Adoption is one of the most important issues for crypto. For all projects and investments to reach their full potential, they need to reach everyone around the world. This is easier said than done, crypto is a difficult concept to penetrate. Chiles is using an interesting new approach to solve this, using sports.
Background
Socios is the company running the Chiliz blockchain and is based in Malta. The company aimed to take a strange approach to crypto adoption and opening up a new market for crypto, sports tokens. The funds for the project were raised in a private placement in 2018, no public sale was held. The following year, the company minted 8.888.888.888, or 8.888 billion tokens, in the Ethereum blockchain. What followed was Socios, which added more features to its ecosystem and introduced more teams to leverage its system of fans.
Network
The network is quite simple, it runs on Ethereum (also added to Binance Smart Chain and TRON) using smart contracts. The chain supports governance through a proof of authority protocol. This protocol allows approved nodes to validate transactions and create new blocks, essentially delegate proof of stake without any staking. This makes Chiliz a very centralized symbol, since all consensus is managed by Socios.
The ecosystem itself is built to allow easy adoption by the general public. There is no security risk due to their PoA system and all features and polls are publicly audited before any participation is allowed. The smart contracts and ecosystem are also approved by the software security company Certik.
Use cases
The biggest use in the Chilliz ecosystem is from their PoA side chain, which hosts fan tokens. Chiliz can be used to purchase fan tokens of their various supported clubs. Fan tokens allow users to have 1 vote for changes and polls on their respective team. This can range from selecting jersey colors, goal music or mottos. Great token holders can also enjoy VIP benefits that include merchandise or signature shirts. The goal is to allow passionate fans to get closer to their teams.
Chiliz today
Socios and Chiliz went pretty unnoticed until the beginning of this year when their popularity grew, most likely due to the partnership and launch with Binance. One of the most common tokens to be uploaded to the Binance Launchpad are Fan tokens. As their popularity grew, they also accelerated the acquisition of teams into their Fan Token program. Each new team paves the way for more adopters and provides another revenue stream for the Chiliz token. Very novel idea that will be interesting to see where it goes.
Professionals:
- A unique approach to adoption
- Use in the real world
Cons:
- Centralized
- Thin use case