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Chiliz (CHZ): Bringing Blockchain and Crypto to Sports Fandom

Chiliz is redefining the way global audiences engage with their favorite sports teams by giving each sports fan a voice and a vote.

By Cryptopedia Staff

Updated December 23, 20215 min read

Chiliz — Bringing Blockchain and Crypto to SportsFandom


Chiliz is a Malta-based FinTech provider that is redefining the way sports fans engage with their favorite teams. The primary Chiliz offering is the Socios platform, a blockchain-enabled sports entertainment platform that empowers users with a variety of ways to directly vote on decisions that impact their favorite teams. The Chiliz platform’s rich array of features gives teams and athletes new ways to connect with their fans and generate revenue.

Chiliz: From Passive Spectators to Active Influencers

Chiliz is a Malta-based FinTech provider that is developing new ways for sports fans to engage with their favorite teams and athletes. The primary Chiliz offering is Socios, a blockchain-enabled sports entertainment platform that empowers users with a variety of ways to vote on decisions that directly impact their favorite teams. Conversely, the platform’s rich array of features provides team owners and league operators with new ways of connecting to their followers and generating revenue. The Socios platform is underpinned by the Chiliz Token (CHZ), which serves as a pricing benchmark and medium of exchange across the Chiliz ecosystem.

Socios Fan Token: Fan-Driven Decision Making

Chiliz features partnerships with some of the most established sporting institutions in the world, including Barcelona FC, Juventus, and Paris Saint-Germain in soccer, the Ultimate Fighting Championship (UFC) in mixed martial arts, and a number of gaming organizations. Sports fans can get started by joining the Socios.com platform and obtaining CHZ, which can be used to purchase Fan Tokens for a particular sporting organization. While CHZ tokens serve as the exclusive currency of the platform, Fan Tokens are issued by internationally recognized sports teams and organizations and are tokenized representations of voting rights for their respective issuers. In other words, users who hold Fan Tokens for a team can vote on whatever decisions that team chooses to crowdsource to their supporters on Socios.

The Socios voting process is enabled via smart contracts that execute automatically and transparently on the Chiliz blockchain, and the decisions being voted upon can range from selecting a new jersey design to deciding team matchups for upcoming exhibition games. Organizations that fully embrace this crowdsourced decision engine can even allow their fans to help choose which players are drafted onto the team or brainstorm new merchandise designs to ensure maximum consumer appeal. As a result, Fan Tokens are also sometimes referred to as ‘Vote Tokens.’

Every sporting organization utilizing Chiliz technology has its own limited supply of Fan Tokens, and each time a new organization joins Socios, they must decide the initial sale price of their Fan Tokens — which is denominated in CHZ. These Fan Tokens will then be made available for purchase on a first come, first served basis at the agreed price point in what is called a Fan Token Offering (FTO). Prior to launching an FTO, Socios will publicly disclose the essential information relevant to the token release, including the FTO’s start and end dates, the Fan Token’s opening price, and fully diluted market cap — thereby allowing users to make well-informed investment decisions.

Chiliz Creates New Ways to Engage

While Fan Tokens are primarily intended to be used to give sports fans a voice in directing their favorite sporting organization’s decision-making process, there are other ways users can potentially benefit from these digital assets. Once a user has publicly purchased a Fan Token via an FTO, they are free to exchange it with other users on Chiliz Exchange, which is Socios’ peer-to-peer (P2P) marketplace. Chiliz Exchange can be accessed through a simple web interface or via an iOS/Android mobile app, and this aftermarket helps drive user interaction, particularly as demand for certain teams’ Fan Tokens fluctuates in response to breaking news or upcoming events. Additionally, Fan Tokens can be exchanged for other goods such as VIP experiences, free tickets, and limited-edition merchandise at the discretion of the issuing organization.

While Socios is currently Chiliz’ primary offering, the company is continuously broadening its application. This approach to blockchain implementation has led to the establishment of the Chiliz Blockchain Campus, a privately-owned crypto incubator focused on accelerating blockchain technology adoption across Asia and Europe.

How Does Chiliz Work?

Chiliz’ success in driving widespread adoption to its sports entertainment platform is due to the fact that users all over the world can participate with minimal understanding of the system’s underlying blockchain technology. While understated, Chiliz’ use of blockchain technology plays a crucial role in ensuring that the digital assets within its ecosystem — CHZ tokens and Fan Tokens — are effortlessly traceable, verifiable, and immutable.

In October 2018, a fixed supply of 8.8 billion CHZ tokens was minted on the main Ethereum network and distributed to early contributors, with no public sales beyond what was made available through select crypto exchanges. While CHZ started as an ERC-20 token, the token was also designed to be BEP-2 compatible due to Binance Launchpool’s active role in releasing new Fan Tokens as part of a strategic partnership with Chiliz.

By contrast, Fan Tokens are minted on the Socios sidechain, which utilizes a Proof-of-Authority (PoA) consensus mechanism. Rather than relying on network decentralization, PoA gives a small set of pre-approved “authority” nodes the power to create and validate new blocks. Because these authority nodes play a central role in ensuring the security and success of the network, the organizations or individuals who run an authority node are typically publicly revealed in order to establish trust in the system. While the Chiliz team is currently responsible for validating most of the network’s transactions, European retail giant Rakuten recently announced that it would be running an authority node on the Chiliz blockchain. As Chiliz continues to gain traction, the team hopes to build a consortium of strategic partners willing to act as network validators.

As a result, permissioned PoA networks like Chiliz are not as decentralized as many other blockchain networks that follow common protocols such as Proof of Work (PoW) and Proof of Stake (PoS). However, PoA networks are easily scalable, highly secure, and capable of processing a high number of transactions per second, which makes them a fitting choice for powering collaborative commercial projects like Socios. Additionally, all of Socios’ trading activity and voting results are securely and transparently stored on this sidechain rather than the main Ethereum network, which allows Chiliz to control the network’s gas costs and ensure quick and cost-effective transactions more easily.

The Chiliz PoA sidechain is also responsible for the smart contracts that are used to automatically execute the decisions resulting from Socios’ fan influence polls. The Socios platform serves as an oracle connecting the project’s permissioned sidechain to the main Ethereum network and is the only bridge that enables the exchange of CHZ and Fan Tokens.

Everyone’s a Winner With Chiliz and CHZ

Before the advent of blockchain technology, it was nearly impossible for the average sports fan to directly participate in the decision-making process for their favorite sports teams and organizations they follow. Chiliz’ innovative sports entertainment platform uses blockchain technology to convert passive spectators into active influencers and provides sports and esports organizations with exciting new ways to monetize audience engagement.

Chiliz’ growing roster of strategic partners and enterprise users has continued to swell, and by discretely applying blockchain technology to popular commercial pursuits, platforms like Socios and NBA Top Shot are adding a whole new dimension to the fan experience.

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