggest challenge for mainstream adoption.

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