DraftKings and the UFC have agreed to develop fighter NFTs that will tie into both fantasy gaming and sports-wagering opportunities in an evolution of the companies’ blockchain-based offerings.
The new product will be part of DraftKings’ Reignmakers line, which started in football following a deal with the NFLPA. The first UFC NFTs are expected to go on sale this summer, with NFT-based games launching later this year.
In February, the UFC and Dapper Labs launched a different NFT collection, UFC Strike, which is nearing $10 million in total sales volume according to Cryptoslam! data.
“We expected our fans to embrace these products just given that they are first adopters and tech users,” UFC SVP, global consumer products Tracey Bleczinski said. “So we’re seeing that, and we’re also seeing people coming into our sport through these products.”
With cryptocurrency and NFT prices sliding this spring, however, May brought Strike’s lowest sales volume total since launching.
Financial details of the multiyear DraftKings deal have not been disclosed, but Bleczinski said athletes would receive half of the licensing revenue generated, with individual fighter shares being determined by the popularity of their specific NFTs.
“We are talking to a lot of partners in the emerging technology space,” Bleczinski said. “Something that we take a look at quite a bit is: How do we successfully position ourselves to enter the emerging technology space, but in a way that is future proof… As we are out having all these various conversations, the DraftKings proposition just ticked all the boxes across what’s important for UFC as we seek out partners.”
Based on the rarity tier of their digital items, Reignmaker NFT holders will be able to compete in special fantasy contests for a variety of prizes, including—yes—additional NFTs.
While designing the experience, DraftKings is taking inspiration from both physical memorabilia and games like Magic: The Gathering. “They have a lot of complexity built into them and a lot of levers that you can pull as an operator that can make it a really engaging experience,” said Beth Beiriger, SVP of product operations for DraftKings Marketplace.
The fighter NFTs will also unlock other benefits for holders, including odds boosts for certain sportsbook wagers.
“We’re gonna have fans who show up who are very interested in playing the game, and we want to make sure that… that experience is top class,” Beiriger said. “But we also understand that there are users who are going to come in and want to collect these NFTs because they have an affinity for that fighter, or might lean more into our sports betting product. What we’re really doing, in partnership with the UFC, is finding a way to make these gamified NFTs really speak to, and be engaging with, several different cohorts depending on how they want to engage with the DraftKings ecosystem.”
The plan is for DraftKings to mint a new set of collectibles each year, and the company will track early interest in the product to adjust supply as needed. “That is one of the things that we have discussed at length: how do you balance having a set amount of scarcity with an unknown factor of how many people are going to want to come in,” Beiriger said. “As users show up, we will make sure that there’s enough supply for them to participate but being smart about it so that we’re not also flooding the market and diluting anything.”
Beiriger added that the company has “active conversations” with other leagues as it continues building out Reignmakers. “The level of investment is definitely high,” she said. “It’s a pillar of what we’re focusing on.”