Biteye: Comprehensive Analysis of Fan Economy Leader Chiliz
According to data from Rootdata, Chiliz raised funds in 2018, with a total fundraising amount of 65 million USD, and investors included several crypto funds such as Binance, OKEX, and FBG Capital.Author: Biteye
On October 4, the English football club Tottenham Hotspur announced the launch of the fan token $SPURS in collaboration with Chiliz. Tottenham Hotspur members and season ticket holders can receive the fan token for free. Tottenham Hotspur is the first Premier League team to enter Web3 in two years.
As a club with an average player value of 8.81 million euros, this collaboration adds significant value to Chiliz's ecosystem. This article provides a detailed analysis of Chiliz, which stands at the forefront of fan economy.
Introduction to Chiliz
Chiliz was founded in 2018 by Alexandre Dreyfus, who has years of experience in the internet industry. It started by establishing deep collaborations with numerous football clubs and is the first scalable sports token reward platform and sports crypto asset trading platform.
According to Rootdata, Chiliz raised a total of $65 million in funding in 2018, with investors including Binance, OKEX, FBG Capital, and other crypto funds.
Chiliz primarily serves the sports and entertainment industry, providing customized fan communication design solutions and monetization solutions for sports enterprises. It has already launched fan tokens in collaboration with world-renowned teams including Barcelona, Juventus, and Paris Saint-Germain.
Through the FTO (Fan Token Offering) model, users can purchase tokens for their favorite teams on Socios.com, developed by Chiliz. Clubs can control the rights of token holders through smart contracts, covering everything from jersey design to voting on team governance.
In addition to football teams, F1 teams, esports clubs, and the Ultimate Fighting Championship (UFC) have also joined Chiliz. Currently, there are 82 fan tokens in the Chiliz ecosystem, with over 150 sports partners.
Introduction to Fan Tokens
Among all industries, the sports industry has one of the strongest cohesion and the largest fan base, with football being the world's number one sport, attracting over 3 billion global followers and high spending from fans.
According to Football Benchmark, in the 19/20 season, Premier League fans alone spent £1.3 billion on watching matches and supporting their teams, indicating that the fan economy has already matured into a multi-billion dollar industry.
The concept of fan tokens originates from SocialFi and is a type of social token supported by individuals, teams, brands, or communities. Holders receive corresponding rights, such as exclusive events, interactions, and voting. As community consensus increases, the price also rises, and the community holding the tokens will receive real returns.
By securitizing individuals, it allows consumers to directly participate in the future performance and profits of individuals, making profit distribution fairer.
Therefore, in the Web3 model, the participants in the fan economy are primarily fans, stars, and platforms:
Fans are both consumers and investors, purchasing tokens to interact and benefiting from token price fluctuations;
Stars are the supporting entities behind the tokens, with prices fluctuating based on their achievements;
Platforms are the issuers, helping stars manage fan communities and events, earning fees and token dividends.
In the Chiliz ecosystem, fan tokens are a type of cryptocurrency designed to provide fans of teams, bands, and other groups with membership benefits, such as access to exclusive content, prizes, viewing experiences, and voting rights on club decisions.
By launching fan tokens, clubs can "solidify" their fan base, maintaining interaction between stars and fans to enhance loyalty and bridge the gap between fans and stars. These activities and rewards were difficult to implement before the existence of fan tokens. Additionally, fan tokens explore various empowerment methods, such as allowing fans to vote on the slogan on the team captain's armband, gaining unique experiences like watching matches in VIP areas, accessing the team's stadium backstage, and receiving special discounts on club merchandise.
For example, holders of Inter Milan's fan tokens voted for the first new goal celebration song in eight years, participated in selecting the official team bus, and voted on jersey designs.
The Tool to Fan Club: Socios.com
What is Socios
In 2019, Chiliz launched Socios.com, an application aimed at mainstream consumers. Socios, supported by the Chiliz chain, is a fan engagement and rewards application that allows fans to interact with their favorite teams and clubs through digital assets known as fan tokens.
Fans can exchange $CHZ for fan tokens of their favorite teams, obtain fan tokens, and participate in a series of team-related votes and discounts. Through Socios.com and fan tokens, fans can engage in the decision-making processes of their supported football clubs, expressing their opinions through voting.
The features of Socios are as follows:
1) Issuing fan tokens and determining the benefits for fan token holders: Socios has a fan token offering (FTO) launchpad that enables clubs to easily issue and distribute fan tokens. Additionally, fan tokens have a burning feature that can increase the scarcity of tokens for sports teams, thereby enhancing their value. The benefits for fan token holders vary by team, as each team can decide what benefits token holders can receive.
2) Trading: Fans can directly purchase $CHZ using credit cards and buy and trade team fan tokens within Socios using $CHZ;
3) Voting: Fan token holders have the ability to influence decisions made by their supported teams. Fans can directly participate in the decision-making processes of their favorite teams through Socios. For example, Arsenal Football Club fans can vote on the design of team merchandise, in-game banners, naming of playgrounds, or goal celebration songs using the Arsenal fan token (AFC), while also receiving rewards and unique experiences. The platform ensures that clubs respect fans' voting results fairly through smart contracts.
Some examples of choices influenced by fan token holders include the design of the team bus or the pattern selection for new team gear. For each vote, every fan token holder receives one vote. The weight of the vote depends on the number of fan tokens held. If you hold one fan token, your voting weight is 1. However, if you hold 50 fan tokens, your vote will have 50 times the influence.
4) Earning loyalty points: Token holders can also participate in team votes, games, quizzes, and other activities to earn points. When you use the app and accumulate tokens, you will earn SSU, which is our in-app loyalty token. Loyalty tokens can be redeemed for team merchandise tickets, memorabilia, match day and VIP experiences, meet-and-greet events, and more in our fan rewards feature.
5) Token Hunt: This is an augmented reality game where players can find free tokens hidden within the community.
The Socios.com platform bridges the gap between fans and teams, allowing both sides to connect in more diverse and richer ways. Fan tokens enable fans to enjoy membership-like benefits without paying annual or monthly subscription fees, allowing them to retain them permanently without incurring additional costs for privileges.
Currently, popular football clubs with millions of fans have partnered with Chiliz to issue fan tokens, including Arsenal Football Club's AFC, Atlético Madrid's ATM, Barcelona Football Club's BAR, Manchester City's CITY, Paris Saint-Germain's PSG, and more, all operating under the Socios APP.
Tottenham Hotspur
Tottenham Hotspur Football Club, abbreviated as Spurs, is a football club located in Tottenham, London, England, currently competing in the English Premier League.
Spurs were the first team in the 20th century to become dual champions of the league and the FA Cup and are one of three teams to have won the FA Cup in consecutive years, being the only team to have achieved this feat twice.
In 1963, they won the European Cup Winners' Cup, becoming the first British team to win a European trophy. Their Twitter currently has 8.8 million followers, and they consistently rank in the top fifteen of Deloitte's Football Club Wealth Rankings and Forbes' Football Club Wealth Rankings.
Spurs decided to utilize blockchain technology to enhance fan engagement and provide rewards through Web3 fan tokens.
This innovative initiative is driven by Socios.com, aligning Tottenham Hotspur with other renowned football clubs such as Manchester City, Arsenal, Barcelona, Paris Saint-Germain, Juventus, Inter Milan, AC Milan, Atlético Madrid, and Roma, all of which have adopted blockchain technology to revolutionize fan engagement.
In addition to fan tokens, Spurs will also collaborate with MatchWornShirt, a platform that facilitates the auction of jerseys worn by players during matches. The certification of these auctions on the Chiliz blockchain ensures transparency and trust in the process.
Tottenham Hotspur plans to integrate fan tokens into its existing loyalty program and mobile app, aiming to provide fans with an enhanced and seamless digital experience while fostering a stronger sense of community among supporters.
Spurs fan tokens are currently an additional benefit in the club's membership program, with all One Hotspur+ members and season ticket holders (aged 18 and over) receiving 5 free fan tokens, while 1 Hotspur/1 Hotspur Connect member will receive 1 fan token.
Club member fans will receive coupon codes via email, which can then be redeemed on Socios.com.
These tokens can be used to earn points to unlock rewards and experiences, providing tailored rewards for Spurs fans, such as big screen messages, VIP tickets, Spurs store vouchers, and virtual meet-and-greets. The Spurs club has taken the time to engage with its fan advisory board to discuss how Spurs fan token holders will benefit and participate in the rewards offered on Socios.com.
Ryan Norys, Tottenham Hotspur's Director of Commercial Sales, stated: "We are excited to offer a range of new rewards and experiences related to the club for fans around the world. Our fan tokens will build on the many advantages of our existing membership program. We will provide free fan tokens to all members and season ticket holders at launch and collaborate with Socios.com to offer a range of rewards appealing to both domestic and international fans. This partnership is another example of how the club is striving to create additional recurring revenue streams to reinvest in our football activities."
Emma Diskin, COO of Socios.com, stated: "Fans around the world can express their support for the club through fan tokens and gain unique experiences on Socios.com. With this release, Spurs fans will be able to participate in polls, predictions, and contests related to the club, earning points to unlock new rewards and experiences."
Future Outlook for Chiliz
Chiliz Chain Mainnet
In May 2023, Chiliz officially launched the Chiliz Chain public mainnet (all previously issued fan tokens have been migrated to this mainnet). On August 30, Binance announced support for the Chiliz Chain mainnet, and on October 20, Binance announced the official completion of the Chiliz Chain mainnet integration.
Chiliz Chain is a Layer 1, EVM-compatible, interoperable ecosystem that will introduce a system composed of 11 active Proof of Stake Authority (PoSA) node validators responsible for verifying transactions and creating a highly secure environment. Approved developers can build projects on it, which will form the backbone of Web3 in the sports sector. Currently announced validators include Ankr, Paribu, Meria, and Luganodes.
All fees on Chiliz Chain will be paid using the native Chiliz token $CHZ, which operates in the same way as ETH on Ethereum, meaning that CHZ can be used for:
Paying gas to deploy or call smart contracts;
Executing cross-chain operations, such as transferring assets between Chiliz Chain and Ethereum;
Protecting the network through staking or delegation and earning rewards for staking their $CHZ on the chain.
Features of Chiliz Chain:
Blocks are generated by a limited set of validators;
Validators take turns generating blocks in a PoSA manner, similar to Ethereum's Clique consensus engine;
The validator set is elected in and out based on staking governance on the Chiliz chain;
The Parlia consensus engine interacts with a set of system contracts to achieve activity reduction, revenue distribution, and validator set updates.
Currently, Chiliz Chain is the blockchain technology supporting the Socios.com and fan token digital sports ecosystem, enabling teams and clubs to establish direct relationships with global audiences. According to data from October, the ecosystem currently has over 2 million wallets and a total transaction volume exceeding $4.5 million.
The goal of Chiliz Chain is to become the leading blockchain for enterprise-level sports and entertainment brands, allowing any developer interested in exploring the potential of Chiliz fan tokens to leverage the vast network of over 150 leading sports IPs. As an EVM-compatible chain, Chiliz Chain will remain compatible with Ethereum tools, making it simple and easy to build within the Chiliz Chain environment to create a unique Web3 sports ecosystem.
Chiliz Ecosystem
On March 1, 2023, Chiliz announced a $50 million accelerator program and a series of global hackathons to drive innovation on Chiliz Chain.
This accelerator program will be driven by Chiliz Labs, a $50 million accelerator and incubator for early-stage sports blockchain projects looking to build on Chiliz Chain.
A series of Web3 sports projects incubated by Chiliz Labs will be unveiled in the coming months. Projects will include metaverse-based sports, football and soccer manager games, reward and participation-driven community platforms, social gaming platforms, AI-driven content platforms, 3D digital sports collectibles, and NFT ticketing programs.
Currently, the main projects in the Chiliz Chain ecosystem include:
1) ONTO Wallet: ONTO Wallet has over 1 million users, supports over 1,000 dApps, and covers more than 60 blockchains, making it a well-known decentralized multi-chain platform for user identity and asset management.
2) Blockasset: A verified NFT and token ecosystem by athletes, enabling fans and athletes to connect in unprecedented ways through the power of Web3.
3) LiveLike: An audience engagement platform that transforms online customers into loyal fans through customized interactive experiences.
4) FanFest: An SDK for membership/token-gated virtual experiences, commercializing decentralized fan communities.
5) Tickie: A complete ticketing and fan engagement solution that maximizes the potential of every ticket through Web3.
6) Legend: Designs and creates unique digital trophies and medals, bringing a modern touch to traditional sports awards through its innovative NFT platform.
7) Abrakadabra Game Technologies: Revolutionizing the gaming industry with patented technology that can create games based on real-life videos.
8) TopGoal: The decentralized football game Footballcraft under TopGoal will launch on Chiliz.
9) Football AlphaVerse: An AI-driven 3D interactive entertainment platform dedicated to football, clubs, and fans.
Conclusion
As a blockchain focused on the sports entertainment fan economy, Chiliz has partnered with many world-renowned football clubs, such as Barcelona, Juventus, Paris Saint-Germain, and Tottenham Hotspur, with over 82 fan tokens and more than 150 partners. Through the issuance and trading of fan tokens, Chiliz is pioneering a new prospect for the fan economy, exploring the fan potential in the sports market in innovative ways.
Socios.com is an important tool for Chiliz, serving as a fan engagement and rewards application. Fans can use $CHZ on Socios.com to purchase fan tokens for their favorite teams, participate in voting, and enjoy unique benefits. Through this platform, fans can directly influence their favorite teams, voting on designs, activities, and decisions, while maintaining closer interaction with the teams.
The emergence of this new fan economy model by Chiliz and Socios.com has established closer connections between teams, stars, and fans, bringing more possibilities and innovations to the sports industry and the future fan economy. With the collaboration with Tottenham Hotspur and the launch of the mainnet, it is worth long-term attention how the Chiliz ecosystem will continue to develop.
