What is Sportiqo?
Sportiqo is the stock market for sports – a platform on which fans can invest in the performance of players and get rewarded for their knowledge and passion for the game. By blending the adrenaline rush of a sport & the thrill of trading, Sportiqo has created a platform that gamifies the world of finance in new & exciting ways.
How does it work?
Each player’s performance in a tournament for a season is represented by a digital asset called Player Stock which is bought and sold on the Sportiqo platform.
Player Stocks have real intrinsic value as Sportiqo offers a guaranteed payout to stock buyers that is dependent entirely on the on-field performance of the player and measured through a transparent, objective formula. This is similar to shareholders of companies earning dividends based on the company’s performance.
The price of a player is the market’s best guess of what the on-field statistics of the player would be at the end of a tournament for which the stock is valid. As these expectations rise or fall over the course of the tournament, so does the stock price. On-field performance, news, injuries, playing position, change in team management – anything could impact expectations and accordingly the stock price.
The net result is that you have a market in which player performances can be traded just like trading stocks. You can buy and hold and earn the guaranteed payout. Or, as stock prices rise and fall you can buy the dips, sell the highs, and book profits.
That is what makes Sportiqo a stock market for sports.
The challenge with building a stock market for sports
The concept of ‘investing’ in an athlete’s future performance is not new. This is the whole idea behind trading cards which have been around for decades. Fans buy the cards of rookies in the hope that the athletes would go on to have a great careers and the value of their trading cards would soar.
More recently, NFTs of the images of sportspersons or videos of sporting moments have been popular as a way of taking a long-term position on an athlete’s performance.
There have also been a few startups that have attempted to create a stock-market-like platform for trading the performance of athletes without much success.
The big problem with all of the above is that the market creators all rely on the ‘greater fool theory’ to establish a price for the asset. An investor would buy a trading card or an NFT in the hope that there would be someone down the line who would be willing to buy it from him at an even greater price and the investor would be able to book a profit on his investment.
On its own, however, a trading card or a sports NFT has no tangible value. If there are no buyers for these assets, there is no value.
This is different from a real-world stock market where fractional ownership of businesses is traded. The profit-generating potential of the underlying business acts as a guide for the real or intrinsic value of the business even though prices can become unhinged from that intrinsic value at times of market exuberance or distress.
A synthetic sports-based asset has no such intrinsic value. The market for these assets seems to be working well when there is ample liquidity but inevitably, when the market turns, the buyers disappear, resulting in prices plummeting to zero. We have seen this play out with the few companies that have attempted to create sports stock markets and more famously with the entire sports NFT market in 2022.
The Sportiqo solution
As we went about building a stock market for investing and trading in player performances, our primary thesis was that such a market would only work if the assets being traded had intrinsic value.
To ensure that the player stocks on Sportiqo have an intrinsic value, we assign a monetary value to a player’s stats in a tournament. For example, in the case of cricket, which is the first sport available on Sportiqo, every run, boundary, dot ball or wicket is assigned points as per a transparent, objective formula.. At the end of the tournament when the stock ceases to trade, the total points scored by a player are converted into rupees and paid out to stockholders.
The price of a stock is then simply the market’s expectation of the total points that the player will score in a tournament and, by extension, an expectation of the player’s performance in that tournament. This price can be volatile as player performance varies from one game to the next but in the end, it has to converge to the guaranteed payout.
Another major issue with sports stock markets is the potential for market manipulation by platform creators. Since the creators of the assets are also the ones who are setting the prices in the secondary market, there’s ample opportunity for the platform to manipulate the market to benefit itself.
To avoid this, we have built Sportiqo on top of the Polygon blockchain. We are big proponents of blockchain technology when it comes to ensuring transparency. All stock transactions are recorded on the blockchain so that any user can verify them and highlight any irregularities to the wider community. This will help Sportiqo become a trusted platform on which users can participate without fear of the market being rigged.
The road ahead
We are very excited to launch Sportiqo in India with T20 cricket as the sport on which player stocks will be offered. Cricket occupies a special place in the cultural landscape of India with hundreds of millions emotionally attached to the fortunes of the national cricket team and, more recently, of IPL franchises. Top cricket players command fan followings that rival those of Bollywood superstars. Given the founding team’s background in India and their passion for the game, cricket was the logical choice for the choice of sport at launch.
Our beta version has already covered the T20 leagues of UAE and Pakistan and will soon be followed by the biggest T20 league in the world in India. We plan to introduce ODI cricket and soccer by the middle of this year covering the major European leagues later in 2023.