CHZ cryptocurrency

Chiliz (CHZ) cryptocurrency is the official token of the Socios.com mobile app, which issues and trades fan tokens.

CHZ is among the top 50 cryptocurrencies by market capitalization. The Socios.com platform is run by the Chiliz project.

Socios.com partners with several popular sports clubs that offer fan tokens to their supporters on the platform. Moreover, famous footballer Lionel Messi remains the official ambassador of the platform.

History of Chiliz

Chiliz was founded in 2018 by successful entrepreneur Alexandre Dreyfus. Initially, it was not a standalone company but a subsidiary of the larger Maltese-based Medirex Group, which specializes in the sports and entertainment sector.

In 2018, Dreyfus secured significant funding for his project, raising $66 million. Major investors in the startup included Binance Labs, the Chinese venture firm Ceyuan Ventures, the Chicago-based trading firm Jump Capital, and Kosmos Capital.

Notably, Dreyfus stated that the project would never have open sales.

At the end of 2019, the developers launched the Socios.com app, designed exclusively for sports fans, alongside the Chiliz blockchain.

The newly created cryptocurrency CHZ became the platform's primary asset.

In early 2020, the team successfully launched Chiliz.net, the first-ever centralized cryptocurrency exchange for sports and entertainment.

Using the Chiliz blockchain, the developers issued fan tokens for popular sports clubs like Barcelona, Juventus, and Paris Saint-Germain.

Why do successful sports teams need this?

Take FC Barcelona, for example, which has over 300 million active fans worldwide. One of the club’s executives, Josep Pont, once said that having the BAR fan token was crucial because it helps attract even more supporters. Thus, fan tokens serve as a powerful marketing tool for even the most successful clubs, similar in importance to their merchandise and branding.

Fan tokens are designed to engage active fans who do not live in Barcelona and cannot attend matches. For these fans, the virtual asset BAR is a way to feel closer to their favorite club.

Chiliz also helped develop and issue fan tokens for Argentina and Portugal national football teams, UFC promotions, Formula 1 teams (including Alfa Romeo, Alpine F1 Team, and Aston Martin), and many others.

The number of prominent clubs working with Chiliz rapidly grew, and now the platform offers a wide variety of fan tokens from various sports teams.

Currently, Chiliz collaborates with over 120 sports teams, and more than a million people own fan tokens.

Today, the project team has over 220 employees, with offices in Switzerland, Spain, and Malta, and representatives in the US, Turkey, France, South Korea, Brazil, and the UK.

Features of Chiliz Chain blockchain

The fan tokens available on Socios.com give users a unique chance to connect with their favorite sports teams, which previously seemed out of reach.

Token holders can not only follow their favorite athletes but also vote on important decisions, receive unique rewards from the club, participate in autograph sessions, meet popular players, and help create exclusive merchandise and other club items. They can even reserve seats at games.

The benefits for those using the Socios.com platform and the Chiliz exchange are clear.

Chiliz has revolutionized sports monetization, transforming passive fans into active participants, benefiting both the fans and the sports clubs. With Chiliz, fans do not just watch the game but actively engage in their team’s life. In return, clubs can promote themselves more successfully and earn significant dividends.

The native CHZ token operates on the Ethereum blockchain, while fan tokens are created on the Chiliz blockchain, which acts as a sidechain to Ethereum. Voting on the platform occurs through a series of smart contracts, which also exist on the Chiliz network.

Chiliz Chain launched in October 2018 with the mission of supporting the Socios.com mobile app.

On average, block creation on the Chiliz Chain takes just 5 seconds, and there are no transaction fees.

The main goal of the network is to issue and distribute fan tokens. To maintain optimal performance, the project uses a Proof-of-Authority (PoA) consensus protocol.

PoA is a variant of Proof-of-Stake, where a limited number of trusted network nodes (called masternodes) participate in block creation and transaction validation.

Unlike Proof-of-Work, PoA does not rely on nodes to solve complex mathematical problems. Instead, authorized nodes form new blocks, ensuring the security of the ecosystem.

For any changes in the blockchain, the majority of authorities must sign the chain, making the updated state part of a permanent record. This motivates nodes to act in the network’s interest, as bad behavior risks damaging their reputation and losing privileges.

To maintain high performance, Chiliz sacrificed decentralization. Chiliz Chain is supported by only seven masternodes, owned by the company and its key business partners.

By September 2022, the Chiliz network had over 1.6 million customer accounts, with a similar number of downloads for the Socios.com app.

In March 2022, the new Chiliz Chain 2.0 launched in a test phase.

This layer-1 network enabled fast and relatively low-cost transactions.

Thanks to full compatibility with Ethereum Virtual Machine (EVM), this new version allows Ethereum developers to create new NFTs, fan tokens, DeFi services, and various online games.

The Chiliz ecosystem model includes:

• The Socios.com mobile app, designed to attract more fans and reward them for their actions
• The CHZ token, used as the internal payment method
• Fan tokens on the network.

Fan tokens have also attracted cryptocurrency investors, as they often speculate on major sports news, like World Cup events or new player contracts.

This led to the creation of Chiliz.net, the first sports-focused crypto exchange, where anyone can buy and sell official virtual assets issued by Chiliz partners.

What is Socios?

The Socios.com app is a blockchain project that pioneered the issuance of virtual assets specifically for sports fans.

Socios.com operates using the CHZ token. Any fan token issued on the Chiliz platform is linked to a specific sports team or club and represents a digital asset. This asset grants access to a secure and unchangeable record of voting and membership rights.

Fan tokens are fungible assets, inspired by previous fan-run management systems in sports clubs, known as "Socios."

Essentially, the platform digitized an existing model in the sports world and enhanced it with blockchain's benefits. As a result, Socios.com is a transparent, tamper-proof, and corruption-free digital governance system.

Through the Socios.com app, fans can influence club decisions, such as the design of team merchandise, banners, training facility names, and even goal celebration songs.

Fans use their tokens to vote, and the club implements the majority’s decision. Along with high engagement, fans can also receive financial rewards.

The only area fan tokens do not influence is the transfer policy. Fans cannot dictate which player a club should acquire—such decisions remain with the team’s coaches and management.

As of fall 2022, Socios.com partnered with over 150 organizations and teams from various sports worldwide. Fan tokens are not limited to football. They can be issued for racing teams, volleyball, basketball, tennis, American football, hockey, baseball, rugby, and even esports.

The Socios.com app is available for anyone to download on Android and iOS. It has been installed over 1.6 million times, and hundreds of thousands of users actively use it. The app supports various languages, including Russian.

What fan tokens are and how they are used

Fan tokens are utility cryptocurrencies that reflect the branding of different sports teams. They allow fans to vote and participate in certain decisions about the club's activities. Fans and users can buy fan tokens with CHZ on the Chiliz exchange.

Not only fans benefit from these tokens, but sports teams also do, as branded virtual coins provide additional revenue streams and serve as a powerful marketing tool. For example, teams that join Socios.com and issue branded assets receive a percentage of the commission fees collected from user transactions on the platform.

The first teams to issue tokens on the platform included Paris Saint-Germain, Juventus, AS Roma, West Ham United, and Atlético Madrid. Even the esports team, OG, joined the platform. A full list of fan tokens is available on the official Socios website.

Holders of branded fan tokens gain access to exclusive content, gamification, social connections, and other privileges.

Fan tokens offer the following benefits:

• Participate in voting conducted by sports clubs
• Place bets on game outcomes
• Earn loyalty tokens for high engagement on the app, which provide additional opportunities during matches
• Fan tokens can be bought directly on Socios.com or on the Chiliz.net exchange. They are also traded on several centralized cryptocurrency exchanges.

Features of CHZ cryptocurrency

CHZ cryptocurrency is a digital asset designed for sports fans. It was created to facilitate the purchase of fan tokens.

CHZ cryptocurrency was launched in the fall of 2018 on the Ethereum network, operating under the ERC-20 standard.

Since NFTs became highly popular in 2021, the price of CHZ tokens surged in March of that year, increasing by a record 1,650% in just two weeks. The highest price for Chiliz was reached on March 13, 2021, at $0.8915.

According to the analytical platform Messari, this growth allowed Chiliz cryptocurrency to become one of the 30 fastest-growing digital assets in 2021.

As of March 26, 2024, data from the world’s largest cryptocurrency data aggregator, CoinGecko, shows that CHZ was trading at $0.148.

Its market capitalization stood at $1,307,765,425, placing it 92nd in the CoinGecko ranking. Market capitalization is calculated by multiplying the price of tokens by the number in circulation. At the time of writing, there were 8.89 billion tokens in circulation.

By that moment, the price of CHZ had increased by 20.20% over the past seven days, significantly outperforming the global cryptocurrency market, which rose by only 13.00% in the same period. CHZ's growth also surpassed other cryptocurrencies in the Level 1 (L1) category, which advanced by just 3.80%.

It is worth noting that the total number of CHZ coins in circulation increases by approximately 94 million, or 1.6%, annually.

CHZ coins obtained from the sale of fan tokens, NFTs, and commission fees on the Chiliz.net exchange are burned. Over 65 million coins have already been burned this way.

The economy of CHZ cryptocurrency is supported not only by its limited supply but also by mechanisms such as staking and token burning.

Staking allows holders to lock their coins for a period of time to receive rewards and privileges in the system (e.g., increased voting influence or access to exclusive club events).

The burning mechanism, which destroys a certain number of tokens, reduces the circulating supply, contributing to the appreciation of the remaining tokens.

CHZ is traded on centralized crypto exchanges, with the most popular platforms for buying and trading the token being DigiFinex, Binance, and PointPay.

Advantages and disadvantages of CHZ token

Among its undeniable advantages, the following stand out:

• Enables participation in voting

Sports team fans can actively participate in decisions related to their clubs. They can vote on various issues, from uniform designs to team lineups.

• Allows the purchase of fan tokens

CHZ is used to buy fan tokens on the Socios.com platform.

• Provides partnership opportunities with clubs

The Socios.com app partners with sports organizations worldwide, including top-league football clubs. These partnerships make the CHZ token popular among diverse audiences.

• Highly liquid

CHZ is available on major cryptocurrency exchanges, ensuring high liquidity and easy trading access.

However, CHZ tokens also have notable disadvantages:

• Volatile

Like many other cryptocurrencies, CHZ is subject to high volatility, leading to significant price fluctuations. This makes it a risky asset.

• Dependent on partnerships

CHZ's success largely depends on partnerships established by the Socios.com app with sports clubs. If any of these partnerships unexpectedly end or change, the popularity and value of CHZ may decline.

• Exposed to regulatory risks

Like all cryptocurrencies, CHZ could be affected by government or regulatory actions. Changes in cryptocurrency laws could impact its accessibility and decrease its value.

• Affected by strong competition

Blockchain applications and digital assets are highly competitive. CHZ must continuously improve to stay ahead and attract new users.

Ways to store CHZ cryptocurrency

Cryptocurrencies can be stored in various wallets. Here are the types of wallets suitable for CHZ storage:

• Hardware wallets (cold wallets)
• Online and mobile wallets (hot wallets)
• Desktop wallets

If security is a top priority, wallets like Metamask, Trust Wallet, Ledger, or Trezor are recommended for storing CHZ. Cold wallets offer the highest level of security.

Chiliz project development prospects

The Chiliz project is undoubtedly successful with positive long-term prospects. Its main idea is to connect famous sports teams with their numerous fans.

At the moment, the project faces almost no competition, making it a leading and unrivaled initiative in the long term. It is unlikely that new projects appearing in the next few years will be able to catch up with this established and highly successful blockchain development.

Blockchain technology combined with branded virtual assets allows fans to influence certain decisions made by their favorite sports teams, such as choosing uniforms, selecting music for upcoming games, and more. Fans can actively participate in their teams’ lives through these networks.

Given the widespread interest in sports, the Chiliz project and its Socios app will likely continue to attract a large number of users.

The project also has numerous partners. As of September 2022, Socios.com boasted over 150 partnerships across 27 countries.

The project currently demonstrates substantial potential for further growth and development, with several factors supporting this:

• Expanding sports partnerships

Chiliz is actively partnering with new sports clubs and organizations in various fields, including volleyball, basketball, American football, and esports. This broadens the fan token market and significantly increases the platform's customer base.

• Geographical expansion

The project’s app is actively expanding into new regions, particularly in Asia and North America.

• Innovation-focused team

Chiliz integrates cutting-edge technologies, such as NFTs for sports memorabilia and virtual reality for immersive fan experiences. These innovations increase user engagement and bring additional revenue to the company.

• Active development of the DeFi platform

The project is integrating with decentralized financial services, offering staking, reward farming, and various financial instruments. This could attract new investors and increase liquidity for the native CHZ coin.

• Collaboration with regulators

This cooperation helps obtain the necessary licenses and approvals, facilitating expansion into different jurisdictions.

• Partnerships with media and entertainment platforms

Chiliz collaborates with TV networks, streaming services, and media platforms to distribute content. This should significantly increase its reach and attract new users.

In 2021, Chiliz released rare digital fan assets from the UFC mixed martial arts league. Around the same time, branded tokens from sports teams like Formula 1 and Alfa Romeo were launched.

In May 2022, famous footballer Lionel Messi signed a $20 million contract with Socios for the next three years, becoming an ambassador for the project.

Chiliz is also expanding into the once-popular metaverse trend. In August 2022, the company invested $100 million in the digital world of FC Barcelona by purchasing a 24.5% stake in Barça Studios, which develops digital content for the club.

The fan token idea has proven to be highly in demand and well-received by the global sports industry. According to Socios leadership, in 2021 alone, sports clubs earned over $200 million on the platform.

More and more well-known representatives of major sports are joining the Chiliz project and its Socios app. It is clear that Chiliz has successfully created a unique, innovative market that connects sports teams and their fans in an entirely new way.