JVTech News After Mercedes and Red Bull, Ferrari decides to stop crypto
While the blockchain industry has had a more or less sluggish year, some big brands that have partnered with crypto firms are gradually disassociating themselves from it. This phenomenon is already being analyzed in the automotive sector, given that after Mercedes and Red Bull, it is up to Ferrari to end the collaboration with its crypto partner.
Ferrari concludes its partnership with the Velas blockchain
After Mercedes and Red Bull, today it’s Ferrari’s turn to close the 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 (NFTs) and other web 3 experiences to Ferrari fans.
According to RacingNews 365, the Italian sports car marque has breached certain contractual clauses, including one that allowed Velas to create Ferrari-signed NFTs.
This breach of contract adds to that of Snapdragon (the electronic chip company, formerly a partner of Ferrari) and will result in a significant shortfall for the car brand. In total, the automaker will lose more than the €51m budgeted for in its budget, or about a quarter of Ferrari’s commercial revenue. Additionally, with Velas currently in financial trouble, premature breakup could lead to legal action.
The automotive and cryptocurrencies are over
The Formula 1 sector seems to be gradually moving away from partnerships with crypto companies. While nearly 80% of the teams attending the sporting event each had a crypto industry partner, today the relationship between F1 and crypto seems to have blurred. As a reminder, from Mercedes to Red Bull to Ferrari, these teams had partnered with blockchain companies during the rise of Bitcoin and cryptocurrencies.
Today, almost all of them have ended their cooperation for various reasons caused by the cryptocurrency winter.
For example, Mercedes was associated with the defunct FTX platform, which went bankrupt last November. The cryptocurrency exchange has 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 cryptocurrency firm that took the lead in announcing the end 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.
However, some companies continue to take the technology a step further by integrating it directly as a production tool or application. 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 (the binance blockchain). The technology, for example, will soon be used to serve the customer loyalty program at BMW in Thailand.