What fan coins are needed for and what events contribute to their growth

​What is CHZ. What fan tokens are growing before the World Cup

16.11.2022

2225

5 min

The approach of the World Cup in Qatar coincided with the rise in the price of so-called fan tokens, the leader among which was the token of the Socios platform, Chiliz (CHZ). At the end of October, its price rose by more than 20% in just one week, and after the collapse of the entire crypto market after the bankruptcy of the FTX exchange, the cryptocurrency’s rate is rapidly recovering.

What are fan tokens

Fan tokens are cryptocurrencies for fans of sports teams, music groups, or any other celebrities. Owners of such assets usually receive special privileges, such as access to exclusive content, the ability to vote for the future development of their favorite club or band, and discounts on tickets and gifts. The fan token of Paris Saint-Germain FC allows the holder access to the club’s VIP services, as well as seasonal bonuses, such as the opportunity to vote for the cover of the fan edition of the football video game FIFA 22.

Almost all popular football teams have their own cryptocurrencies, and the token of FC Barcelona was even listed in the Guinness World Records as “the most valuable fan token.” FC Barcelona, Inter Milan, Manchester City, and other teams have created their own tokens. Teams in the NBA and NHL leagues, as well as participants in the Formula 1 tournament, also issue their own tokens.

How fan tokens are issued

Chiliz is the native token of the Socios platform for the distribution of fan tokens. The service has direct partnership agreements with famous football clubs, and Lionel Messi became its ambassador. The platform issues most “football” coins, including those from the clubs “Barcelona” and “Madrid,” as well as tokens of the mixed martial arts organization UFC.

Coins on Socios are created under the ERC-20 standard, so they are compatible with the Ethereum (ETH) blockchain and its sidechains. Fan tokens on the platform can be purchased for Chiliz, which, in turn, can be purchased in the service’s app.

To issue their own fan tokens, representatives of sports teams submit an application and, if approved, send CHZ tokens to the platform’s “vault” for 4 months. After this period and unlocking, they can be exchanged for their team’s tokens.

On November 9, the project launched its own blockchain Chiliz Chain 2.0, capable of processing more transactions and backward compatible with the Ethereum virtual environment. Chiliz Chain runs on its own proof-of-staked-authority (PoSA) algorithm optimized for platform operation and token staking.

Socios CEO Alexandre Dreyfus writes on Twitter that fan tokens are much more scalable and useful from a Web 3.0 perspective for the sports industry than NFTs as we know them today.

He also noted that the role of sports fans these days is much different from past times. Socios’ target audience includes the 99% of fans who cannot attend a game at the stadium, Dreyfus explained.

The advantage of Socios is the ability to make the purchased coins function directly through the service’s app. They can be used to receive holder bonuses or to participate in surveys.

The growth of fan coins

According to CoinGecko, as of November 16, there are more than 60 fan tokens and their total capitalization is $359 million.

Despite the collapse of the crypto market, which was facilitated by the collapse of the FTX exchange, the token of Lazio FC (LAZIO) rose by more than 30% in 24 hours to $8,28 on November 16, with its capitalization at $53,9 million.

The fan token platform on the Binance exchange

Source: Binance.com

Santos, the second-largest fan token by market capitalization, is also showing growth. The coin has risen in price by 15% in 24 hours and is trading at $9,5. The fan token of Porto FC has risen in price by 25% in 24 hours, reaching a price of $5,08.

The capitalization of CHZ is $1,4 billion. In this, over the past 14 days, its rate has increased by 20,4% to $0,22. Even after the recent market drawdown, the asset quickly began to recover its performance.

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