Liverpool's first steps into to the NFT market delivered £1.125m in revenue, although 95 per cent of the 'LFC Heroes Club' collection went unsold.
The Reds last week announced their intentions to enter the collectible digital artwork space that has boomed over the past 18 months, partnering with London auction house Sotheby's to deliver a three-day sale and auction of the NFTs, with a percentage of the revenues accrued going towards supporting the work of the LFC Foundation.
The club created two categories of digital collectibles - a set of 24 unique ‘Legendary’ 1 of 1 NFTs, and a series of generative ‘Hero Edition’ NFTs that combine multiple player illustrations to produce a unique digital collectible for each fan. The ’Legendary’ and ‘Hero Edition’ digital collectibles were made available to purchase during a three-day sale from Wednesday, March 30 to Friday, April 1. Within the sale window, the ‘Legendary’ 1 of 1 NFTs, which consist of 24 legendary heroes, will be made available to purchase through a live auction. That auction closed yesterday afternoon.
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During the sale, fans had the opportunity to own a unique randomly generated ‘Hero’ edition, which were revealed once the sale came to an end. These were be priced at around £56 and a cap existed on the amount of blind pack NFTs that could be purchased.
A potential 171,072 were available to purchase from the 'Hero' edition, with that figure reached through the possible permutations the generative algorithm could create, such as the different facial expressions and expression of traits of each of the player and staff NFTS. Of that 171,072, the Reds managed to sell only 5.7 per cent of the full drop, with 9,721 limited editions sold. Of the revenue raised from the sale of that particular drop, 10 per cent went to the LFC Foundation, with the Foundation receiving a further 10 per cent on resale royalties.
The 'Legendary' auction saw an auction of 24 items raise $744,750 (£567,760). The biggest sellers at the auction were Mohamed Salah's NFT at $88,200 (£67,227), Jurgen Klopp's at $81,900 (£62,425) and Trent Alexander-Arnold's at $69,300 (£52,821). Of the total raised, minus costs, the Foundation will receive 50 per cent of the total. A total of £281,375 has been raised for LFC Foundation from overall sales so far, money which will go towards its work in the community, including their education and employability programmes, inclusion and special educational needs and disability support.
Liverpool would have been expecting a higher number to be sold than the 9,721, although the club hadn't been anticipating getting close to selling the full 171,072 amount. All unsold NFTs will go unminted, meaning only the purchased NFTs will be on the blockchain. The remaining permutations have not been minted and therefore cannot and will not be burned, where an NFT is removed permanently from circulation.
While the sum raised for the Foundation will be a boon, the perceived slow start to Liverpool's entry into the NFT space comes on the back of criticism received from some supporters over the Reds' entry into a market that is largely unregulated and can be detrimental to the environment. Liverpool partnered with the Polygon blockchain for the project, a blockchain that uses considerably less energy to 'mine' NFTs than rivals due to it working on a 'proof of stake' basis rather than a 'proof of work'. The latter sees more users attempting to mine NFTs, ergo using more energy, while the former uses less and rewards regular and consistent 'validators'.
It likely won't be the last 'drop' that we see from the Reds in the NFT space, although the club will now assess the engagement and success of their first entry into the market before reviewing their position.
When asked last week on the ECHO's Bottom Line podcast if the involvement was under review, Liverpool's senior vice president of digital marketing, media and tech, Drew Crisp, said: "Always. In the same way we do for every one of our ventures or any new service, we will always monitor it and make sure we are understanding it from every angle.
"Is it appealing to the fans? Is it delivering from a commercial standpoint? Is it delivering against the values and measures around energy consumption? We will always keep this under review and assess whether it is successful based on different measures. Unless you try it you can't answer any of these questions. I don't think that uncertainty around new markets isn't a reason not to test them. If we are to be a progressive club and progress into new territories to stay at the top commercially then we have to do these things."
