Chiliz Coin: The Crypto Fan Engagement Token
by Tom Nyarunda
Cryptocurrencies, one of today’s developing technological advancements borne of blockchain technology, are disrupting the financial space by augmenting traditional paper money and eventually aiming to replace fiat currency. However, newer crypto projects are designed with entirely different use cases, including movies, gaming, and sports. The cryptocurrency Chiliz (CHZ), described as a fan token, is one such digital asset creating a buzz around sports clubs. This guide dissects the Chiliz coin, its background, and how you can invest.
The mechanics of fan tokens
Let's begin by understanding the mechanics of the fan token concept before we dive deep into the details of the Chiliz coin project.
Fan tokens are blockchain-based crypto assets specifically designed for sports fans and entertainment. Take note, though, that fan tokens are not non-fungible tokens (NFTs), meaning they're fungible. As a result, they can be swapped with other sports club-related merchandise and team-specific benefits. Chiliz coin (CHZ) is a utility fan token built on the Chiliz blockchain.
Sports clubs issue fan tokens to their enthusiasts on digital platforms, which are validated on public blockchains. Fan tokens are the digital pass required to facilitate eligibility to earn membership benefits, vote on club decisions, and win prizes supporting the club you love to support.
Fans who own the tokens receive advantages like exclusive membership perks and other benefits like merchandise design and voting rights. Interested fans can buy and trade their digital token like other cryptocurrencies – you need CHZ tokens to conduct transactions and purchase tokens on the Chiliz platform.
What is the Chiliz coin?
Chiliz coin (CHZ) is a leading digital asset designed to support sports tokenization and is the native coin for www.chiliz.com, the world's pioneer sports fan engagement and rewards platform.
What's more, it's the trailblazer for sports-based cryptocurrency exchanges that allow fans to trade customized fan tokens besides participating in pools and club-based surveys. The token holders are also entitled to promotions and discounts besides being allowed to test their team and sports knowledge against each other and win prizes such as branded club merchandise. Chiliz coin (CHZ) owners have token rights relative to their holdings.
For participating clubs, Chiliz helps to solve challenges associated with funding and fan engagement. While the platform enables fans to become fractional shareholders of their favorite sports organizations and participate in the team's regular activities, it also facilitates access to sports and entertainment businesses.
Participating clubs have a chance to scale their business development plans offering them the potential to prosper and spread their wings globally.
## How Chiliz works
While most digital assets are designed to facilitate payments for goods and services or peer-to-peer cash transfers, Chiliz and its entire blockchain ecosystem are explicitly built to support the needs of sports clubs and their fans.
This makes it a game-changer in the fan token space. The CHZ token operated on the BNB Chain and Ethereum platforms for a while. However, it has since fully transitioned to the Chiliz blockchain, catering predominantly to sports and entertainment organizations and their fans.
The network utilizes the Proof of Authority (PoA) consensus mechanism. PoA is similar to the proof-of-stake consensus mechanism used by numerous staking platforms. The protocol differs from the other consensus algorithms as its processes rely on a few pre-approved validators.
Still, this one requires that validators are approved via a governance mechanism before they can begin validating transactions. At the same time, it may be less decentralized if it facilitates the platform to achieve efficiency and scalability.
The team that created Chiliz.com wished for a world where users directly influence their favorite sports teams via their organized votes. After successfully raising and getting listed on leading cryptocurrency exchanges, they used a significant amount to create the project’s reward and fan engagement app – Socios, in 2019. Several influential sports clubs have since joined the platform with the leading ones, including international ones like Paris Saint-Germain, FC Barcelona, and Atlético de Madrid.
## What is Socios?
Socios is an interactive digital platform built as a sidechain on the Chiliz infrastructure that the CHZ cryptocurrency runs on and which runs on the Ethereum blockchain.
Considered the platform's first consumer-facing product, Socios enables sports enthusiasts to engage with their teams and become eligible to receive exclusive rewards and benefits.
Participating sports teams also offer branded fan tokens on the Socios app, enabling token holders to participate in numerous decision-making activities. The platform uses smart contracts to store data to honor token holders' votes securely.
Moreover, users can also trade their tokens bought with the Chiliz coin on the Socios marketplace. The Socios app is also the digital wallet for fans' digital tokens and their CHZ tokens.
## How to buy Chiliz on Socios
When you buy a fan token using the Chiliz coin, the app converts them into ERC721 tokens, the standard for non-fungible tokens (NFTs). Afterward, you can still exchange the fan tokens and receive your CHZ tokens back.
Since the exchange process is only available on the Socios app, it's also the Chiliz exchange to buy Chiliz from. Nonetheless, you can still purchase CHZ from several other platforms, but all the trading is done on the app. Following is the process of buying CHZ on Socios:
Step 1: Download the Socios app on your smartphone.
Step 2: Enter your phone number to sign up – You'll receive an activation code from Socios.
Step 3: Enter the activation code, enter a user name and your email address to finish registration.
Step 4: Click "Wallet" and then "Chiliz".
Step 5: Click "Top Up" and enter the money you want to spend to buy CHZ tokens.
Once you've successfully bought your Chiliz coin, you can convert it into your favorite sports club's fan tokens or hold them in your wallet. US and UK-based token holders who need their CHZ tokens from their Socios apps must send them to another exchange as the app cannot be used in their countries yet. In that case, we will show you how to buy Chiliz tokens from a crypto exchange, using Binance as an example for our tutorial:
Step 1: Open a free account on Binance
You can choose between the company's website and the mobile app to sign up for a Binance account. You'll be required to verify your identity with a government-issued ID card and other personal information.
Step 2: Buy crypto using a credit card or a bank deposit
Binance offers several options for purchasing cryptocurrency, even though using a credit card would be the quickest. It’s also possible to transact via bank transfer or transfer your local fiat currency to the Binance app.
Step 3: Check your spot balance
Once you’ve purchased CHZ on Binance, look for your “spot” wallet, and you’ll see the amount you just bought displayed. After this, you can send CHZ to another entity using the “Withdraw” section. Alternatively, you could still convert your CHZ to your local currency via the trading section.
How to use Chiliz (CHZ) tokens
Different brands, celebrities, and sports organizations have partnered with Chiliz to facilitate engagement initiatives with their fans on the Chiliz platform.
Assuming you've already followed the steps above and wish to become an active participant, you need to exchange your CHZ with your club's fan tokens and enjoy access to exclusive member experiences, voting polls, or any other content offered by different sports organizations.
The Chiliz crypto is the official currency within the platform. Its scalability allows for fast, secure, and seamless transactions and access to experiences, plus exclusive merchandise and experiences reserved for fans. The technology behind Chiliz blockchain guarantees users transparency and robust security, ensuring fans a hassle-free way to engage with the brand they love and trust. Moreover, it's also possible to stake your CHZ tokens and earn even more rewards in the form of passive income.
How to stake Chiliz
Staking your Chiliz coin enables you to participate in the platform’s consensus process by locking your crypto token for a specified period. In return, stakers earn CHZ tokens as a reward for depositing their funds since they help to secure the network. The process for staking CHZ involves the following:
Step 1: Visit the Chiliz staking website - scoville-governance.chiliz.com.
Step 2: Link your digital wallet to the platform.
Step 3: Select a validator to delegate your CHZ to –this will increase the amount of the validator, allowing you to receive a portion of their reward relative to your contribution.
Step 4: Enter the amount of CHZ tokens you wish to stake and then press "Submit".
Step 5: Open your crypto wallet and verify the transaction to confirm your stake.
What is the future of Chiliz coin?
Chiliz has created a buzz in the sports and entertainment fans space, which is why the company has maintained strategic partnerships with numerous leading sporting brands and organizations globally.
While there's still some ground remaining for Chiliz to cover – some examples are building a fan token cross-chain bridge, finalizing smart contracts, and the Chiliz Chain Mainnet – the platform has shown every indication of a rewarding future ahead.
Moreover, the company’s website mentions several significant features in the coming days, from smart contract asset bridging to stablecoin support, to name a few. Should the platform accomplish any of these plans, it will increase its performance and make it much easier for fans and other stakeholders of the Chiliz ecosystem to thrive.
Is it worth investing in Chiliz coin?
First, you don't necessarily have to invest your Chiliz coin in any fan token. The price performance for CHZ has been impressive so far, meaning it has the potential to grow in the future, thereby making it worthwhile to consider staking.
The CHZ price movement seems directly dependent on the general market direction and the success of Socios.com. Since the network of Socios is expanding via new partnerships, and more fan tokens are hitting the market, we believe the future looks bright for Chiliz.
Tom is a freelance writer with over 15-years’ experience in content creation, blog writing, and SEO specializing in the blockchain and cryptocurrency niche. He is a philosophical figurehead who believes that to make our world a better place, we must invest in incorruptible products and procedures, of which Bitcoin and other cryptocurrencies are leading examples.