The forthcoming Dragon8 hard fork by Chiliz will optimize the CHZ token’s economy by adjusting inflation rates and burning transaction fees, paving the way for a balanced ecosystem.
Chiliz, the leading blockchain tailored to the sports and entertainment sectors, is set for a major Dragon8 hard fork on May 21st. This update will refine the project’s tokenomics and introduce a transaction fee-burning mechanism intended to balance the incentive structure for both validators and users.
Chiliz and its Socios fan platform facilitate enhanced fan engagement by enabling supporters to interact with their favorite sports teams and clubs through fan tokens. These tokens not only grant voting rights on certain club decisions but also provide access to exclusive promotions and further engagement opportunities, thereby fostering a deeper connection between fans and sports entities.
In terms of tokenomics, Chiliz is poised to implement an annual inflation rate for its native CHZ token starting at 8.80% in the first year, which will gradually taper off, reaching an inflation floor of 1.88% after 14 years. This newly minted supply will be allocated among validators (65%), the community (10%), and ecosystem/operational needs (25%). With the new hard fork, the platform will also adopt the EIP-1559, which will see a substantial portion of transaction fees being burned, thus introducing a deflationary mechanism alongside inflation.
Celebrating its first year since launching its mainnet, Chiliz has attracted top names from the crypto and sports sectors as validators, including football super club Paris Saint Germain (PSG) and more recently Atlético de Madrid.
PSG made history as the first soccer team to validate a blockchain, pledging to reinvest all earnings from node operations into regular $PSG Fan Token buybacks from the public marketplace. Currently, $PSG stands as the second-highest token by market capitalization within the Chiliz ecosystem at $40 million, followed by tokens from FC Barcelona and Manchester City.
In its expansion efforts this year, Chiliz has secured influential partnerships, notably with SBI Digital Asset Holdings to breach the Japanese market. They plan to set up a joint venture to offer local fans access to tokens from top football clubs like Manchester City and AC Milan.
Similarly, a recent alliance with the UAE Pro League aims to launch a Web3-based fantasy football game and introduce exclusive blockchain-authenticated game-scored balls, marking another stride in diversifying fan engagement through web3 technology.
Looking ahead to the UEFA European Championship 2024, Chiliz is well-positioned to capitalize on this event, potentially boosting the visibility and adoption of the CHZ token amidst growing excitement in the sports world.