The Ferrari-Velas agreement, which was slated to start in 2021 and cost $30 million annually, aimed to boost fan involvement through nonfungible tokens (NFTs) and other joint projects.
The racing unit of premium automaker Ferrari, Scuderia Ferrari, has joined the growing number of Formula One teams who have ended their relationships with its cryptocurrency sponsors. Prior to the 2023 season, Ferrari ended their multi-year collaboration agreements with Velas Blockchain and the world's largest chip manufacturer, Snapdragon, incurring a combined $55 million loss for the Italian team.
The Ferrari-Velas agreement, which was slated to start in 2021 and cost $30 million annually, aimed to boost fan involvement through nonfungible tokens (NFTs) and other joint projects. RacingNews365 claims that the team violated the provisions allowing Velas to produce NFT photos.
On November 2022, Mercedes, too, bore a loss of $15 million after suspending its partnership with FTX as the crypto exchange filed for Chapter 11 bankruptcy. Red Bull Racing’s partnership with Tezos Foundation suffered a similar fate as the blockchain company reportedly decided not to renew its agreement citing strategy misalignment.
Toto Wolff, the team principal and CEO of the Mercedes-AMG Petronas F1 Team, warned that other teams could come across a similar situation. However, the relationship between F1 and the crypto ecosystem spans beyond partnerships. On October 2022, Formula One filed 'F1' trademarks as it revealed plans to set up an online marketplace for cryptocurrency, meta tokens, digital collectibles, crypto-collectibles and NFTs.