Fan Tokens Have Much Larger Market Than NFTs, Says Chiliz CEO as Blockchain Prepares New Memecoin ‘Pepper’

Election 2024 coverage presented by
SINGAPORE — The Chiliz blockchain is aiming to become “the sports blockchain,” its CEO Alexandre Dreyfus said in an interview with CoinDesk while calling fan tokens’ market is much larger than non-fungible tokens (NFTs).
Dreyfus also said that, starting October 10, Chiliz is planning on launching a memecoin called Pepper. The reason for the new memecoin is “well, Chili Pepper,” he said.
The Chiliz blockchain’s native token is CHZ and it powers Socios.com, the largest sports fan token creator platform. Pepper will be airdropped to CHZ token holders but not for U.S. citizens and it can be farmed. Upbit crypto exchange in South Korea was the first exchange which announced its listing.
In March, leading up to the 2024 UEFA Euro football championships, prices of the CHZ token rose 25% in seven days, reaching a two-month high of over $0.15. It has since fallen to $0.068, according to CoinDesk data. It remains the number one sports token in the world by market cap.
“The chain is becoming what we aimed it to become, which is the sports blockchain,” said Dreyfus. “It’s unique. We are the only ones doing what we do. And we don’t want to do anything else.”
Dreyfus is looking to change the narrative around fan tokens, stating that their growth was under-recognized in comparison to NFTs.
“No offence to the NFT community but what people don’t realize [is that] fan tokens are a much bigger market than NFTs,” he said pointing to data that largely reflected the current 24-hour volume for NFTs at around $6.8 million, while for fan tokens it’s at $134 million, according to Coingecko.
“Of course, we’re comparing apples and oranges. One is fungible the other is non-fungible. But nobody does anything with it [NFTs]. With fan tokens every single week people are going to stadiums and voting.”
Although NFTs might have less trading volume currently, at the peak of the bull market, they became the next big thing in the digital assets sector as celebrities and big brands embraced the idea of unique digital assets that are verified using blockchain. At the time, the idea of having distinct and irreplaceable assets gained prominence within various communities, including digital art, music, videos and gambling.
Read more: What Are NFTs and How Do They Work?
Meanwhile, fan tokens are digital assets that represent membership to a community such as a sports team’s fan base. Token holders of specific teams can express their support while receiving specific perks, including game tickets and some participation in a sports club’s decision-making.
Dreyfus founded Chiliz with the vision to recognize that “95% of sports fans are not in the stadium, the city or the country of the team they’re supporting,” so, we wanted to create something that is “both valuable for the fan and scalable for the team.”
“After signing Paris Saint-Germain F.C. (French football club) as our first team in 2018, we now work with more than 80 sports properties all over the world with 300 employees in nine offices,” Dreyfus said.
Each team that signs up has its own token but the CHZ token acts as a governance token and Dreyfus said that his firm has now created a network of the “biggest sports broker in the world.” It’s given fans the ability to make some decisions, even if they are soft decisions, such as deciding which song will play when a goal is scored as it happened when Cristiano Ronaldo scored thrice for Juventus once.
“This is the perfect example of how something on chain changed something in real life,” Dreyfus said. “Only the token holders could choose the music. And they were not able to do it before. So, soft or not soft, it doesn’t matter.”
In 2021, Socios signed 27 NBA teams and 13 NFL teams but did not launch a token, it also signed several cricket teams in the Indian Premier League. Dreyfus said Socios has regulatory licenses in Italy, Spain, Portugal, and Lithuania, and noted that “apart from crypto exchanges, it’s the most regulated” crypto entity in the world.
“We had to go through the same work as an exchange, except that we don’t do bitcoin and Ethereum, we just do fan tokens.”
Turkey (one million users) and Brazil (500,000 users) are its biggest markets.
Read More: How DAO Crowdfunding Could Revolutionize Sports
UPDATE (Oct. 3, 2024, 09:12 UTC): Clarifies that CHZ token acts as a governance token on the Chiliz blockchain by removing mention of Ethereum.
Edited by Aoyon Ashraf.
Disclosure
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.
Amitoj Singh is a CoinDesk reporter.