The Chiliz (CHZ) fan token project team announced a version of Tokenomics 2.0 with an inflationary model and a token-burning mechanism
The Chiliz network, launched last year, introduced the new CHZ Tokenomics. It introduced a mechanism for burning tokens, as well as an inflationary model. This is stated in the project’s official blog.
Chiliz (CHZ) Introduces New Tokenomics
According to updated Tokenomics, initial annual core inflation will be 8.80%. Every year it will decrease, which is regulated by a special formula. Ultimately, after 14 years, the indicator will stabilize at 1.88%.
“This approach will balance high initial incentives with long-term sustainability,” the developers noted.
To increase the utility of the CHZ token, the inflation supply will be distributed as follows:
- 65% will go to validators as a reward for participating in network management and security;
- 10% will go to community vault and liquidity pools;
- 25% will go to support CHZ ecosystem projects.
It is expected that if the burning rate of transaction fees exceeds the annual inflation rate, however, it will change towards a deflationary model.
Benefits for the Chiliz Ecosystem
As the developers noted, the introduction of new Tokenomics is a significant step in the evolution of the ecosystem. This will ensure that CZH tokens remain a vital component of the network.
Key benefits include:
- Incentivize community participation through higher rewards;
- A sustainable growth of the Chiliz ecosystem;
- More opportunities for the development of decentralized finance (DeFi) on the project platform.
Additionally, Tokenomics 2.0 is a balanced approach to inflation and burn. This way, developers will be able to encourage a wide and active set of validators, which in turn will contribute to the decentralization and security of the network.
How CHZ is reacting?
According to CoinMarketCap, over the past 24 hours, the CHZ rate has strengthened by 8.1%. Over the past week, the price of the asset has collectively increased by 19.6%. At the time of writing, the token is trading at $$0.1277.
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In February 2023, Chiliz announced the successful launch of the second version of the blockchain. Chiliz Chain 2.0 allowed fans to buy NFT tickets for matches, and CHZ holders to receive rewards for staking.
Previously, the project introduced the Chiliz Chain SportFi ecosystem. With its help, developers will be able to create applications for fans.
About Chiliz (CHZ)
Chiliz is a cryptocurrency aimed at developing a sports and entertainment ecosystem on the blockchain. With Chiliz, sports and esports teams can sell their own fan tokens, which are then used as an exchange tool within the community.
CHZ is the platform’s own cryptocurrency, which is used within the Socios.com project to purchase fan tokens by fans of a particular team.
