The Italian luxury sports car maker Ferrari has terminated its multi-year collaboration arrangements with Velas Blockchain and chip manufacturing giant Snapdragon. This decision has resulted in a loss of a total of $55 million for the Italian team in advance of the 2023 season.
At the tail end of 2021, Scuderia Ferrari, the racing subsidiary of Ferrari, made the announcement that it would be partnering with Velas. This came at a time when other Formula One teams were seemingly enthusiastic about reaching partnerships with crypto firms.
In the last year, there has been an enormous shift in the environment, with cryptocurrencies and blockchains seeing a considerable decline in value at an alarmingly rapid pace.
Through the use of non-fungible tokens (NFTs) and other collaborative projects, the relationship between Ferrari and Velas, which was to begin in 2021 and be worth $30 million annually, sought to boost the level of fan interaction.
Despite this, the team did not comply with the restrictions that would have permitted Velas to develop pictures for the NFT. According to the information provided on the website of Ferrari, Velas was a blockchain network that was in the process of being actively pursued for certification as a Climate Neutral blockchain.
Not just Ferrari, several other Formula One teams to exit a crypto partnership
The most glaring illustration of the instability and precarious financial position of cryptocurrency sponsors in Formula One is the demise of FTX, the official cryptocurrency partner of Mercedes, which happened in November 2022.
It would seem that no team wants to be identified with the dwindling influence that cryptocurrency has on the public. Therefore, the long-term contract that was announced at the end of 2021 has only been in effect for one season.
In addition to Velas, the mobile device chip maker Snapdragon has also been left behind in this industry. Although it has not been established for definite, the possibility that the agreement was broken due to the unpredictability of the crypto market should not be discounted as an explanation.
Even if one is not up to date on the latest happenings in the crypto and NFT worlds, it should not come as much of a surprise to hear that things are not looking good.