What is Chiliz (CHZ) and how does it work? All you need to know

What is Chiliz (CHZ)?

Chiliz operates the Socios platform and issues the CHZ token, an ERC-20 token on the Chiliz blockchain. CHZ is used as the primary currency on the Socios platform, enabling users to buy NFTs representing connections to their favorite teams and entertainers. Socios provides a comprehensive ecosystem for fan tokens, offering a website and mobile apps for purchasing, earning, trading, and exchanging NFTs for team-branded benefits and merchandise. Currently, Socios features NFTs for over two dozen sports and esports teams, with more to come.

How does Chiliz work?

The fan tokens available for purchase on Socios are more than just collectibles. These NFTs, branded with team logos, enable fans to engage interactively with their teams and have a say in team decisions. Token holders can express themselves by participating in polls hosted by teams that have partnered with Socios.

For instance, Juventus FC recently allowed token holders to choose the goal celebration song played at matches. After using "Chelsea Dagger" for eight years, fans voted to replace it with Blur's "Song 2," prompting the team to make the switch.

Similarly, FC Barcelona fans selected a mural to adorn the team's dressing room, while Paris Saint-Germain supporters chose a message for the captain's armband during games. OG esports followers picked an in-game banner for a charity event, and Team Heretics fans decided on a design for a branded scarf worn by the team during tournaments and sold as fan merchandise.

Owning a team's NFT grants you voting rights in their polls; the more tokens you have, the greater your influence on team decisions. This encourages users to buy, trade, and collect more tokens.

Teams and entertainers can offer additional perks to token holders, such as premium event seats, exclusive meet-the-team live streams, branded merchandise, gamified experiences, and leaderboard access. As fans accumulate more tokens, they unlock greater benefits and develop a closer bond with the team.

NFTs are distributed through Fan Token Offerings by Socios partners, with tokens stored on the Socios Proof of Authority side chain. Prices of fan tokens fluctuate based on team popularity and market demand.

Chiliz, established in 2012 as part of the Mediarex Group in Malta, a global sports and entertainment organization, began active development of its blockchain-based Socios platform in 2018. In October 2018, Chiliz launched its CHZ token, which quickly gained listing on various cryptocurrency exchanges worldwide.

The first major partnership for Chiliz was with the Juventus soccer club based in Turin, Italy. Juventus conducted its Fan Token Offering in November 2019, selling 1.3 million tokens out of a total supply of 20 million by the end of the month.

In December 2019, Chiliz released the Socios application and website, supported by a $66 million investment through Private Placement.

Today, the Socios app is available on the web and on millions of mobile devices. Chiliz operates not only from its headquarters in Malta but also from offices in France, Turkey, Spain, South Korea, and Brazil.

While continuing to add soccer and esports teams to its roster of partners, Chiliz plans to expand the Socios marketplace to include tokens from other sports and entertainment sectors. The company has recently announced its entry into the American sports market.

What sets Chiliz apart from others?

Chiliz distinguishes itself with a clear vision and strategic focus on fan tokens. While cryptocurrencies and NFTs offer diverse applications, Chiliz views crypto primarily as a facilitator for its core business of nurturing fan communities.

This targeted approach has helped Chiliz attract investors and mitigate the volatility typical of cryptocurrency markets. Chiliz isn't merely a cryptocurrency company; rather, it leverages crypto as a foundational technology to achieve business objectives unrelated to cryptocurrency.

NFTs have demonstrated their worth in gaming by enabling users to enhance their gaming experiences, customize profiles, and accomplish in-game objectives. They are also widely employed in customer loyalty initiatives. Chiliz has emerged as a pioneer in utilizing this technology to support sports teams and engage with their fans.

Socios exemplifies one of the innovative applications of NFT technology in this context.

What is the circulating supply of Chiliz (CHZ) coins?

Chiliz introduced the CHZ token in 2018 without a public offering event. Presently, there are 8,888,888,888 CHZ tokens circulating out of a total supply of 8,888,888,888.

CHZ tokens adhere to the ERC-20 and BEP-20 standards, making them compatible with various platforms. They are available for purchase on the chiliz.net exchange and other cryptocurrency exchanges like Kriptomat.

What measures are in place to secure the Chiliz Network?

The smart contracts supporting CHZ and the Socios platform underwent independent audits, and the findings were publicly disclosed. Chiliz allocates 5% of its revenues towards continual security and audit expenses.

Token transactions occur on a private sidechain and employ a Proof of Authority security mechanism.

How to use Chiliz?

There are two primary ways to utilize the Chiliz platform, Socios, and CHZ.

Firstly, you can engage in the Socios fan token ecosystem. By visiting the Socios marketplace, you can acquire fan tokens for your preferred teams, thereby establishing a connection with them. This process is straightforward, and you can even earn tokens by facilitating partnerships between Socios and new teams.

The second option is to invest in CHZ. The Chiliz business model has demonstrated resilience against cryptocurrency market fluctuations, making the token appealing to investors looking to mitigate the volatility associated with major currencies in the market.

How to choose a Chiliz wallet?

CHZ is compatible with both the ERC-20 and BEP-20 standards, allowing you to use any Ethereum-compatible wallet, including hardware wallets, to access and manage your CHZ funds.

Chiliz provides an on-site wallet at chiliz.net, which is where most users purchase their CHZ tokens. This wallet is user-friendly and designed for sports fans rather than cryptocurrency experts.

You also have the option to store your CHZ in a wallet of your choice. Web wallets, which are accessible from both desktop and mobile devices, are a popular choice due to their ease of use, but they are considered "hot wallets" and may be less secure. If you opt for a web wallet, ensure that the provider has a strong security and custody track record.

For enhanced security, hardware wallets are recommended. Although not free like web wallets, hardware wallets such as those offered by Ledger, Trezor, KeepKey, and Prokey provide an additional layer of protection, ensuring that even if your PC or smartphone is compromised, your crypto funds remain secure.

Kriptomat offers a free and secure storage solution for CHZ tokens, combining high-grade security with user-friendly features to simplify the storage and trading of CHZ.

In summary, Chiliz is a sports and esports platform that produces branded tokens enabling fans to engage with teams. By integrating its Socios platform and token marketplace with an Ethereum-based coin and numerous branded fan tokens, Chiliz has developed a comprehensive economy for team-fan interactions.

The CHZ token serves two primary purposes. Some individuals acquire it to purchase fan tokens and show support for their favorite teams on Socios. Others view it as an attractive investment option that is somewhat insulated from the volatility of the broader cryptocurrency market. CHZ could be considered as an alternative or complement to stablecoins when constructing a diversified crypto investment portfolio.