Chiliz

What is Chiliz (CHZ)?

Chiliz is a blockchain-based project that brings sports fans closer to their idols using digital assets.

Best known for its sports entertainment platform, Socios.com, Chiliz gives users a meaningful way to participate in the governance of their favorite sports brands. However, in the case of the biggest sports brands, this control tends not to extend toward the sort of thing shareholders might decide on.

Rather, via the use of fan tokens, holders can decide on issues chosen by the team or club itself. For example, holders can vote on what message is printed on a captain’s armband, what design is used for team buses, what MVP categories to set during awards presentations, and even where matches are played.

For sports clubs themselves, Chiliz enables new revenue streams and grows engagement with the fanbase. Meanwhile, fans themselves can take a more active, rewarding role in supporting their clubs.

When Was Chiliz Launched?

Chiliz was founded in 2017 and conducted a private token sale the following year that raised $66 million to fund the project. Participants in this sale included Binance, OK Blockchain Capital, and FBG Capital.

8.8 billion CHZ tokens were minted at launch and deployed to the Ethereum blockchain as ERC-20 standard tokens. 34.5% of this total supply was allocated to the token sale, with 7% going to seed investors.

Who are the Founders of Chiliz?

Chiliz was founded by Alexandre Dreyfus, a successful internet entrepreneur with over 20 years of experience in the field. He has several high-profile projects under his belt, like the interactive travel guide Webcity and the online poker platforms Winamax and Chilipoker.

Dreyfus is the CEO of Chiliz and CEO of Socios.com. Chiliz, also known as chiliZ, is a subsidiary of Malta-based Mediarex Group, a global sports and entertainment organization founded in 2006 by Dreyfus, according to Crunchbase.

How Does Chiliz Work?

By visiting socios.com, fans can purchase fan tokens for their favorite sports teams if they have signed up with Chiliz. These purchases are made using the CHZ token on Socios.com.

These fan tokens are fungible, meaning that they are interchangeable at a 1:1 ratio, unlike NFTs (non-fungible tokens), which are unique in essence. Thus, these fan tokens can easily be used for things like polls and votes, leveraging fungibility in the same way a traditional unit of equity would.

Just like equity, these fan tokens are scarce and provide access to an encrypted ledger of voting and membership rights ownership. They can be traded against CHZ on chiliz.net, their in-house trading platform, but some popular fan tokens are also available on centralized exchange (CEX) platforms.

Fan tokens that aren’t listed on CEX platforms may yet be traded on decentralized exchange (DEX) platforms like PancakeSwap.

A holder of a fan token can vote on a mobile platform, and fans with more tokens have a more powerful vote. This can provide additional benefits, such as higher reward tiers and VIP status, which could translate to exclusive rewards like signed jerseys and unique experiences like photo ops and meeting players.

Different teams can offer different incentives. Holders of Paris Saint Germain fan tokens (PSG), for example, can currently vote for what goes on their captain’s armband and the goal of the season, among other things. Meanwhile, AC Milan (ACM) holders can sound off on a dressing room message and vote in a fan art contest.

What Makes Chiliz Unique?

Chiliz is unique in being the first cryptocurrency project to meaningfully bridge blockchain to the world of sports, giving legions of fans the world over a new way to get involved with their teams.

Sports are an obsession for many, and Chiliz has pioneered a way for average sports fans to participate in the inner workings of sports clubs. All of this is done via smart contracts, and clubs themselves can determine the extent of influence that fans can have.

Unlike many ambitious projects that fail to deliver, Chiliz has already developed partnerships and launched fan tokens for some of the biggest sports teams in the world.

Chiliz has developed partnerships and launched fan tokens for the UFC, the Davis Cup, various gaming organizations, and racing teams. Still, the main focus of Chiliz has been football. The first fan token to launch was that of the “Old Lady” of Italian football, 36-time champions Juventus.

Chiliz already boasts partnerships with and fan tokens for some of the biggest football teams on the planet. The most expensive football fan token currently is that of PSG, priced at 42 CHZ, while English champions Manchester City (CITY) and Spanish giants Barcelona (BAR) are trading at around 30 CHZ.

Chiliz also boasts fan tokens for the likes of Italian giants Napoli, Inter Milan, and Roma, while England is represented by Arsenal, Everton, and Steven Gerrard’s Aston Villa. On top of that, some of the other continental heavyweights include Atletico Madrid, Galatasaray, FC Porto, AS Monaco, and Valencia.

All of these fan tokens are sold initially via a Fan Token Offering (FTO), where a number of fan tokens are made available at a fixed price before they reach the marketplace.

How is the Chiliz Network Secured?

The Chiliz Chain, often referred to as the Socios sidechain, is secured by a proof-of-authority (PoA) consensus algorithm.

The PoA relies on a relatively small number of approved validators for the security and integrity of the network, as opposed to the computing power of proof-of-work or the incentivization and disincentivization model of proof-of-stake.

While this makes PoA less decentralized than most other consensus mechanisms, it does allow a network to operate at higher speeds and provide more scalability. The blockchain code has also been subjected to a third-party audit by Certik.

The CHZ cryptocurrency, meanwhile, is an ERC-20 token on the Ethereum blockchain. It also exists as a BEP2 token on the Binance Smart Chain and as a TRC-20 token on the TRON chain.

What is the Use of CHZ?

CHZ is a utility token for the Chiliz and Socios.com ecosystems, but its main use is for the purchase and trading of fan tokens. Fan tokens, representing voting power linked to various teams partnered with Socios.com, can be bought on chiliz.net and some exchanges using the CHZ token.

CHZ can be staked on exchanges that offer the service, and users choose a fan token to stake against. This staking then rewards a small amount of that particular fan token.

Who Controls Chiliz?

Chiliz is controlled by the eponymous company, based in Malta and owned by Mediarex Group.

Chiliz is a member of the Enterprise Ethereum Alliance (EEA) and comprises 30+ employees, among them creatives, developers, and gaming industry veterans versed in regulated gaming and technology. Currently, Chiliz has a digital asset treasury valued at $500 million.

Socios.com, meanwhile, is 76% owned by Chiliz founder Alexandre Dreyfus via his holding company, Zokay Investments Ltd. Other shareholders include DAZN Group Executive Vice Chairman and co-founder John Gleasure, French telecom mogul Xavier Niel, and the Beijing-based venture capital firm Ceyuan Ventures.

Socios has 200+ employees with corporate offices in Madrid, Switzerland, and Malta, other offices in Istanbul, Miami, Lyon, and London, as well as in Brazil and South Korea.

How Much CHZ Is In Circulation?

The maximum supply of CHZ is set at 8,888,888,888, a number that is very likely a product of Alexandre Dreyfus’ years in online gambling.

The number 8 is considered lucky in China since Cantonese and many regional dialects pronounce the word for “eight” similarly to words meaning “prosper,” “wealth,” and “fortune.” And, the more eights, the better!

Over 6 billion, or two-thirds of the CHZ supply, are currently in circulation. Out of the total supply, 34.5% was allocated to the 2018 token sale, 7% to seed investors, 5% to the team, and 3% to the advisory board.

20% of the CHZ was earmarked for the userbase reserve, 15% for marketing, and a further 15% for strategic acquisitions.

How Do You Buy CHZ?

Thanks to the engagement with the mainstream given to it by the Socios.com platform, Chiliz is a highly popular token among sports fans looking to get even more involved with their favorite teams.

For this reason, the CHZ token can be purchased across a variety of major exchanges. Binance is one of the best places to buy CHZ, and the Binance Launchpad has hosted several early fan token offerings.

You can buy CHZ using a variety of currencies, such as stablecoins like USDT and BUSD, cryptocurrencies including BTC, and even fiat currency on some exchanges.

CHZ can also be bought on decentralized exchanges built on the Ethereum, BSC, and TRON blockchains.

Is It Possible to Buy CHZ Instantly?

Transaction speed when purchasing CHZ using a decentralized exchange on a blockchain depends on the blockchain itself and may incur gas fees.

When transacted on Layer 1 Ethereum, buying CHZ may take a few minutes depending on network congestion. Although BSC and TRON tend to be quicker than Ethereum, Ethereum has a variety of Layer 2 solutions that can make transactions cheap and practically instant.

Buying CHZ on a centralized exchange (CEX) may seem faster, but the actual settlement of your CHZ won’t happen until you withdraw it to a private wallet.

This may be a slow process because CEXs may not initiate withdrawal transactions immediately, often having to complete KYC (Know Your Customer) and AML (Anti Money Laundering) procedures first.

How Do You Store CHZ?

CHZ can be stored in any Ethereum-, BSC-, or TRON-compatible wallet, although you should make sure that the wallet you use matches the chain you’re moving your CHZ on.

In general, wallets come in two forms:

• Cold wallets. Cold wallets keep private keys offline and out of the reach of potential attackers. They could be electronic devices not connected to the internet, paper, or some other physical copy of the private key.
• Hot wallets. Unlike cold wallets, these need to be online in order to be used. They could be desktop clients or online wallets that store credentials with the online wallet provider rather than the user’s hardware.

Chiliz Energy Consumption

As an ERC-20, BEP2, and TRC-20 token, CHZ is dependent on and supported by the Ethereum, Binance Smart Chain, and TRON blockchains. As such, the consensus is also provided by these chains, meaning that CHZ doesn’t really have much of an energy footprint on its own.

However, the Chiliz Chain continues to iterate towards version 2.0, with its “Scoville” testnet currently in play. Chiliz Chain 2.0, or CC2, will be a layer 1 blockchain and therefore may signify a rise in energy consumption.

However, CC2 will adopt a proof-of-staked-authority consensus model that retains its current roots of high performance via approved validators. This model requires far fewer active nodes than proof-of-work, which is the only sort of consensus that can reasonably be targeted with energy consumption concerns.

Is CHZ a Good Investment?

CHZ shot to prominence in the blockchain world thanks to the Socios.com platform, which brought a legion of sports fans into the world of crypto via its innovative fan tokens.

On the one hand, this utility for CHZ is still experiencing the very tip of its iceberg since there are many sports teams yet to sign on with the platform. With just a handful of teams from the major football leagues represented, there is plenty of potential for the rest to be on-boarded as well.

Furthermore, the world of sports is immense. While Chiliz has begun to form partnerships with racing, gaming, ice hockey, American football, and other sports teams, vast potential remains.

The move toward Chiliz Chain 2.0 will also see more value come to the ecosystem in other ways and will expand the utility of the CHZ token. As per an official blog post, CC2 will enable the minting of NFTs and fan tokens, build DeFi products and Play2Earn games, and move broadly into the world of Web3.

If Chiliz can pull off this transition into CC2 and its exciting future without too many major hiccups, it’s difficult to bet against the future performance of the CHZ token.