Chiliz: A New Way To Support Your Favorite Teams
Sports moves people like nothing else. Did you know for example that the World Cup attracts a total of 5,4 billion viewers? Averaging something like 11,6 million viewers per game!
Major sport events have a way of taking their fans through an emotional rollercoaster. After all, supporting a specific team is mostly an emotional attachment, right? We typically support our native country, our home town’s football team even if in the 3rd division, etc. Sport has found a way to our heart.
Up until now, they way we interact with our favorite teams is by attending the actual games, live events, and buy merchandise. Some teams go a step further in their interaction with fans by offering them to become owners of the club through something called “certificates”. These is an old-fashioned way to involve your fans where the team issues new shares of their company for $100 a piece. By buying a share of the company, you become owner of your favorite team (of a small percentage) and have a nice folder with the share certificate somewhere in your living room. Or framed, like the real die-hards.
For example, take the Green Bay Packers, coincidentally also my favorite American Football Team! Green Bay is the only franchise raising capital from their supporters using fans certificates. This November 2022, the Packers issued certificates at $300 each for a total of 198.000 shares. Though this sale, they raised almost $60 million. This is the 6th time in the Packers’ history since 1923. They have now a total of 500.000 shareholders and $150 million raised.
However, typically fans cannot sell their certificates, have no voting rights in the team’s decisions, and receive NO dividend. It is purely a memorabilia and a token of your support to the team!
Chiliz’s Fan Monetization Strategies
Speaking of token of support, Chiliz is taking fan support to a whole new level. Chiliz is pioneering a new way for die-hard fans to interact with their favorite teams. They do this by providing what they call a tokenized engagement sports platform.
A toke… what?
It is a fan engagement platform that allows users to use Chiliz tokens (CHZ) to interact with some of the world’s biggest sports teams, including Barcelona, Juventus, and Paris Saint-Germain
Let me break it down.
Instead of boring paper certificates or standard merchandise, they allow sports team to issue tokens. Also called Fan Tokens!
Through their platform, fans can buy tokens and by doing so have a whole new way of interacting with their favorite team which is actually impacting real world’s events.
How?
- Voting rights on team’s decisions like logo’s, shirt color, and even team composition for some friendly games
- Access to exclusive live and digital events (for example, locker room access)
- Discount on live game tickets
- Access to exclusive collectibles and memorabilia (through NFT technology)
And much more…
In other words, Chiliz gamified team management and found a way to involve the fans in it through the fan tokens.
The Strength Of Chiliz Ecosystem
Through the use of the Chiliz token (CHZ), fans can purchase and trade digital assets, such as team jerseys, tickets, and other special offers. With Chiliz, fans can get closer to their favorite teams and gain access to exclusive content and rewards. Fans can also vote on decisions made by their team, giving them a voice in the decisions their team makes. Through the use of the Chiliz token, fans can also participate in fan-driven competitions and events. In addition to providing a platform for fans to interact with their favorite teams, Chiliz also provides a way for teams to monetize their fan engagement. Teams can issue their own branded tokens and use them to offer rewards and incentives to their fans. These tokens can also be used to purchase tickets, merchandise, and other benefits.
And they’re getting traction. Chiliz is already working with 14 NHL teams, 15 NHL teams, 28 NBA teams, and about 50 football clubs, including names like: Paris Saint-Germain, Napoli, Inter, Juventus, AC Milan, Atletico de Madrid, and many more.
The potential is real. Think that the global market for sports collectibles alone is estimated at $26 billion! This estimate is does not even take NFTs into account. The projections for the coming years is that the market can easily go 5-10 times bigger.
How Does Chiliz Work?
Chiliz’s new digital fan experience begins on the team crowd management platform called: Socios.com
On Socios.com, sport fans can play an active role in guiding teams decisions. They buy fan tokens which give them voting rights, and act like loyalty cards by giving access to all the unique fans experiences. This is made possible by blockchain-based fan tokens which allows for secure and trusted deployment of ownership and voting rights. All based on smart contracts.
There are 4 types of tokens available on the Socios.com platform.
Chiliz’s Tokens: CHZ
CHZ tokens are the native tokens on the Chiliz ecosystem. They act in a similar wat as ETH on Ethereum Mainet. CHZ is defined both as an ERC20 on Ethereum and as a BEP2 on Binance Network.
By buying CHZ tokens, you get access to the Chiliz ecosystem. You can exchange it to purchase fan tokens and for all other interactions on the platform.
CHZ have a pretty strong deflationary tokenomics with a burning mechanism on trading fees and net proceeds. For the techies:
- 20% of trading fees in CHZ
- 10% of the net proceeds from a fan tokens offer (FTO) – this is the first time a team issues their fan tokens
- 20% of the net proceeds of NFT and collectibles
Fan Tokens
These are the tokens issued by each of the sports team on the platform. These tokens create another form of fundraising for the teams partnering up with Chiliz. AC Milan raised $6 million in just 30 minutes during their FTO! And in 2022, fan tokens generated a total of $30 million in funding!
The teams have full control on what fans can do with their fan tokens. Some of them, even take it as far as letting the fan base decide on the team’s formation! Apollon FC, one of Cyprus first league football team, did just that and played an entire season game letting the fans decide on the 11 starting players, changes, and overall strategy.
Typically fan tokens are inflationary, meaning that the team can issue an infinite amount of fan tokens. They do however have a built in burning mechanism based on how well the team is doing during the year. So the more the team scores, the more tokens are burned, the more scarce your tokens.
Anyway, bottom line is: team can go as nuts as they wish to!
Locker Tokens
Locker tokens are a specific, temporary type of tokens a team can issue to test demand before an official FTO. On the Socios.com platform, teams issue Locker Tokens for 120 days. In this period of time, fans can exchange their CHZ for Locker Tokens. Locker Tokens will be swapped once the official Fan Tokens are launched, giving fans a 10% CHZ cashback on the platform. Should the FTO not go through any more, the locked CHZ are paid back 100%.
NFT
Socios.com teamed up with Enjine and Chainlink to allow teams to mint their own unique NFT collections and limited editions sports memorabilia. For example, if a player scored their 100th goal, a team might issue a special NFT collectible dedicated to that very player!
What I Think About Chiliz
Chiliz is creating a fan-driven economy and is making a huge impact on the sports industry by giving fans a way to show their loyalty and have a real say in the decisions of their favorite teams. This is only the beginning for Chiliz, and we can expect to see even more innovative ways for fans to engage with their teams in the future. After all, many fans enjoy the idea of being able to interact with their team and have a say in how the team is managed, even on the smallest of things like the jersey they wear in a specific game.
I like the project itself. It is an indirect, fun way to “bet” on your favorite team with hundreds of million of users being introduced to a fun application using blockchain technology. Its long term success will definitely rest on voting power and rewards fans really care about.
In terms of investment, I honestly do not see the fan tokens as an investment. Most of them are highly inflationary and they are designed to interact with your favorite team. So, if you are not getting any pleasure out of that, no point in owning them. It is however a different story for CHZ, Chiliz’s native token. If the platform does well, so will the token.
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Disclosure
These are unqualified opinions, and this newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor, and do your own research.
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