Chiliz has announced the release of the next phase of its development with the launch of Tokenomics 2.0. It noted that although the Chiliz token started as a simple transactional token, it has grown into the cornerstone of the ecosystem, serving dual roles as the governance and gas token.
Additionally, French club, Paris Saint-German has become a node validator on the Chiliz protocol. This makes the Football Club the latest sports organization to join the Chiliz ecosystem as a validator after the Korean League.
PSG has stated that any earnings received from serving as a validator will be dedicated to repurchasing $PSG Fan Tokens. This shows their commitment to combining sports and blockchain technology via its fan token system.
Chiliz and socios.com
Chiliz is the company behind the fan engagement platform Socios and the CHZ token. Socios allows sports and entertainment fans to connect with their favorite teams, leagues, artists, and franchises.
The platform lets fans purchase branded NFTs that connect them to their favorite creators and sports clubs. The said NFTs can only be purchased with CHZ tokens and offer fans unique experiences with their beloved team, branded merchandise, and an opportunity to influence their favorite teams’ decisions by voting in polls on the Socios platform.
In August 2023, Chiliz Labs announced a strategic partnership with Crypto Blockchain Industries (CBI) to revolutionize football entertainment. The partnership aimed to create a new utility for Fan Token holders on Chiliz’s fan engagement and rewards app Socios.com.
They would be able to play games and compete within the FAV universe and access exclusive benefits, including digital merch and prizes. $FAV Tokens would also be paired against certain Fan Tokens.
Tokenomics 2.0
The new tokenomics model of the CHiliz token features a gradually decreasing annual inflation rate and a perpetual token burn mechanism.
Chiliz observed limitations in creating long-term incentives for the community and encouraging broader participation in governance and security within the original tokenomics framework.
The upgrade tackles these challenges by aligning Chiliz with the global economic strategies used by leading Layer 1 protocols. As part of the changes, Chilis said that there will be an initial annual base inflation of 8.80%.
Over time, the protocol will experience a decreasing inflationary decay through a formula. After 14 years, there will be an annual inflation stagnation (inflation floor) of 1.88%.
Additionally, the upgrade includes the implementation of a transaction fee-burning mechanism, where the majority of collected gas fees will be burned at the protocol level.
It added that part of the benefits include incentivizing community participation with higher rewards, fostering more sustainable growth for the Chiliz Chain ecosystem, creating additional opportunities for DeFi building within the ecosystem, and securing long-term funding for the entire Chiliz Chain network.
