While Chiliz (CHZ -2.88%) ranks as a top-50 crypto by total market capitalization, chances are that most crypto investors have never heard of it. The first time someone mentioned Chiliz to me, I thought they were talking about the restaurant chain. And yet this relatively unknown crypto has been picking up serious momentum of late. Over the past month, Chiliz is up more than 100% (as of last week).
Chiliz is a crypto token that powers fan engagement. To do this, it partners with top sports teams around the world. When fans purchase fan tokens trading on the Socios.com fan engagement platform (which sits on top of the Chiliz blockchain), they can have a voice in the decisions of their favorite sports teams or gain access to special VIP events. Understandably, sports fanatics are going crazy right now over Chiliz.
The world of fan tokens
The first reason Chiliz is unique is that it has pioneered the use of fan tokens. Each fan token enables the holder to gain access, benefits, or perks. For example, you might gain access to a private VIP event or the right to vote on a team-related issue. In one case, fans were able to vote on the mural to be painted in a team's locker room, and then one lucky winner had the opportunity to meet the team there. If you're a sports fan, Chiliz has real-world utility. And it gives holders these opportunities in a way that is seamlessly integrated with the websites and apps of sports teams via its Socios.com platform.
Image source: Getty Images.
Chiliz has already partnered with the likes of FC Barcelona and AC Milan, both of which have rabid fan bases around the world. Overall, Chiliz has inked more than 145 partnerships with sports teams in a variety of different sports (including F1, esports, and cricket). Since the blockchain development team for Chiliz is based in Europe, it makes sense that the initial focus has been on European sports teams. But Chiliz has also partnered with high-profile sports teams within the NBA, NFL, and NHL.
Scalability
For Chiliz, the concept of crypto tokens for sports fans offers nearly limitless scalability. Once it partners with one sports team, for example, it becomes relatively easy to partner with every other team in the same league. U.S. sports leagues keep talking about expanding internationally, and using the Chiliz fan token could be one way to do this. When the NFL plays football games in London, for example, it could use Chiliz fan tokens to create unique VIP experiences for our friends across the pond.
Until recently, scalability has been limited by the fact that Chiliz was built on the Ethereum (ETH -0.71%) blockchain. This meant high transaction fees and lots of congestion on the blockchain. But Chiliz is moving to a brand-new blockchain called Chiliz Chain 2.0, which will make Chiliz much more scalable, as well as cheaper and easier to use. As a result, Chiliz is calling on developers to create new decentralized applications for the brand-new blockchain upgrade. And the Chiliz development team now refers to itself as "the world's leading blockchain fintech provider for sports and entertainment."
That last part -- "and entertainment" -- is very interesting. It suggests that the Chiliz blockchain might be used to create fan tokens for almost any industry with star appeal. What about fan tokens for foodies and their favorite chefs and restaurants? Or fan tokens for entertainment projects, like movies? Or fan tokens for (ahem) writers and journalists?
Should I buy Chiliz now?
The Chiliz crypto appeared on my investment radar almost by accident, and I'm glad it did. I was simply looking for altcoins that had popped by more than 100% recently, and Chiliz kept making the list. Learning more about why Chiliz has been successful has taught me a lot about what is working right now in the world of crypto. Chiliz has figured out how to leverage passionate fan communities and unite them around crypto.
In some ways, Chiliz reminds me of ApeCoin (APE 4.82%), which has been trying to create online fan communities around digital images of Bored Apes. Obviously, Chiliz has much more mainstream appeal. Moreover, it has a lot more to offer in terms of utility and worldwide appeal. I'm bullish on Chiliz, especially at its bargain-basement price right now. The next time I watch a sports game, I'm going to be checking on whether Chiliz is part of the action.
