- Velas was taken off the list of partners on the website of the Italian team.
- This seems to have terminated its relationship with partner Ferrari Formula One.
- The removal of Velas from Scuderia Ferrari’s roster of partners is another setback for cryptocurrency, which is struggling to gain traction in Formula 1.
The blockchain technology startup Velas and the Ferrari Formula One team appear to have terminated their relationship after Velas was taken off the list of partners on the website of the Italian team.
The removal of Velas from Scuderia Ferrari’s roster of partners is another setback for cryptocurrency, which is struggling to gain traction in Formula 1.
The Italian team revealed their collaboration with Velas near the conclusion of 2021 when F1 teams appeared eager to negotiate partnerships with cryptocurrency firms. The environment has altered substantially over the past year, with the value of cryptocurrencies and blockchains declining significantly.
The most striking illustration of the instability and unpredictability of cryptocurrency sponsors in Formula 1 is the bankruptcy of FTX, Mercedes’ official cryptocurrency partner, at the end of 2022.
It seems uncontroversial to state that things are looking dismal, even without having a cutting-edge understanding of the crypto and NFT worlds. The bulk of the F1 grid had some cryptocurrency sponsorship or dealt with last year. This is still the case, but the trend is going in one direction. The most recent development in F1’s cryptocurrency partnership is between Ferrari and Velas, their cryptocurrency partner.
Velas was a blockchain network that was “actively working toward being certified as a Climate Neutral blockchain,” according to the Ferrari website. This pertains to one of the many variables that have led to the hatred of cryptocurrencies in Formula 1 (among others). In this way, Velas was trying to set itself apart from the competition.
An Early End to the Agreement Between Velas and Ferrari?
Despite this apparent concern for the environment, what was originally a “multi-year agreement” between Velas and Ferrari seems to have come to an early end. The value of Velas on the market has significantly decreased, according to Coinmarketcap, which may be the cause of this partnership’s dissolution.
Ferrari revealed Velas’ Premium Partner status in December 2021. Therefore, there had to have been a sizable decline for this agreement to expire. If last year is any indication, the number of NFTs and cryptocurrency companies in F1 is expected to decline in the upcoming seasons.
Ahead Of The 2023 Season, The Ferrari F1 Team Appears To Drop Velas.
Despite agreements coming to an end, cryptocurrency sponsorship of Formula One still seems to be going strong, with Red Bull still partnering with Bybit in a US$50 million contract and Crypto.com supporting the Miami Grand Prix with a nine-year naming rights agreement.
According to the company’s chief marketing officer, Haider Rafique, “naturally [the crypto struggles] hurts the category reputation,” but because blockchain technology is trying to solidify its position in Formula One, the cooperation between McLaren Racing and OKX also appears to be strong.
However, Ferrari started to have problems when it became clear that the value of Velas’ VLX token had fallen precipitously in less than a year. The token’s weight has fluctuated around US$0.018 to begin 2023, from its signing day value of US$0.38 with Ferrari.
Closing Thoughts
According to numerous rumors, the team’s agreement with Qualcomm was dissolved after just one year, and the software company’s Snapdragon product is no longer included among Ferrari’s partners.
Before the upcoming season, Ferrari had significant administrative changes as well. Mattia Binotto was replaced as team principal for 2023 by Frederic Vasseur.
