The Socios.com ecosystem is taking a breather in this tense time in the cryptocurrency market. Following announcements of listing on a new exchange, token burns and the move to phase 2 of the Chiliz testnet, fan tokens have printed significant increases in the early part of the week.
Fan tokens are on the rise again
In an atmosphere of capitulation in the cryptocurrency market, exacerbated by the Terra (LUNA) affair as well as the geopolitical and macroeconomic context, green curves are scarce and to see a few is a real relief.
At the beginning of this week, sports fans could breathe a sigh of relief as their fan tokens led a bullish rally and appreciated by several tens of percent. For example, the Paris Saint-Germain Fan Token (PSG) has climbed almost 150% since Monday night, from $5 to over $12, before stabilizing around $10.
Performance of the main fan tokens – as of Thursday 19 May, 07:45
In a nutshell, fan tokens are digital tokens designed to monetise the fervour of sports fans. They were invented and democratized by the company Socios.com, which has been able to forge partnerships with some of the biggest names in world sports: the Alpine team in Formula 1, Paris Saint-Germain, FC Barcelona, and many others.
Chiliz announces phase 2 of its testnet
One of the main reasons for the sudden rise in fan token prices is the recent announcements from Chiliz (CHZ), the protocol on which Socios.com is based. The CHZ token is the real fuel for the platform, as it serves as a currency for sports fans to acquire fan tokens.
On Tuesday 17 May, Chiliz revealed the launch of Jalapeno, the second phase of its testnet called “Scoville”. This is part of the platform’s transition to its mainnet, the Chiliz Chain 2.0, scheduled for the end of 2022.
– JALAPENO starts! ️
✅ DEX: PepperSwap
✅ Fan Token Test Surveys⚡️ $CHZ pic.twitter.com/eqXPk1HeIT
– Chiliz ($CHZ) – Powering Socios.com ⚡ (@Chiliz) May 17, 2022
Among the main novelties that will be experimented during this second phase, the first is the launch of PepperSwap, which will be the first decentralised exchange in the ecosystem. In addition, and this is certainly what created the craze, the possibility of participating in polls and club governance votes by holding fan tokens.
Indeed, in addition to providing access to unique and exclusive experiences, the real value proposition of Socios.com and Chiliz lies in the ability to get sports fans to interact with their favourite clubs, notably by participating in decision making.
Good news for fan tokens
These exciting developments in the Chiliz ecosystem have been accompanied by some good news specific to each fan token. This Wednesday, May 18, the BitPanda exchange platform announced the listing of a handful of them, including Paris Saint-Germain.
In addition, Chiliz has a special token burn mechanism that allows it to destroy some of the fan tokens in circulation and thus put upward pressure on them. Known as “Head2Head”, this mechanism is based on the real results of confrontations between two clubs
Head2Head Burn
Fan Tokens will be burned for every goal scored during @juventusfc vs @inter at 21:00 CEST today
1 x $JUV, $INTER goal = 2,000 Fan Tokens
1 x $JUV, $INTER win = 4,000 Fan Tokens
⚡$CHZ pic.twitter.com/c4ugx2xM8B
– Chiliz ($CHZ) – Powering Socios.com ⚡ (@Chiliz) May 11, 2022
For example, on 11 May, Inter Milan faced Juventus in the Italian Cup final. For this match, Chiliz introduced the following burn process: 2000 fan tokens would be destroyed for each goal and 4000 for the winning team.
Logically enough, this mechanism rewards the best performing teams and consequently, the fans who invested in their fan tokens.
