On 6 December 2019, our CMO Sean had a Live AMA session with Chiliz CEO Alex on Crypto.com's Official Telegram Channel.
Sean: Welcome, Alex! Great to meet you in Singapore last month (on the day of your listing on Crypto.com)! Got some great questions for you. But to start, can you briefly introduce the Chiliz project?
Alex: And was cool to meet you IRL in Singapore a few weeks ago. Okay, let me start with who we are and what we do.
Our token $CHZ / Chiliz, is a blockchain venture based in Malta, where we have 50+ employees there and 60+ total with 24 nationalities. We raised $60m in private placement last year, mainly in Asia.
What we do is pretty simple. We are 'tokenizing' some of the biggest sports teams in the world. What does it mean? it means we have created a platform where you and I can buy tokens of the football teams, not as an NFT or collectibles, but as a stake or vesting interest to VOTE and INFLUENCE the club. For example, we just released this: https://www.juventus.com/en/news/news/2019/socioscom-choose-the-juventus-goal-celebration-song.php
Juventus is asking THEIR fans to buy/use the Juventus token (on the $CHZ platform called Socios.com) to vote and have a BINDING decision, thanks to the vote.
In a few words, what we do is giving a voice to the 99.99% of fans that are NOT in the stadium. Nowadays, sports is a global entertainment product with global audience, and most of fans are NOT in the city/country of the team they support. So with the clubs, we decided to create a way to engage their fans globally, by giving them a voice. We use blockchain, to create their "Fan Tokens", which are ERC20 on our Permission Chain at this stage.And these Fan Tokens, are like a "License to vote" or Stake in the voting process. Of course, you can't decide if you want to fire Ronaldo, but who would?
We've sign not only Juventus, but also Paris Saint-Germain, AS Roma, West Ham, Galatasaray, Atletico Madrid but also the DOTA2 champion OG, and soon we will announce more teams from Latin America, Middle East, Europe and also new sports from North America or Asia. We are a fan transactional platform fans <> fans or fans <> clubs. all powered by $CHZ token.
Sean: Awesome!!! Thanks for that introduction, Alex. Sounds like a great team and love what you are doing (speaking as a sports fan). Great stuff! Now, let's jump into the Q&A session.
Q1. What is the use case of CHZ? Can it be used outside of Chiliz Platform?
Alex: That's the trillion dollar question. Our use case is very easy actually. $CHZ is the fuel of the platform(s) we are running for now. So you need $CHZ to buy/trade your $JUV, $PSG, $ROM, etc… Everything we built is around $CHZ. We want it to become the currency/utility token that will be used by major sports & entertainment brands, all over the world.
And because users gets $CHZ, eventually we gonna have more and more platforms outside of Socios.com, that will use $CHZ too ,because of the adoption. Let's say in 12 months, we get our first million users (which is our target). These users will be exposed to $CHZ as a brand, will have their wallet with Socios.com, etc… Then can now spend these $CHZ on other platforms that will be connected to our ecosystem. Maybe we become the "bitcoin for dummies" as known as mainstream.
Q2. What’s the Business Model for CHZ?
Alex: Oh, I like this question. Because I really wonder how many blockchain companies have a business model actually. We are lucky we have one. We are a transactional platform. In a way, we are an exchange/marketplace, where fans/users are trading their teams tokens (voting, power and more). So like any exchange or marketplace, we take a commission between users. So when a user buy a $JUV during the Fan Token Offering (FTO) - that is happening now - we take a commission, which becomes our revenue. When a user buy/sell/trade $JUV against $CHZ to another fan (end of Q1), we take a commission too. So technically, the more users, the less $CHZ. That's why we are signing more and more teams, content, IPs, etc ... it is to reach a global mass scale of users using $CHZ.
Q3. As we met at the Binance Super Meet Up, your current partnership with Binance, do you plan to deepen that?
Alex: Let me text CZ if I can disclose. (waiting…) Ok, he responded. Careful what you wish for.
Q4. 1) When will socios start trading? 2) Will the token hunt for other fans token hunt? 3) Are you planning to make a deal with other Turkish teams?
Alex: 1/ Probably when the Socios.com platform will allow trading of $JUV and the 6/7/8/10 or more teams we will have on the ecosystem. It's planned end of Q1, once all the Fan Token Offering will have started. Launching it today, wouldn't make any sense, need to have few pairs available.
2/ yes, Token Hunt (our PokemonGO AR airdrop kind of stuff) will be available for PSG, Atletico Madrid, and all our teams. Actually, we are working on some very cool partnerships with retail brands (sportswear, telecom, etc...) that are sponsors of the teams and want to use this to send traffic to their shops.
3/ Oh yes.
Q5. Will you plan to burn any of your tokens?
Alex: That's another key question. Token velocity. I'm going to be a bit harsh on this one. I do believe that most of staking/burning model in current blockchain space are scam. We believe that to burn or stake tokens, it has to be connected to a BUSINESS MODEL that works. Therefore, we announced already that we will have a "Chiliz 2.0" token velocity model once the first Fan Token Offerings will be completed, because we will be able to actually make decisions on educated information, rather than nothing. We want to improve our token velocity, but there is no hurry. It can wait end of Q1, once we have really started our commercial launch and we get real business.
Q6. Are the voting results stored in a transparent manner on the blockchain?
Alex: Yes! A useful case of blockchain - https://explorer.chiliz.com/tokens/0x14a5750b0e54b57d12767b84a326c9fe59472da5/token_transfers
Here you can see all the Juventus token transfer for example and the green ones : https://explorer.chiliz.com/txs are voting. So all the voting and transactions are transparent. That's actually our point. We are selling to fans, the fact tat they can vote on decisions and that vote is binding, we need to ensure transparency and fairness. Hench Blockchain.
Q7. Can you elaborate more on the transaction fees on your platform
Alex: I guess you refer to the fact that wse take fees, when you buy CHZ or JUV or whatever. Well, yes, we need to pay our employees, so we need to make revenue, so we need to take fees. Like crypto.com (I guess) or binance.com or like any marketplace.
Q8. How will you attract sports teams to join the Chiliz Platform?
Alex: I will tease you on this one. it is not WILL, but "how DID you attract sports team to join the CHZ platform". So, for now we disclosed already 7 teams. Not one, but 7 top tier teams who have between 5m fans to 100m+ fans. For them, it is a way to engage with their fans globally, because Juventus or PSG, the problem they are facing is they know how to talk to their fans in the stadium or on twitter, but they have difficulty to engage more and give a real status to their fans in Asia for example.
How do you define a fan in 2020 ? someone who is in the stadium (that's unfair), someone who has a jersey (fake, real, ...), someone who follows twitter ? someone who just watch TV ? What is a fan. Clubs are trying to solve this equation. What we are truying to do with them, is by creating fan tokens, it gives a "recognition", sort of official status of a fan or superfan (Socios).
If you own one token or more, you are an official fan - even if you are not in the stadium. It creates a link between club/fans.
So to answer your question, clubs we are talking to are sharing our vision and actually want to embrace it + develop it to help THEM connecting with THEIR fans, using OUR technology and $CHZ. Now that we have 7 announced teams already, we will announce soon:
- latin american team
- new sports
- asian teams
- more esports teams (CS:GO, LOL, PUBG, ...)
we have a partnership team of 4 full-time people, that are talking to 50+ teams all over the world. Myself, I'm taking care of couple of BIG babies who have 200m+ fans. Eventually we ahve the first mover advantage, the more teams we sign, the more teams want to be part of it. And like liquidity, we have $ + product + users + teams + roadmap. It would be very difficult to compete with our offer, at this stage. We have so many features we want to launch, that will help and enhance the fan experience > clubs. Clubs loves it.
Sean: You guys rock! Great point about what makes a fan and all the possible touchpoints. You must be crazy busy! We really appreciate the tickets to the Serie A for the $CHZ listing promotion, some lucky customers will be lovin it!
Q9. Chiliz has a very impressive team, advisors and shareholders. How did you manage to gather all these people to work on your project? How many team members do you have?
Alex: We are more than 60 people right now, which probably makes us also one of the biggest crypto company - at least in Europe, outside of exchanges. Advisors, is an interesting question. Unlike advisors during the 2017/2018 crazy time, we didn't ask "blockchain specialists" or 'ICO" speciaslits to join our ranks, but actually pick people who can help us, AFTER the launch of our product (now) to grow our business. Improve our product, improve our networking, etc... in the sports space especially. The reason also, is that most of us - including myself - have 20y of experience in our businesses. Yes we are old but passionate as you can see.
And because we have 20 years of experience we also have huge network and authority. SO it helped us a lot. Last but not least, our project/product/venture/vision rocks and they wanted to be part of it.
Q10. Will CHZ ever move to its own mainnet?
Alex: Right now, we are using Ethereum as a technology for our permission chain, sort of Proof of Authority (like Klaytn in Korea, etc ...) Where all clubs become nodes/validators. Yes, PSG, Juventus, etc ... would become validators of our chain eventually. But we are also chain agnostic. We don't know who is gonna be the best chain in 2020/21/22. And we don't think we need to make a choice now. We rather focus on delivering a product that works, with users that enjoy a utility and features, get our first 000,000s users, improving the product, innovating, etc… instead of reinventing the next "scalable blockchain".
I can tell you already that we have been contact directly by some of the biggest chains, that actually wants us to move to their chain ... because we bring utility and realy use-case, beside traditional payments.
Sean: Thanks Alex. Now it’s the Live Q&A Session.Please submit your questions here and Alex will address it.
Please note that only 4 questions will be selected and selected questions will win a Serie A ticket for the Juventus vs. Udinese match taking place on Allianz Stadium 🎉⚽️ Let's do it!
Live Q1. Can club do the poll everyday or anytime they want in socios app?
Alex: We are a platform, like Facebook or Twitter or Ebay. Clubs can ask as many questions their want to their fans, now realistically in order to have meaningful questions and suspense/FOMO around it, it should be between 6 to 8 binding per seasons and more non-binding. There is one club that wants to do it every week actually, to really connect with their fan base.
Live Q2. The fan tokens issued beyond CHZ, in addition to offering the right to participate in official team surveys, what do you think if they would offer rights similar to those enjoyed by members of sports associations? For example, Barcelona FC and Real Madrid, which are not companies with shareholders but clubs with members, offer priority tickets and the opportunity to participate in club decision-making meetings to club members. Since most sports teams are companies (such as the existing partner teams Juventus and PSG) where 100% of the decision-making power is in the hands of the majority shareholder, Socios fan tokens could be the solution to provide a decision-making power and participatory benefits (such as priority tickers) to the fans.
Alex: Actually, if you know Barca & Real, you know that their fans are called Socios. That's our inspiration and WHY we are called Socios.com. The goal eventually is indeed to offer more money-can't buy experience and benefits to fan token holders, that will take time and education, but that's the real goal. When we pitch some of the big football clubs, the pitch was about "Socios 2.0 how to get a million socios"
Live Q3. Chiliz allows to fans the wonderful opportunity to participate in the life of the supported team and I hope that your project will grow as much as possible because I really like it. I think another great possibility that you could develop is the creation of a fantasy football where, through tokens, you can buy and exchange players. In the blockchain field, there is CryptoKitties that allows you to buy and exchange digital cats via non-fungible tokens. Have you already thought about this opportunity?
Alex: We are looking actively about NFT and collectibles. Honestly for now, haven't found the killer app that makes us want to do something amazing with it. But there is one entertainment company we are talking to, right now, that could trigger something very cool with it.
NFT are all about rights, we don't want to compete against Panini.We need to be creative in what we do and make it worthwhile for the users too. That will come in 2020 with some of the brands we either already have, or will have in the future (I can see 2 of the biggest one we haven't announced, to launch that with us).
Live Q4. You started the business in collaboration with European football clubs. Your business could be extended to all kinds of sports and all over the world. Why did you decide to start your business with European football clubs as first approach? Is it possible to exchange the fan tokens to buy the official merchandise of the respective teams?
Alex: Because football/soccer is BY FAR the biggest sports in the world. So rather start with football than javelin. As what we do is scale-based, we need to find scale. Football brings this. But as I said earlier and many times, we already have esports and are working on Cricket for India/Pakistan/CommonWealth countries, baseball for Japan/KR, and some other secrets stuffs I can't disclose.
Also Sean, before we end this AMA, let me add a few things. The last few weeks has been very important for us, not only we have released our app (go on Socios.com to download and test our early services), but also we generated our first revenue ($120k in few days) which shows that our model is getting some traction.
Of course it will take time, as we have 'invented' something new and we need to educate fans, users, clubs, etc… But want to share a few things with you. Since we launched, and since we are getting more and more coverage, we are directly being contacted by big corporations or clubs that wants to work with us. We have some of the biggest cricket clubs, reaching out to work with us, we have some of the BIGGEST telecom/media companies that want to be part of our adventure. And even more exciting, some of the sponsors (shoes, telecom, airlines, retail, etc ...) of the teams that we are working with that want to be integrated in Socios.com app/concept. We actually gonna have a couple of Proof of Concept with multi-billions companies in Q1, with the existing teams we are working with. Each of these initiatives, will allow our brand Socios.com & $CHZ to be promoted to - let's say Nike, Adidas, or whatever (this is for the purpose of the discussion here). so not only we get exposure from the sports teams themselves but we will soon get promotion from the sponsors who want to use our platform too. And the last few days in Korea, where I was, I can confirm this. We will be VERY active in Korea very soon and that will trigger a lot of new partnerships from north east asia.
Sean: Thanks for all the questions! Love the passion you have online and in-person! Much appreciation for your insightful responses, Alex. Today’s Chiliz x Crypto.com Community AMA is completed. We appreciate everyone who stayed all the way.
Live questions that were answered during the AMA will win a Serie A ticket for the Juventus vs. Udinese match taking place on Allianz Stadium, Turin on Dec 15 2019, 15:00 CET. ⚽️ Congratulations to the winners! 👏🎉 Our Community Manager will reach out to the winners individually.
Congratulations once again to all our winners for the Chiliz AMA, and huge thanks to Alexandre for taking the time to participate. See you next time.