Chiliz (CHZ) Roars Into Top 50 Token List
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Chiliz (CHZ) is a new sensation to arrive among the top 50 of coins. The asset looks promising and liquid enough to deliver notable price action. CHZ is a relatively recent token, only trading for about a year.
After a long period of almost no activity, CHZ is now appreciating by the day. CHZ started off at about $0.01, only to reach a peak at $0.75 within weeks. After a brief dip, the asset is on another upward leg, trading at $0.55.
What is CHZ?
The Chiliz project aims to become the leading blockchain provider for sports and entertainment. Chiliz aims to be a simplified, fast and accessible blockchain platform, by building its own network. The project mimics fintech access to small payments, to reach users already used to those finance tools.
The goal of Chiliz is to drive engagement with sports or entertainment celebrities, while building a community and an economy around the CHZ token.
The token itself is engineered to be used on the Socios.com platform. The blockchain itself has other tokenization capabilities, and holds regular token sales in addition to hosting CHZ. Recently, the Professional Fighters League launched its PFL fan engagement token on the network.
Is CHZ a Good Investment?
Fan engagement is one of the recent niche trends in blockchain use. CHZ distinguishes itself with more significant liquidity through a Binance International listing. The CHZ/USDT pair had a liquidity index above 640 on Binance, as of April 13. CHZ is one of the selected tokens listed through Binance Smart Chain, becoming open to a new crowd of investors. For now, Binance Smart Chain is still closed to US traders, along with Binance International Exchange.
This index is about 30% lower in comparison to Bitcoin (BTC) trades, which are a benchmark of relative stability. However, the liquidity of CHZ is only a current snapshot. It is not unusual for coins on Binance to receive sudden attention and achieve very fast gains. In the past few days, this is what happened with Binance’s native token, BNB, which gained 30% overnight on rapid trading.
So while CHZ may be in for some short-term gains, it should be approached with caution.
Currently, CHZ is driven by social media hype and expectations of short-term performance for active traders.
Like all crypto assets, CHZ can grow over the years, yet achieve deep corrections in the short term. The Chiliz project has a significant fan base, with expectations of continuing price appreciation. However, the high volatility may easily make some of the holders capitulate. The behavior of CHZ so far is similar to that of tokens where investors “ape” into a trading position.
What are User Engagement Tokens
User engagement tokens are a new tool to drive both crypto adoption and platform usage. Because token creation is relatively easy, the trend has created a handful of assets with this use case.
One of the oldest user engagement tokens is IQONIQ (IQQ), trading around $0.65. Currently, IQQ is mostly active on Uniswap pairs, with a recent listing on Bittrex International. Other user engagement tokens include Engagement Token (ENGT) and Gamee (GMEE). Most of the tokens have not yet taken off, and are less liquid.
User engagement tokens are also used to sell non-fungible tokens (NFTs) within their respective ecosystems. Sports and entertainment have proven to be one of the most popular sources of NFTs. Still, the use case is still relatively small in comparison to trading and speculation, and the tokens are in their early stages of adoption.
Chiliz Hosts Native Exchange
In addition to its success on Binance, the Chiliz project has its own exchange. The goal of this marketplace is to serve as a switch between multiple Fan Tokens and the CHZ asset.
The other function of the platform is to perform so-called Fan Token Offerings, a crowdsale of new assets. Those tokens will then have an immediate listing and liquidity on the main exchange. The projects have the advantage of being curated before they appear on the market.
Thus, owning CHZ may expose users to potential markets for very speculative assets. For now, this is still a highly risky trade.
Can US Buyers Still Get CHZ?
Fan tokens are a special case in the crypto space. One of the hurdles for US users is the unclear status of crypto assets and whether they represent unregistered securities. While most projects claim their tokens are not in any way similar to a stock issuance, the US Securities and Exchange Commission has penalized token issuers.
Chiliz for now allows the purchase of CHZ tokens for US buyers through its app. However, the amount is capped at $250 per day, and there is also a withdrawal limit. CHZ is not anonymous for US buyers, and is linked to a personal account.
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