BLOCKCHAIN, THE FUTURE OF FAN COMMUNITIES, AND THE FUTURE OF CHILIZ CHAIN 2.0

CHILIZ IS DELIGHTED TO WELCOME LIVELIKE AS THE FIRST TECH COMPANY TO JOIN CHILIZ CHAIN 2.0 — THIS IS THE NEXT STEP IN THE DEVELOPMENT OF CHILIZ CHAIN 2.0 AS THE BLOCKCHAIN OF CHOICE FOR THE SPORTS & ENTERTAINMENT INDUSTRIES & BEYOND

By Max Rabinovitch, Chief Strategy Officer, Chiliz and Socios.com

As blockchain, web 3.0, and crypto continue to dominate the news cycle, we are experiencing a high volume of incoming interest from large media production studios and broadcasters to look at TV/ Film structured versions for Fan Token membership ecosystems, both on a whitelabel basis for single IPs and to become part of a unified web 3.0 media ecosystem much like Socios.com is for sports.

Now more than ever we are being asked: “We know we need web 3.0 in order to compete for fans and keep them — but what does that look like and what can I do?”

The power of token-gating fan communities isn’t just in the revenue opportunities it brings, but in the two way relationship that it delivers between fans and the object of their loyalty. In a media landscape that is fragmented and saturated, where every brand and organization is competing with digital entertainment across multiple channels, token-gated fan communities not only offer the opportunity to recognise and reward that engagement and loyalty, but it also provides an opportunity to provide a key and gateway to organizations other channels.

In essence, anything can be tokenized. Whether it’s sports, entertainment, FMCG, major brands and companies are all actively striving to get there. As the leading provider of blockchain for sports and entertainment Chiliz can be a key partner to any brand or organization that is looking to build its digital engagement with its community of fans, users, or consumers. At the end of the day, Chiliz is first and foremost a tech company, a protocol and fintech technology provider for the sports and entertainment industries, and we are here to help.

Right now, Fan Tokens give their owners team-based utility — access to games, rewards, prizes and experiences. It’s not our business to make brand versions of Fan Tokens that don’t sit within the Socios.com ecosystem, but we can provide the technology to provide these brands and companies with connected services to sports and entertainment entities.

In March 2022, we announced the creation of a public testnet for Chiliz Chain 2.0 (CC2), the first Layer-1 blockchain created especially for the sports and entertainment industries. CC2 will enable sports and entertainment brands to mint NFTs and Fan Tokens, build DeFi products and Play2Earn games, as well as create event, loyalty and merchandising programs, helping to unlock the huge potential of Web 3.0.

Socios.com was the first of many different products we will eventually service — the first of infinite Layer 2 solutions built on top of it, the vast majority of which will not be developed or managed by Chiliz.

While the Socios.com global app, and the US version, will eventually migrate to CC2, our mission is for it to become the central blockchain tech foundation for the sports and entertainment industries — the blockchain of choice for stakeholders eager to develop Web 3.0 products and platforms.

Socios.com Fan Tokens are already evolving into a tokenized membership / loyalty scheme, where the more you engage, the more you will be rewarded. Fan Tokens will grow outside the Socios.com environment, transforming into an all-access Web 3.0 membership pass for fans of a given team. Socios.com is the ‘home’ where teams engage and reward token holders, but the value of the membership translates to anywhere you move your Fan Token in the future, whether it be club online shops, or club partners for gameday service discounts as an example.

Fan Tokens will sit at the epicenter of the sports and entertainment ecosystem. Wherever you interact — whether it’s on social media platforms, retail stores, team apps etc — you can be rewarded or your Fan Token can ‘unlock’ numerous benefits. With token-gating for example, your Fan Token could unlock discounts, exclusive content or secure your place to be first in line to buy new merchandise, with the Fan Tokens effectively acting as a form of access control — a set of keys that reside in a user’s digital wallet — that are linked to a specific smart contract. The ultimate, fully-connected membership scheme, where you use your digital wallet to verify that you actually meet the digital requirements.

Welcome LiveLike to Chiliz Chain 2.0!

Part of the rollout of the Chiliz Chain 2.0 is the creation of Chiliz Labs, an incubator/ accelerator for stakeholders who wish to develop products on CC2 which will directly leverage the adoption of Fan Tokens. Our open ecosystem will enable vetted third party Web 3.0 app developers to create additional experiences which feature Fan Token plug-ins that are built in collaboration with but independently of Socios.com and the Socios.com team. Some projects will build on the Socios.com community and Fan Tokens as an asset class; some will create externalized uses for existing Fan Tokens and design new experiences across new verticals that go beyond Fan Tokens and focus on other digital asset classes. Others will leverage our protocol solution to build new and/ or unrelated offerings.

We are delighted to announce that LiveLike, a specialist in real time fan engagement and retention solutions, has become the first company to be on-boarded to Chiliz Chain 2.0.

We are super excited to have LiveLike join the Chiliz Chain, and there is an exciting opportunity for other service providers and tech solution specialists like LiveLike to build projects that add utility and enhance the engagement opportunities for Socios.com Fan Token communities.

LiveLike will become the first company to develop its blockchain and Web 3.0 projects directly on the Chiliz blockchain, receiving a grant to fund development as part of the Chiliz Lab initiative. Initially LiveLike will focus on developing an add-on utility for Socios.com Fan Tokens, allowing LiveLike’s fan engagement and retention tools to be available through Fan Token team’s native apps and environments. This will provide a new ecosystem for our team’s Fan Tokens, providing additional utility outside of the Socios.com platform.

We have chosen to partner with LiveLike because of our shared vision and values, and we believe that their approach to Web 3.0, along with their technology and business model, nicely complements ours. LiveLike has earned a strong reputation from having worked with some of the leading sports and media groups in the world — from Canal+, Sky Group and WarnerMedia, to NASCAR, Madison Square Garden Networks and the NBA, — to build new fan loyalty experiences around live sports. LiveLike powers communal and interactive capabilities not only for sports audiences but has also built traction by delivering engagement and gamification solutions for its fintech, entertainment, news, live events and e-commerce partners.

Personally, I am super excited about working with LiveLike as we develop these projects. Over the coming weeks, LiveLike Co-founder and CEO Miheer Walavalkar and I will be speaking to the blockchain community in more detail about these projects and the massive potential for blockchain to enhance the fan engagement and retention opportunities for organizations in sports, entertainment, and beyond.

The future of the CHZ token is not necessarily as the in-app currency or transactional layer of Socios.com, the role of CHZ will expand to a more sustainable place as the network enabler / governance token and native currency of the open, multi-vertical CC2 ecosystem.

When users transact on a blockchain, they pay ‘gas fees’. Just like the Swift fees that you would pay to move money between bank accounts, gas fees are the payments users make to complete a transaction on a blockchain. These fees are used to compensate blockchain validators for the computing power they have to use to verify blockchain transactions. As and when transactions on the blockchain are initiated, they are queued on the network for subsequent validation. Validator nodes batch individual transactions into a block to verify. When the block has been completed, validators process it and add it to the blockchain as a permanent record. Validators secure the network and take a share in the fees generated by users on the network.

CHZ will be the native currency powering transactions for any project built on CC2, not just Socios.com. CHZ will be used as the ‘gas fee’ currency when conducting any transaction on CC2. A PoSA (Proof of Stake Authority) model will enable all approved stakeholders to become node operators and benefit from continued adoption of the network.

Anyone who seeks to be a validator on CC2 will need to stake a prerequisite amount of CHZ within a node in order to do so. In the future, the CC2 nodes/validators will be some of the biggest consumer-facing brands in the world, a blockchain-powered network run by super fans, sports teams as well as ecommerce partners.

Our recent deal with FC Barcelona to become a strategic partner in Barça Studios to accelerate the club’s blockchain, NFT, digital asset and Web 3.0 strategies is a great example of this in practice. While it may sound far-fetched to imagine Barcelona generating revenues as a blockchain node/validator, the reality is not too far away. Barça Studios (to be re-named Barça Digital Entertainment) is spearheading FC Barcelona’s digital strategy to deliver projects that engage, reward and build connections with its 400m+ global audience. Barça’s Fan Token, $39m of which have already been sold, will be key to unlocking and creating opportunities that extend beyond the Socios.com app and into new, immersive digital ecosystems powered by Chiliz technology, and providing a way to generate a true direct-to-consumer product that can drive real revenues. The Barça Fan Token will be at the epicenter of the FC Barcelona world, connected via Socios.com digital wallet and unlocking benefits in and out of the Socios.com ecosystem. And it all started with a Fan Token.

Beyond the possibilities with existing sports partners, incoming interest from major entertainment brands to connect to CC2 is centered around the development of quick-integration solutions and more feature-rich environments. Such as around ticketing, standalone engagement ecosystems for large IP, and utility-extending complimentary ecosystems for existing Fan Token memberships — where Fan Tokens find another ecosystem with utility.