Author: @0xMavWisdom

（We have no partnership or sponsorship with the projects mentioned in this article and do not provide financial advice）

As the World Cup approaches, Chiliz token CHZ, a blockchain fintech project that focuses on the sports circuit, has bucked the trend of rising in the crypto winter, showing a bright performance. According to CoinMarketCap, CHZ has recently reached a high of 2.9 USD since its low of 0.8 USD in June, a rise of over 300%. Soccer fan tokens such as POR (Portugal) and ARG (Argentina), which are highly correlated with CHZ, are also doing well. The Qatar World Cup organizing committee expects that between 3 and 4 billion fans worldwide, half of the world's population, will watch the World Cup in various ways this year. The huge influence is expected to make many soccer-related fan tokens warm up in advance. As the leading fan token platform, Chiliz and the related soccer fan economy are naturally receiving a lot of attention from the market.

CHZ has a total volume cap of 8.888 billion, with approximately 6.01 billion in circulation. Its main uses include (1) as a medium of exchange on the Socios.com platform, where users use CHZ to participate in team FTO (fan token offerings) and purchase favorite team fan tokens and NFTs; (2) as a native token for Chiliz Chain 2.0, which will have network fee payments, CHZ staking, governance, and other PoS network native token features. According to Messari research, CHZ also contains destruction mechanisms: (1) 20% of the net transaction fees charged by the Chiliz.net exchange; (2) 10% of the net proceeds from fan token issuance; and (3) 20% of the net proceeds from NFTs issued by Chiliz.

Kevin Kelly, the founding editor-in-chief of Wired magazine, once proposed the 1,000 hardcore fans theory - that you only need 1,000 fans to support your family; preferably your most hardcore loyal fans, to be exact. This theory holds true in the world of sports, where fans have always contributed the majority of a team's revenue, and hardcore fans are at the top of the list. They will travel across the country to support the home team on the road, buy home membership season tickets or buy celebrity peripherals to support the team. As the number one sport in the world, the soccer market is undoubtedly the largest share of the sports fan market, and Chiliz, which has partnered with a number of traditional soccer giants such as AC Milan (ACM), Atletico Madrid (ATM) and Barcelona (BAR), has the advantage of gaining massive soccer fan support on the blockchain.

In the fourth quarter of this year, the upgrade of Chiliz Chain 2.0 turned Chiliz from a single platform to an ecological public chain, but Chiliz is more like a Web2.5 product than other cryptocurrencies. Chiliz needs more resources such as star or team partnerships, just like the hotter sports blockchain projects like NBA Top Shot. For fans, the good or bad blockchain technology is secondary to the sought-after team or star effect. Therefore, for the team of fan tokens, the key is to weaken the professional concept of blockchain and make the fan community deeply bound to the tokens in the long run. In 2021, Lionel Messi joined Paris Saint-Germain, and the double-issued salary contract agreed that the club would pay part of Messi's salary with the fan token PSG. Lionel Messi's "carryover" has brought fan tokens to the public. According to the official website of Chiliz, 58% of Chiliz funds are used for operation, among which some are used to reach long-term partnership with stars and teams, and "breaking the circle" to attract the participation of loyal fans of teams outside the crypto circle is also one of the directions of Chiliz construction.

Socios.com, the fan incentive platform created by Chiliz, is designed to facilitate the interactive connection between fans and teams. Loyal fans can purchase their favorite team's fan tokens with CHZ on Socios.com, and CHZ holders can purchase the latest fan tokens at Socios.com's FTO (Fan Token Offering), where loyal fans can be the first to purchase their favorite team's fan tokens. According to Alex Dreyfus, CEO of Chiliz, the main goal of the fan tokens is to increase fan engagement, with fans' respective club token holders having voting rights. Through Socios.com, fans, i.e. club fan token holders, can participate in decisions on team matters, such as the new celebration song for Juventus (JUV), the design of the captain's armband for Paris Saint-Germain (PSG) and the renaming of the training ground for Roma (ASR), as well as VIP privileges such as discounts in the fan store, visits to the players' area in the stadium and interaction with players, creating a bridge between the team and the fans that makes the fans and the team closer. However, holders have governance rights over some team management details, but generally have limited decision-making power, such as in major matters like coaching staff and player selection in the transfer market, which are still in the hands of team executives.

At present, fan tokens are still dominated by short-term speculation, and long-term investment value is missing. The token price fluctuation will be affected by the team's status, transfer situation, and short-term results, and the logic of individual fan tokens rise and fall depends more on the fans' emotions towards the team.

Last year, CHZ, which reflects the soccer fan token market, was hyped up six months before the start of the tournament in anticipation of the Euros, but before the Euros proper, CHZ flamed out along with most fan tokens, and the coin price performed average even during the more intense knockout rounds of the Euros. As a global feast, the World Cup will absorb countless new viewers in just one month, and these viewers will buy the national team fan or the club fan tokens of the corresponding country for speculation if they are optimistic about the World Cup team. While a small percentage of viewers will eventually become long-term fans, many more are spectators who will stop paying attention to soccer after the World Cup, so fan tokens mostly face a short holding period for investors and will be sold before the end of the tournament.

But no matter what, as the world's number one sport, soccer still has the world's number one popularity even if we put aside the big tournaments. Although soccer games like FIFA and Football Manger are criticized every year as "skinned games", they still sell well when they are launched, which reflects the hotness of the soccer fan circle. Backed by the number one sport and the world's largest sports fan ecosystem, Chiliz still has the imagination to create new games such as player card NFT at this stage and expand the market with a large fan base in North and South America, plus the attribute of crypto circles catering to young people and chasing trends.

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