Launched in 2019, Chiliz (CHZ) is a blockchain fintech solution designed for sports and entertainment. At the time of this writing, CHZ trades at $0.406 per token with a circulating supply of 5.586 billion, for a total market cap of $2.26 billion.
What Is Chiliz?
Sports brands around the world are constantly seeking new ways to engage with fans through digital mediums. In recent years, European football clubs such as Paris-Saint Germain and Schalke 04 have expanded their online presence by establishing e-sports teams and embracing new methods to interact with fans.
Chiliz is an ERC-20 utility token that was created to help both traditional and e-sports teams unleash the untapped potential of tokenization. Chiliz was created to help teams drive engagement, create new fan incentives, and deliver unique opportunities for clubs and fans to work together.
You can now trade CHZ on Phemex!
What Is Socios?
The Chiliz blockchain is the foundation for the Socios sports fan engagement platform, which was inspired by the fan-led management frameworks present in major clubs. Fans can support their favorite teams through Socios by purchasing club-branded “fan tokens.”
These special assets can only be purchased with the CHZ native currency, and are guaranteed by smart contract technology. Like with CHZ, fan tokens are fungible, meaning they can be traded on both the Socios platform and on select exchanges at market-driven prices. Naturally, the token also serves as a ticket to a community of passionate, like-minded fans.
By voting in official polls held on the platform, token holders can participate in a variety of club decisions (such as customizing kit design or choosing a celebration song). Fans that hold more tokens have more voting power, which in turn increases their clout, and lets them access more exclusive VIP tiers.
Source: Socios Platform Website
The Socios fan leaderboard system provides another powerful incentive for engagement. Clubs can use the platform to offer their most active fans exclusive experiences, from personal meetups to jerseys signed by players on the team.
Socios has partnered with a number of high-profile football (soccer) teams, including European legends such as Juventus and FC Barcelona. The platform is expanding regularly as new clubs launch their branded tokens through Fan Token Offerings (FTOs). Much like an initial coin offering (ICO), an FTO is a period in which a certain number of fan tokens are offered at a fixed price. This helps ensure fans can participate and interact with their favorite clubs at an entry-level price.
Source: Socios Platform Website
Though most of the platform’s partnerships are currently with football clubs, Socios is also expanding into e-sports and professional fighting. Notably, the platform has entered into partnerships with the PFL and UFC, which will give fans the opportunity to influence the season both in and outside the ring.
In addition to club fan tokens, the platform includes its own Socios United (SSU) fan token. It operates as a type of governance token, meaning that each SSU gives holders the right to influence app changes, updates, and other features. SSUs can be purchased like normal fan tokens, or earned through achievements and engaging with Socios partners.
Socios users can also participate in Token Hunt, an augmented reality geolocation game resembling Pokemon Go. Players hunt through the real world for procedurally generated “treasure chests” that contain SSUs and CHZ. During special partner events, club-branded fan tokens are also made available.
Who Is Behind Chiliz?
Chiliz was founded by CEO Alexandre Dreyfus, a French entrepreneur with a long history in the gambling industry. Chiliz is advised by a team of experts across the finance, tech, and gaming industries. Notable figures include Mickey Kim, a Director at Google; Gil Rotem, former COO of Bet365; and Guillaume Patry, Starcraft World Champion.
CHZ Price History
The price of Chiliz grew gradually before experiencing a massive surge around the start of March. The token rose from $0.02 on January 24 to $0.42 on April 24, a rise of approximately 2000% over 3 months. However, the token’s price has significantly corrected over the past month, decreasing by around 50% from its all-time high of $0.85 in March.
Much of the massive growth experienced by Chiliz can be attributed to the enormous hype surrounding non-fungible tokens (NFTs). Chiliz had a head start on most of its competitors because the token already had a strong network of partnerships before the craze began. Despite offering no NFT platform beyond its own fan token products, Chiliz ranks as the second-largest NFT token by volume.
Chiliz is currently ranked #52 by market cap. According to the Chiliz team, the token has a maximum supply of 8.888 billion CHZ. Of the total supply, 34.5% was distributed through a pre-sale event and other token sales, while 20% was set aside as a reserve for new users. Smaller shares were set aside for strategic acquisitions, seed investors, advisors, and employee incentives. Chiliz was entirely funded through a private placement in 2018, through which it raised over $66 million. According to the team, there will never be an ICO.
What is the future for Chiliz?
While many blockchain projects position themselves as platforms for decentralized applications or decentralized finance solutions, Chiliz operates more like a traditional business. In essence, fan tokens operate as a form of tradable asset, like trading cards, sold by Socios and its corporate partners.
Notably, this is a highly centralized model, meaning that absolute control of the project ultimately belongs to private Chiliz shareholders. The advantage is that the Chiliz project has a very well-defined use case that can be largely directed by business ventures. A corporate structure may also give CHZ holders more confidence given it has a public insider trading policy.
While none of the Chiliz project’s core leadership has much blockchain experience, their corporate expertise has helped land the token key partnerships with huge brands. The project shows no signs of slowing down, and the team has stated they are seeking to expand to “hundreds of partners” over the coming year. The project’s early success in the football and fighting spaces may serve as a good sign for its future prospects in other major sports as well.
A key driver of expansion for Chiliz is the Socios Locker Room, through which the platform has weaponized fans to convince their teams to create a fan token. Users spend CHZ to buy locker room tokens at a base price. Lockers stay open for 120 days, after which they are either converted into fan tokens in case of a successful partnership or refunded to the user’s wallet. Up till now, the Locker Room program has led to successful partnerships with Manchester City and AC Milan.
Chiliz has achieved something that still eludes most blockchain projects — a clear application with active users and high-profile partnerships. The project has grown rapidly so far in 2021, with a steady string of new partnerships and expansion into new sectors. Launched on April 1, the FTO for the PFL token sold out in just 10 minutes.
Potential holders should note the relative centralization of the Chiliz project, and that it positions itself as more of a “product” than most of its competitors. Chiliz has a dominant position in what is still a fairly small niche. As some NFT tokens begin to move towards sports partnerships, CHZ already has a huge head start.
The success of CHZ will hinge on the Socios platform, which should be considered an integral part of the token’s value proposition. While the CHZ price has largely leveled out over the past month, new opportunities are opening up as certain fan tokens begin to list on major exchanges.