Key points
- Chiliz (CHZ) is the native cryptocurrency of the Socios.com platform for issuing and trading fan tokens. It ranks among the top 50 cryptoassets by market value.
- Chiliz, the company behind Socios.com, works with dozens of well-known clubs across multiple sports that issue digital assets for their fans on the platform.
- In 2021, partner clubs on Socios generated more than $200m in aggregate revenue.
- Lionel Messi is the platform’s global ambassador.
Who created Chiliz and Socios.com
Chiliz was founded by entrepreneur and crypto-enthusiast Alexandre Dreyfus in 2018 as a subsidiary of Malta-based Mediarex Group, which operates in sport and entertainment.
In 2018 Chiliz raised $66m through private investment rounds. Key investors included Binance Labs, CeYuan Ventures, Jump Capital and Kosmos Capital.
In late December 2019 the Chiliz team launched the sports-fan platform Socios.com, built using its own Chiliz Chain blockchain. The platform’s base asset is the Chiliz (CHZ) cryptocurrency.
In early 2020 the centralised cryptocurrency exchange Chiliz.net went live, billed as “the world’s first exchange for sports and entertainment”.
The Chiliz team numbers more than 220 people. Offices are in Spain, Switzerland and Malta, with representatives in Turkey, the United States, France, the United Kingdom, South Korea and Brazil.
How the Chiliz Chain blockchain works
To address Ethereum’s high fees, Chiliz launched its sidechain, Chiliz Chain, in October 2019.
Blocks are produced on average every five seconds and transactions are free. The chain’s primary purpose is issuing and circulating fan tokens—more than seventy have been minted to date.
To maximise throughput, Chiliz Chain uses a Proof-of-Authority (PoA) consensus protocol. This variant of Proof-of-Stake relies on a limited set of trusted validator nodes (masternodes) to produce blocks and approve transactions; there are no block rewards. Performance comes at the cost of decentralisation: Chiliz Chain is run by just seven masternodes, owned by the company and its largest partners.
As of September 2022 the network had more than 1.6m user accounts, roughly matching downloads of the Socios.com mobile app.
Since March 2022 a new version, Chiliz Chain 2.0, has been available on testnet. It is a standalone layer-one network with cheap, fast transactions. Chiliz says full compatibility with EVM will let Ethereum‑ecosystem developers issue NFTs and fan tokens on Chiliz Chain, as well as launch DeFi services, blockchain games and loyalty programmes.
What CHZ is for
The native CHZ token was issued on Ethereum in autumn 2018 under the ERC-20 standard. The maximum supply is 8.88bn tokens; around 6bn were in circulation by autumn 2022. The free float grows by roughly 94m CHZ, or 1.6%, a year. About 150,000 addresses hold CHZ, according to Etherscan.
The initial allocation was as follows:
- 15% — strategic acquisitions;
- 15% — marketing programmes;
- 20% — user-base reserve;
- 7.5% — seed-round investors;
- 34.5% — private token sale investors;
- 5% — the Chiliz and Socios teams;
- 3% — project advisers.
A portion of CHZ from fan‑token and NFT sales and from trading fees on the Chiliz.net exchange is burned. More than 65m tokens have been destroyed this way.
Chiliz is used for all payments and trades on Socios.com: fan tokens can be bought and sold only for CHZ. The token is slated to be reissued on Chiliz Chain 2.0, after which it will also be used for network governance, staking and transaction fees.
From January to April 2021 the price of CHZ rose from $0.02 to $0.77—more than 38-fold. Despite the crypto-market slump in 2022, the token recovered between June and September. Chiliz is the third-largest token in the NFT project category by market capitalisation, after ApeCoin (APE) and Flow, with a market value of $1.4bn.
How fan tokens made Socios popular
Socios.com was the first blockchain project to issue digital assets designed specifically for sports fans. These “fan tokens” are fungible ERC‑20 assets issued on Chiliz Chain.
Each fan token is “branded” by a particular sports team or organisation and gives holders a say in club activities and access to perks such as exclusive merchandise, match tickets and closed events.
The first to issue a fan token on Socios was Juventus, the storied Italian football club. Dozens of Europe’s best‑known teams followed: Atlético Madrid, Paris Saint‑Germain, Roma, Barcelona, Arsenal and others, as did the national teams of Argentina and Portugal. The full list of football tokens is published on the Socios website.
Fan tokens also let users:
- take part in polls on Socios.com organised by partners;
- place bets on game outcomes;
- earn “loyalty tokens” for activity on the platform, which can be spent on extra match‑day opportunities.
Beyond Socios.com and the Chiliz.net exchange, fan tokens trade on several centralised crypto exchanges.
In December 2020, began a strategic partnership between Socios.com and the Binance cryptocurrency exchange. It distributed fan tokens via staking BNB, BUSD and CHZ on Launchpool and listed tokens for Paris Saint‑Germain and Juventus. Later, more fan tokens were distributed the same way and subsequently listed on Binance.
In late August 2022 Bybit also listed several fan tokens.
Which sports are on Socios.com
By late September 2022 more than 150 organisations, teams and associations across 25 countries were partners of Socios. Beyond football, fan tokens have been issued for many sports:
- Mixed martial arts: Professional Fighters League (PFL), Ultimate Fighting Championship (UFC);
- Motor racing: Roush Fenway Racing, Aston Martin Cognizant F1, Alfa Romeo F1 Team ORLEN;
- Basketball (US): Chicago Bulls, Boston Celtics, Los Angeles Lakers, etc.
- Tennis: Davis Cup;
- American football (US): Philadelphia Eagles, New York Giants, Chicago Bears, etc.;
- Rugby: The Sharks, Stade Francais Paris, Leicester Tigers, etc.
- Ice hockey (US): New York Rangers, Detroit Red Wings, Pittsburgh Penguins, etc.;
- Soccer (US and Canada): Austin FC, LA Galaxy, Atlanta United FC, Toronto FC, etc.
- Esports: OG, Endpoint CeX, Vitality, etc.
The Socios mobile app
The Socios.com mobile app, aimed at sports fans, is available for Android and iOS. It is the project’s primary platform. The app has over 1.6m downloads and several hundred thousand active users. It is available in multiple languages, including Russian.
Socios.com lets token‑holding fans access exclusive promotions, games and privileges, influence decisions by their favourite teams and earn rewards for participating in polls, votes, blockchain games and other activity.
Outlook for Chiliz and Socios.com
By late September 2022 Socios.com had more than 150 partners in 27 countries. Alongside scores of popular football clubs, it has attracted sports organisations from many other fields. In 2021 fan tokens were launched for the UFC, and sales began for Formula 1 teams Aston Martin and Alfa Romeo.
America’s big leagues, the NHL and NBA, have signed partnership agreements but have yet to launch fan tokens on Socios.com; that could follow the mainnet launch of Chiliz Chain 2.0.
In May 2022 the celebrated footballer Lionel Messi signed a three-year, $20m contract with Socios.com to serve as brand ambassador, appearing in advertising campaigns and promotions.
Chiliz is developing its metaverse efforts. In August 2022 the blockchain company invested $100m in the digital world of Barcelona football club by acquiring a 24.5% stake in Barça Studios, which develops digital content.
The fan‑token concept has found a receptive audience in global sport. According to Socios, club revenues on the platform exceeded $200m in 2021. More prominent sports organisations are joining. Chiliz has built a new channel for fan engagement—and a new market.