Ferrari has ended its partnership with the Velas blockchain ahead of the upcoming Formula 1 racing season. Scuderia Ferrari, the racing division of the Italian luxury sports car brand, has reportedly backed out of compliance with the regulations required before Velas could create NFTs for the company. Ferrari now faces losses of around US$55 million (about Rs.452 billion) after suspending its blockchain partnership and cutting ties with chipmaker Snapdragon, which was also one of its sponsors last year.
To connect with new-age fans and reward loyalists with digital souvenirs, Ferrari had done so Partnership with Velas in 2021. The deal, which was set to be multi-year, was priced at an annual price of US$30 million (about Rs.2.46 billion).
That wasn’t the only reason the deal failed Ferraris lack of participation, but also because of the ongoing crypto slump that’s what Velas got in the gut of his business.
According to a report from RacingNews365, Velas has claimed it faced a financial breach in this partnership.
Founded in 2019, Velas was founded by two crypto entrepreneurs, Alex Alexandrov and Farkhad Shagulyamov, and the brand is headquartered in Zug, Switzerland.
The blockchain firm is now considering official legal avenues with Ferrari to part ways amicably.
The Velas branding that appeared on the F1-75 car will be dropped soon.
As far as Ferrari’s termination of partnership with Qualcomm Snapdragon is concerned, the reason for this “mutual decision” allegedly remains unclear. The chipmaker paid Ferrari $25 million (about Rs.205 billion) to promote the company and also offered the automaker technical support.
Ferrari was among the other high-end automakers to take advantage of this Blockchain and NFTs Industry looking for ways to connect with their fans.
Mercedesfor example, also jumped on the crypto wagon after signing a sponsorship deal with FTX crypto exchange in September 2021. The partnership automatically broke up after the FTX exchange collapsed and eventually declared bankruptcy last year.
Amid the ongoing downturn in the overall crypto market, Red Bull Racing’s partnership with Tezos Foundation also collapsed in December 2022 after the latter decided not to renew its deal, citing changes in its “strategic priorities”.
Currently, it remains unclear what kind of visibility the crypto and blockchain projects will gain this year in 2023 Formula 1 race Season scheduled to start on March 5th.
Formula 1 has been trying to be at the forefront of adapting its fans and followers to crypto culture for some time. In October last year, the international car racing association announced that it wanted to open a marketplace for NFTs and other forms of blockchain-based offerings.
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