The Chiliz (CHZ) project brings together fans and Web3
Digital assets such as tokens are unique in that they can fulfill any function:
- a means of payment,
- shares,
- a means of transferring value,
- loyalty points.
The creators of Chiliz have developed a token that unites sports fans worldwide.
What is Chiliz, and what functions does the token perform?
Chiliz, or CHZ, is a cryptocurrency aimed at sports fans. Initially, Chiliz did not have its blockchain and functioned as an ERC-20 token based on the decentralized Ethereum platform. In addition to Ethereum, the CHZ token is available on BNB Smart Chain, Solana, and the native Chiliz Chain.
The maximum possible number of tokens is 8 888 888 888 CHZ tokens, and almost all of them are already circulating on the market. This means that the number of Chiliz tokens can only decrease over time.
The CHZ cryptocurrency is a utility token whose primary function is to improve communication between teams and members of sports fan clubs. Chiliz also belongs to the so-called fan token category. The CHZ token also acts as the official cryptocurrency of Socios.com, a first-of-its-kind mobile application for soccer fans.
Notable clubs that have already joined the platform include:
- FC Barcelona,
- Barça,
- Atlético de Madrid,
- Golden State Warriors,
- Paris Saint Germain,
- Juventus,
- AS Roma.
For example, the Aston Martin Cognizant Formula1 team even held a public sale of its fan tokens (FTO). Fan token offerings are analogous to ICOs only held specifically for fan tokens.
Fan clubs can issue fan tokens, which fans can buy with CHZ tokens on the Socios.com platform. Fan tokens give their owners voting rights in proposals put forward by club executives.
Fan club owners, in turn, can use CHZ tokens to reward their members, for example, by rewarding them for high ratings, as well as granting privileges to those fans who cast their votes: for instance, unique rewards, exclusive merch, access to club events, game tickets or early access to purchase them, and more. In this way, CHZ token holders can influence decisions regarding their favorite teams, such as choosing team apparel designs and starting lineups or stadium names.
Chiliz, the company that launched its namesake cryptocurrency, was founded in 2012 in Malta. The main goal of the creators was to provide millions of sports fans worldwide with a token that could unite fans and become a significant asset for them.
How do fan tokens work at Chiliz?
Fan tokens operate on the Chiliz Chain sidechain, a BNB Smart Chain network fork powered by Proof-of-Authority (PoA) consensus. The PoA algorithm differs from Proof-of-Work and Proof-of-Stake in that approved verifiers (humans) rather than miners or validators act as nodes. Proof-of-Authority is more centralized than other consensus algorithms but makes it easier to scale and increase the performance of blockchain networks.
The Chiliz Chain mainnet was launched in October 2023 after a successful testnet (Scoville testnet). Users can transfer CHZ tokens from the Ethereum, BNB Chain, and Solana networks to the native network via the official Chiliz Bridge.
The presence of the native network Chiliz Chain allows the expansion of the areas of application of CHZ cryptocurrency: now their owners have access to staking, and the tokens themselves are used to pay for network commissions.
Fan club teams decide what to do with the tokens: they can burn them or withdraw them from circulation depending on the events' results, making fan tokens more rare and valuable.
CHZ token rate and dynamics
By capitalization, the CHZ token is among the 70 largest cryptocurrencies in the CoinMarketCap list, which indicates the high popularity of the Chiliz platform among users, the number of which, according to the official website, exceeds 2 million. Data for January 2024 show that the capitalization of the CHZ token is about $909 million, and with a trading volume exceeding $175 million, the asset ranks 44th among all cryptocurrencies.
From the beginning of 2023 until October, the token showed mainly negative dynamics: during this time, the capitalization of CHZ decreased from $913 to $407 million — by more than 55%. CHZ exchange rate for the same period decreased by more than 60% — from $0.13 to $0.05.
However, since October 2023, the rate and capitalization dynamics have become positive amid the local cryptocurrency bull market. The CHZ price has almost doubled, while capitalization has increased by 223% and almost reached a one-year high. However, the exchange rate is still a quarter lower than a year ago and 89% down from its all-time high of $0.89 in March 2021. The CHZ token is available on Binance, Coinbase, Kraken, OKX, KuCoin, HTX, and many other crypto exchanges.
Is Chiliz promising?
In addition to having its blockchain, dozens of factors can provide demand for a digital asset. Take Pepe or Bonk memcoins as an example; they were able to outperform many large blockchain projects with advanced technologies in terms of capitalization, even for a short period. CHZ tokens are used to pay commissions and buy fan tokens, keeping the asset demand high.
The Chiliz platform partners with Chainlink, the most prominent decentralized blockchain oracle network. Not counting the pricing data that Chainlink's smart contracts provide, the partnership with Chiliz aims to create NFT collections for special sporting events. If the data published on the company's website is believed, Chiliz has more than 150 international partners in the sports sector.
In addition, the Chiliz project can boast impressive investments: its team has raised $65 million in various funding rounds with the participation of well-known funds and the same amount through the public sale of tokens. The project's investors were:
- Binance Labs,
- Jump Crypto,
- FBG Capital,
- Ceyuan Ventures.
