Swing…and a miss.
The Washington Nationals, following an effort on Twitter to promote its ties to crypto project Terra, received blowback from users for apparently not realizing Terra’s crypto coin is currently crashing—a cautionary tale for any brand interested in the Web3 space.
The MLB franchise tweeted on Tuesday a video that was “presented by Terra,” which delivers basic kernels of crypto education against a backdrop of team highlights, such as “Cryptocurrency is: native to the Internet” and “Cryptocurrency is not: paper money.”
But the team’s tweet coincided with Terra’s UST coin plunging more than 30% on Monday night to hit an all-time low. Investors have continued to sell their holdings, and while the coin has since regained some of its loss, many believe the project will soon collapse entirely.
Unfortunately for the Nationals, which partnered with Terra for a sponsorship earlier this year, the timing of its tweet has redirected some of the negativity onto itself.
“Hey you guys should check the news,” reads the top comment on the post. Daniel Roberts, editor-in-chief of crypto news outlet Decrypt, quote-tweeted the post with the statement, “gotta think this was pre-scheduled content, yeesh.”
Whether or not the tweet did result from haphazard scheduling is not clear. A spokesperson for the Washington franchise declined a request for comment.
The greater crypto market is in the midst of a downswing, with Bitcoin and Ether, the two leading cryptocurrencies, down 17% and 16% in the past week, respectively. Brands dipping their toes into Web3 should heed the Nationals’ flub as a reminder that the crypto space is highly volatile, and education and awareness of its vagaries are a must.
Moreover, brands need to ensure that they are choosing Web3 partners with reliable business models and leaders. Terra’s UST coin is an “algorithmic stablecoin,” meaning that underlying smart contracts try to keep it pegged to a fixed—or stable—price. Algorithmic stablecoins are considered precarious products with low success rates—perhaps not the best partner for a brand just entering the space. Do Kwon, the founder of Terraform Labs, which developed Terra, is also a controversial character in the crypto space.
Announced in February, the National’s partnership with Terra gives the crypto project—which is governed by a DAO—naming rights to an exclusive area of its stadium behind home plate. The franchise also said it may start accepting Terra’s UST coin as a payment method at Nationals Park this season.
Crypto has recently established ties with professional sports leagues, including Major League Baseball. Last month, exchange FTX debuted a campaign starring Los Angeles Angels standout Shohei Ohtani.