The Evolution of Esports Monetisation: Why Web3 and Crypto Betting are the Future of Fan Engagement

Esports is no longer just about ‘computer games for schoolchildren’. By 2025, the audience had surpassed 640 million people. Revenue stood at nearly $5 billion. Yet the industry’s economy remains fragile. Teams rely on sponsorship money, fans play virtually no part in monetisation, and prize payouts take weeks to process.

Cryptocurrencies and Web3 have begun to offer an alternative: instant transactions, fan tokens and transparent betting. In 2021, crypto money flooded the market – FTX, Crypto.com and Coinbase – were signing contracts worth hundreds of millions. Then the FTX collapse happened, and the industry ground to a halt. But from 2025, crypto sponsorship is making a comeback – without toxic schemes, but with new conditions: regulatory requirements, educational formats instead of direct token advertising, and strict oversight by publishers.

From energy companies to Bitcoin: how crypto entered esports

Until 2020, the esports sponsorship landscape was predictable: electronics manufacturers, energy companies, and clothing brands. Intel invested over $110 million, whilst Red Bull and Monster were present at every major tournament. Non-esports-specific brands – car manufacturers, financial services and luxury brands – accounted for around 28 per cent of sponsorship revenue.

In 2021, crypto companies flooded into the market. At the height of the bull market, FTX signed a $210 million contract with TSM – the largest deal in esports history at the time. Crypto.com signed a $15 million deal with Fnatic, whilst Coinbase became a sponsor of several teams and tournament series at once.

The collapse of FTX in November 2022 sent this market into a tailspin. TSM terminated its contract, whilst Riot Games lost a $96 million deal with the LCS and faced a lawsuit from investors. In 2023, only one new crypto deal was signed in esports. The industry had cooled towards digital assets.

The return of crypto: new rules of the game

In 2025, crypto sponsorship began to recover under fundamentally different terms. Coinbase became Riot Games’ exclusive blockchain partner for League of Legends and VALORANT. The structure of the deal is deliberately conservative: no in-game crypto wallets, no NFTs and no tokens. Coinbase sponsors educational segments during broadcasts – the ‘Econ Report’ for VALORANT and ‘Gold Grind’ for LoL. This is, in essence, the anti-FTX: a regulated exchange that promotes not a token, but the brand and literacy in cryptocurrencies.

The 2026 Esports World Cup, with a record prize fund of $75 million, has for the first time allowed crypto companies to become sponsors – but with strict conditions: a mandatory licence from the French regulator AMF, and a ban on NFTs and tokenised loyalty programmes. The industry is focusing on transparency and regulation rather than hype.

In global sport, crypto sponsorship reached $565 million in the 2024/25 season, showing a 20 per cent year-on-year increase. Esports accounted for a smaller share of the budget – football took 59 per cent of new deals. But the trend itself is clear: crypto companies are returning to sport and esports, but with measurable risks and legally sound contracts. And this trend is set to continue into 2026.

Key deals: a timeline of crypto sponsorship:

Why crypto assets are a natural fit for the esports audience

The average age of an esports fan in the US is 26. This generation has grown up in digital ecosystems: in-game trading in World of Warcraft, the Counter-Strike skin economy, and CS2 marketplaces, whose market capitalisation reached $14 billion at its peak. Gamers are tech-savvy: they are accustomed to instant transactions, digital ownership and the absence of banking intermediaries.

Ramp Network notes: “Gamers are digital natives. A large proportion of them already know how to navigate the digital space, at least compared to the general population.” It is precisely this audience that is driving the demand for privacy and speed. Crypto betting platforms offer KYC-free betting with over 40 cryptocurrencies – for a generation accustomed to trading game skins without identity verification, this is a natural model.

However, it is important not to confuse ‘digital literacy’ with ‘commitment to decentralisation’. According to DappRadar, blockchain games attracted around 700,000 unique active wallets per day in the second quarter of 2023. This is a negligible figure compared to the 640 million esports viewers. Gamers are willing to use tools that work better than their traditional counterparts – but they do not blindly embrace the Web3 ideology.

Formats for crypto partnerships in esports

Crypto integration in esports is progressing along several fronts. Bookmakers are entering into sponsorship deals with teams and leagues – in December 2024, Riot Games authorised teams in the LEC, LTA, VCT Americas and VCT EMEA to collaborate with bookmakers. John Needham, President of Publishing and esports at Riot Games, said that betting already exists around Riot Games disciplines and will continue to exist regardless of whether the operator interacts with them or not. He also said that according to Sportradar, the turnover of betting on League of Legends and Valorant in 2024 exceeded $ 10.7 billion.

Crypto exchanges are returning to long-term contracts. According to SportQuake, the number of new crypto deals in esports in 2025 rose to 7, compared with 1 in 2023. The market is recovering, although it remains 85 per cent below its 2022 peak.

Fan tokens have emerged as a distinct sector. In September 2025, the Chiliz Group acquired a 51 per cent controlling stake in OG Esports – marking the first time the Socios platform had gained direct control over a major esports organisation. At its peak, the OG fan token reached a market capitalisation of over $100 million. In March 2026, the SEC and CFTC classified fan tokens as ‘digital collectibles and instruments’ rather than securities, thereby removing the main regulatory barrier in the US. Examples of other formats:

• NFTs as a revenue stream for teams (FaZe Clan, Team Liquid, 100 Thieves).
• Smart contracts for prize payouts (Community Gaming: $2.5 million distributed, payouts within 3 seconds).
• Bookmakers setting up their own teams (Stake, Pari).
• DAO governance and decentralised leagues (Yooldo with the EST token).

Smart contracts and decentralised leagues

The Community Gaming platform has implemented smart contracts for prize payouts – in three seconds via the blockchain, with a fee of $0.0012 – and has already distributed over $2.5 million. This clearly illustrates the difference between traditional payouts (weeks of waiting and bank charges) and blockchain solutions.

In the long term, we can expect to see fully decentralised esports leagues and tournaments managed by DAOs, where players and fans have a direct say in the rules, prize distribution and even game development. The Yooldo platform, with its EST token, is already implementing DAO governance, and its roadmap envisages decentralised esports leagues.

Esports got a taste of crypto back in 2021. At that time, there were huge sums of money, high-profile contracts and an almost complete lack of oversight. The collapse of FTX brought the industry back down to earth, but did not dampen interest. The approach has now changed: transactions have become more transparent, regulators have become involved, and Riot Games has authorised betting partnerships, albeit under strict supervision. Fan tokens have been granted legal status, smart contracts distribute prize money in seconds, and Coinbase and Chiliz are demonstrating that crypto integration can be secure and sustainable. The future of esports monetisation lies not in hype, but in effective tools that address the real pain points of fans, teams and organisers. Regulation, transparency and speed – these are the factors that will shape the next five years.