News JVTech After Mercedes and Red Bull, Ferrari decides to stop crypto
Published on 09/01/2023 at 18:55
While the blockchain sector has gone through a more or less sluggish year, some major brands that have entered into partnerships with crypto companies are gradually dissociating themselves from it. This phenomenon is already being analyzed in the automotive sector, since after Mercedes and Red Bull, it is Ferrari’s turn to end the collaboration with its crypto partner.
Ferrari ends its partnership with the Velas blockchain
After Mercedes and Red bull, today it is Ferrari’s turn to end its partnership with the Velas blockchain. The luxury car brand had entered into a multi-year partnership in 2021 for around 27 million euros. This aimed to develop the digital aspect of the brand by offering non-fungible tokens (NFT) and other web 3 experiences to Ferrari fans.
According to RacingNews 365, the Italian sports car brand breached certain contract clauses, including one that allowed Velas to create Ferrari-signed NFTs.
This breach of contract is in addition to that of Snapdragon (the electronic chip company, formerly a partner of Ferrari) and will incur a significant shortfall for the car brand. In total, the automaker will lose more than 51 million euros planned in its budget, or about a quarter of Ferrari’s commercial revenue. Additionally, with Velas currently in financial difficulty, the premature breakup could lead to a legal action.
Automotive and crypto is over
The Formula 1 sector seems to be gradually abandoning partnerships with crypto companies. While almost 80% of the teams at the sporting event each had a partner from the crypto sector, today the relationship between F1 and crypto seems to have tarnished. As a reminder, from Mercedes to Red Bull via Ferrari, these teams had entered into partnerships with blockchain companies during the rise of Bitcoin and cryptocurrencies.
Today, they have almost all broken their partnership for various reasons brought about by the crypto winter.
Mercedes was for example associated with the defunct FTX platform, having gone bankrupt last November. The crypto exchange notably left a debt of 10 million in the coffers of the German team.
For Redbull, which was associated with the Tezos blockchain, it was the crypto company that took the lead in announcing the termination of its multi-year partnership in December:
“The Tezos Foundation has decided not to renew its agreement with Red Bull Racing as it no longer aligns with its current strategy,” said Mason Edwards, chief commercial officer of the Tezos Foundation.
Nevertheless, some companies continue to take a step towards technology by integrating it directly as a production or application tool. This is the case of the German brand BMW, which works closely with players in the crypto sector such as Coinweb or the BNB chain (binance’s blockchain). The technology will for example be used soon to serve the customer loyalty program at BMW in Thailand.