Today we will continue to talk in order of market value. What we are talking about today is CHZ, a blockchain product in the sports circle. Its current market value is around US$600 million, ranking around 70th.
Chiliz is a blockchain product and service for mainstream consumers, aiming to enhance the fan participation experience in the sports entertainment industry and provide alternative payment solutions for traditional products. Chiliz provides blockchain-based solution tools for the sports and entertainment industry to help monetize fan participation. Chiliz is the fintech platform powering Socios.com, allowing sports and esports fans to co-manage the clubs, competitions, leagues and events they support.
Chiliz Chain is a fork of BSC (a go-Ethereum fork). Therefore, most tooling mechanisms, concepts and binaries, including this document, originate from BSC and Ethereum.
Starting from the baseline of EVM compatibility, Chiliz Chain introduces an 11-validator system with Proof-of-Stake (PoSA) consensus that supports shorter block times and lower fees.
Chiliz helps entertainment and sports companies stay in the spotlight by using blockchain-powered tools that allow them to monetize viewership.
Subscription is an access link for fans to obtain voting rights and purchase tickets in advance. In addition, fans can directly access their desired football teams through Chiliz blockchain technology and tokens.
Before Chiliz appeared, fans could only learn about and get close to their favorite football clubs by watching football games and obtaining merchandise. With Chiliz, these sports fans can connect to the teams they want in real time. In addition, , fans are significantly influencing the decision-making process of the clubs they support.
Chiliz operates Socios.com and works with many of the biggest names in sports to distribute digital content to fans on the platform.
In 2021, Socios' partner clubs generated over $200 million in revenue.
Famous football player Lionel Messi is the official representative of the platform.
Who created Chiliz and Socios.com?
Founded in 2018 by entrepreneur and crypto enthusiast Alexandre Dreyfus, Chiliz is a subsidiary of Mediarex Group, a Maltese company operating in the sports and entertainment industry.
In 2018, Chiliz raised $66 million through closed investments. Major investors include Binance Labs, CeYuan Ventures, Jump Capital and Kosmos Capital.
At the end of December 2019, the Chiliz development team launched the sports enthusiast platform Socios.com using Chiliz Chain’s own blockchain. The main asset of the platform is the cryptocurrency Chiliz (CHZ).
In early 2020, a centralized cryptocurrency exchange began operating Chiliz.net, billed as “the world’s first sports and entertainment exchange.”
Currently, Chili’s team has more than 220 people. The company has offices in Spain, Switzerland and Malta, as well as representation in Turkey, the United States, France, the United Kingdom, South Korea and Brazil.
Chiliz Chain How does blockchain work?
In October 2019, Chiliz launched a side chain called Chiliz Chain to solve the problem of high handling fees in Ethereum.
The average block generation time of Chiliz Chain is 5 seconds, and transactions are free. Its main purpose is to issue and circulate fan tokens, and more than 80 of them have been issued so far.
For optimal performance, the Chiliz blockchain uses the Proof of Authority (PoA) consensus protocol. This is a variation of the proof-of-stake algorithm, except that a limited list of trusted network nodes (masternodes) participate in generating blocks and approving transactions, and no rewards are given for approving blocks.
To increase productivity, decentralization must be sacrificed: Chiliz Chain is served by only seven masternodes owned by the company and its largest partners.
As of September 2022, there were more than 1.6 million user accounts on the Chiliz network, roughly corresponding to the number of downloads of the mobile app Socios.com.
Starting from March 2022, the new version of the Chiliz Chain 2.0 blockchain will operate in testnet mode. This is an independent first-tier network where transactions are cheap and fast.
According to Chiliz, thanks to full compatibility with the EVM, the second version of the blockchain will allow developers in the Ethereum ecosystem to issue NFTs and fan tokens to the Chiliz Chain, as well as launch DeFi services, blockchain games and loyalty degree plan.
Socios is Chiliz’s first consumer product. This is a scalable application that allows fans to gain tokenized voting rights at their favorite clubs. The app allows fans to interact with their teams and offers unique rewards including access to match highlights, predicted game results and match-day challenges.
Socios is powered by the Chiliz sidechain and allows sports teams to issue fan tokens. These tokens are exclusive blockchain assets with strong ties to the issuing team. Therefore, these tokens give holders voting rights to participate in decisions, polls and polls regarding team management.
Fans can directly participate in the decision-making process of their favorite teams through Socios. For example, Arsenal Football Club fans can use Arsenal Fan Token (AFC) tokens to vote on the design of team merchandise, in-game banners, the naming of the stadium or the song for goal celebrations, while receiving rewards and unique experiences. The platform ensures that clubs fairly respect fan voting results through smart contracts.
What types of sports are available on Socios.com?
Socios partners are more than 150 organizations, teams and associations from 25 countries around the world. In addition to football, fan tokens have been issued for many sports:
Mixed martial arts: Professional Fighting League (PFL), Ultimate Fighting Championship (UFC);
赛车：Roush Fenway Racing、Aston Martin Cognizant F1、Alfa Romeo F1 Team ORLEN；
Basketball (USA): Chicago Bulls, Boston Celtics, Los Angeles Lakers, etc.
Tennis: Davis Cup;
Football (USA): Philadelphia Eagles, New York Giants, Chicago Bears, etc.;
Rugby: Sharks, Stade de France, Leicester Tigers, etc.;
Hockey (USA): New York Rangers, Detroit Red Wings, Pittsburgh Penguins, etc.;
Football (United States and Canada): Austin FC, LA Galaxy, Atlanta United FC, Toronto FC, etc.;
Cyberpsort：OG、Endpoint CeX、Vitality 等。
In summary, the six key features of Socios include:
1. Entrance to Cryptocurrencies: You can purchase CHZ using a credit card.
2. Trading section: After purchasing CHZ tokens, you can use it to purchase fan tokens of your favorite team. Additionally, you can exchange a fan token for another token or convert it back to CHZ.
3. Voting section: After obtaining fan tokens, you can influence the decisions of the relevant teams.
4. Rewards section: As a fan token holder, you can purchase club merchandise at discounted prices and enjoy other benefits.
5. Pokémon Go-like function: This is a virtual reality function for free experience of virtual scenes and obtaining CHZ tokens.
6. Locker function: Allows the team to monitor potential demand for its tokens from fans
Chiliz Ecosystem Token
In addition to powering the Socios platform, CHZ also provides three other tokens with different roles:
fan tokens
Chiliz fan tokens help users vote and provide benefits to the club. Some popular football clubs with millions of fans have issued fan tokens, including Arsenal FC’s AFC token, Atletico Madrid’s ATM token, FC Barcelona’s BAR token, Manchester City’s CITY token, Paris Saint-Germain Saint-Germain's PSG tokens and more.
Chiliz also has a Fan Token Offering (FTO) launchpad that enables clubs to easily issue and distribute fan tokens. Additionally, Fan Tokens have a burn function that increases the scarcity of the tokens for sports teams, thus increasing their value.
Locker Tokens
Sports teams need to send in an application to join Chiliz, and once the request is approved, the team creates a "locker" where investors can hold their CHZ tokens for four months and then exchange them for locker tokens .
After the team successfully launched fan tokens, Chiliz exchanged locker tokens for fan tokens (plus 10% CHZ cashback), which are mostly worth more than CHZ tokens. If the fan token launch fails, the platform will return CHZ tokens.
Chiliz ERC-1155 NFT
In February 2020, Chiliz announced a partnership with blockchain technology developer Enjin to develop branded digital collectibles for the club. Chiliz utilizes Enjin tools to mint Ethereum-based non-fungible token (NFT) collectibles for partners.
ERC-1155 is a multi-token standard for the creation of fungible and non-fungible tokens under Enjin-powered protocols. The standard aims to create a token that performs similar functions to ERC-20 and ERC-721, or even allows both to perform simultaneously. Users can purchase Chiliz collectibles on the Enjin Marketplace using ENJ or CHZ.
The maximum issuance of CHZ is 8.88 billion tokens, of which approximately 6 billion will be in circulation in the fall of 2022. The number of freely circulating CHZ grows by approximately 94 million CHZ per year, or 1.6%. According to data from Etherscan, CHZ holders have approximately 150,000 addresses. The current token price is around US$0.1, and the peak in 2021 was around US$1, so it has also dropped by more than 90%, and the team’s holding ratio is slightly higher, around 35%.
To sum up, this is currently the head project of the sports series, and its current market value ranking is low. The sports track is a huge track, and it is also a trillion-level market. However, the sports track also has too many directions. Maybe one company is the only one, and you can capture a piece of it (5% of the market). It is also a market worth hundreds of billions of dollars, so there is a lot of room, especially during some major events, such as the World Cup, the growth rate is not bad, so you can join our A watch list that includes buying less is not a big deal.