In brief
Chiliz, the crypto startup behind fan token platform Socios, is launching a new blockchain platform.
Sports and entertainment brands can build alongside the firm on Chiliz Chain 2.0, which is rolling out its first testnet today.
Crypto startup Chiliz has defined the fan token market with its Socios platform, signing soccer giants like FC Barcelona, Paris Saint-Germain, and Juventus, plus the UFC, F1 teams, and esports clubs—over 130 partners in total. And Lionel Messi is the new face of the platform.
But the firm has larger ambitions beyond fan tokens, which is why Chiliz is developing a second-generation blockchain to let other sports and entertainment brands build all sorts of potential Web3 applications alongside Socios—from NFTs to games, DeFi apps, and more.
Today, the firm announced the launch of the first public testnet (Scoville) for Chiliz Chain 2.0, ahead of a planned mainnet rollout later in 2022. With Chiliz Chain 2.0, the firm will shift away from its current blockchain (forked from Ethereum) to a brand new one built on the technology of BNB Chain, the recently renamed Binance Smart Chain.
Chief Strategy Officer Max Rabinovitch told Decrypt that it was always Chiliz’s plan to expand from its initial fan token focus into a wider crypto ecosystem—to let IP holders and other builders tap into a broader platform powered by the CHZ token.
Socios.com was just the firm’s first product, he said, and they wanted to prove interest and utility in that space before going bigger. Rabinovitch described the fan token product as akin to “a big enough and scalable-enough proof-of-concept” for its grander plans to create a platform for sports and entertainment firms to build upon.
“We’re at a point now where we can realistically support—both as a business infrastructure and as a company with enough legitimacy and establishment—the initial and publicly-stated dream we had for the Chiliz Chain from day one,” he explained.
According to Chiliz Chief Technical Officer Thibaut Pelletier, Socios has bought nearly 1.5 million unique wallets into its fan token platform to date. Fan tokens offer a way for sports teams to connect with supporters, as they can provide benefits to holders such as fan votes on team decisions, exclusive events and giveaways, and more.
The broader fan token ecosystem generates billions of dollars’ worth of monthly trading volume, according to data from CryptoSlam, with over $3.3 billion in fan token trading over the past 30 days.
The largest listed fan token, Socios’ Manchester City F.C. (CITY) token, has a market cap of over $58 million, according to CoinMarketCap.
Socios will continue working directly with sports teams to launch tokens on Chiliz Chain 2.0, but brands and IP holders can also choose to build their own apps and services instead, or as well.
What is Chiliz Chain 2.0?
Companies could use the platform to mint NFT collectibles, deploy play-to-earn games, or even launch their own fan token initiatives independently of Socios. They could also develop DeFi applications, loyalty programs, and more.
It will all be built around the existing CHZ token, which will be bridged to the new chain. Giving that token real utility is one of the key reasons why Chiliz is building this platform.
Currently, CHZ is used to purchase fan tokens, and Rabinovitch said it’s “essentially… an in-game currency” in its current form.
But on Chiliz Chain 2.0, the token can fuel a potentially broad array of sports and entertainment apps, and incentivize holders with features like token staking on the proof-of-stake authority (PoSA) network. Pelletier said that longtime CHZ holders would have ways to “be rewarded for their loyalty” on the new blockchain.
BNB Chain is Ethereum Virtual Machine (EVM) compatible, but it offers significantly lower transaction fees than Ethereum and increased transaction throughput. That could unlock a greater variety of apps and experiences as builders tap into the Chiliz ecosystem without towering fees and sluggish transaction confirmations.
Pelletier said that Chiliz didn’t have any real need to build its blockchain from scratch and that BNB Chain’s tech ultimately met its requirements. He also pointed to the opportunity to work closely with Web3 infrastructure provider Ankr, which is deeply entrenched in the BNB Chain ecosystem, to bring this new chain to life.
Ultimately, Rabinovitch said that the hook for firms to choose Chiliz Chain 2.0 isn’t unique or bespoke technology but rather the ability to build alongside Chiliz and as-yet-unannounced sports and entertainment brands to develop a premier crypto ecosystem for those industries.
“It’s important that these guys feel like, ‘Well, I want to build here because that’s where sports and entertainment Web3 solutions are getting built,'” said Rabinovitch, who added that builders can feel comfortable developing within a “curated ecosystem” with like-minded firms.
As that last comment suggests, Chiliz Chain 2.0 won’t be wide open to all creators.
The platform will have a whitelisting process that brands and IP holders can go through to be approved for access. From there, they’re free to create whatever they’d like. Network validators will vote on which parties are approved to build on Chiliz Chain 2.0.
Having a barrier to entry might be “a little bit cumbersome,” Pelletier admitted, but that’s intentional: Chiliz wants to ensure that creators on the platform are verified and trustworthy so that there isn’t any “scammy tokenization” on Chiliz Chain 2.0.
Chiliz testnet now live
Today’s launch of the Scoville testnet is the first step toward rolling out Chiliz Chain 2.0, and Pelletier estimated that it could be approximately six months before the mainnet launch.
Even then, bridging existing assets—from Socios fan tokens to CHZ—to the new chain could take some time, although he believes that lower fees will be a “big incentive” for holders to make the move.
Rabinovitch said that he’s most excited to see the floodgates open and for other entities to start building on Chiliz Chain 2.0. It’s been planned for a long time, but once another large-scale project launches that isn’t Socios, he said, it can start to feel like a proper ecosystem—rather than a single fan token product.
“Our big vision is: We want to make this an extremely liquid and active chain,” he said, “and have hundreds and hundreds of folks developing on it in the service of music, film, sports, etc.”
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Source: https://decrypt.co/96508/chiliz-plots-sports-entertainment-crypto-ecosystem-with-2-0-chain
