One of the world’s best football club with hundreds of millions of fans has announced they are to launch a fan token in partnership with a little known start-up, but is this more of a potentially paid advert for the platform, and is the token close to a sham?
“Juventus announce partnership with blockchain platform @Sociosdotcom to launch Fan Token,” the football club tweeted out today to more than a million followers, linking to a press release on its official website.
The news so big crypto earth should be shattering, but the reception it received instead was four letter words followed by coin.
Socios says they are based on ChiliZ, a platform that raised this summer $66 million from Binance, OKex and others in a private toke sale where one token went for $0.032 USD.
The ChiliZ token has not yet launched. It is meant to run on ethereum’s public blockchain like hundreds of other tokens.
Juventus, however, is to run on a private blockchain. We asked ChiliZ’s CEO, Alexandre Dreyfus, how come their token gets to be on the public blockchain, while Juv is on a private blockchain. He says:
“The Socios blockchain will be a side chain, with each club becoming a [Proof of Authority] PoA/node. At least, at first. Our token is like a ‘master token’ to enter the platform, then with chiliz token, you can buy JUV/PSG/etc.”
The Juv tokens can’t move around freely like say sending them to a decentralized exchange (dex), we asked. With the answer being a clear “nope.”
We thus asked again why their own token gets to be a proper ethereum based token, while Juventus’ token goes to a private centralized blockchain where it sounds like it isn’t a token at all. Dreyfus says: “because this is how we designed our model for now.”
He further suggested it was primarily due to AML/KYC requirements, but ChiliZ had itself applied AML/KYC.
“Did they get any upfront payment for the deal?” – we asked. “Can’t disclose commercial terms.” – Dreyfus says.
He had further stated “We have Paris Saint-Germain, Juventus and much more to come. The Fan Token Offering, is like an ICO-ish. So it generates revenue for them.”
“How much is Juventus hoping to raise through the fan token?” – we asked. “Not disclosed.” – Dreyfus says.
He further said they are “not securities under Maltese regulation (from anywhere, anyway we are purely utility).” The utility of Juv, he says, is “voting and getting benefits (invitations, VIP access, etc …).”
ChiliZ was a private sale so it probably falls under exemptions to securities regulations. Moreover, paying a club to join your platform is probably not illegal, but it does sound like a gimmick, an advert.
If Juventus wanted to tokenize, they can send one of the devs running their website to Solidity School and can launch their own smart contract on ethereum’s public blockchain like ChiliZ has and countless of others.
Including Dodgers, for example, which has independently taken the initiative to be a bit cool and digitize their baseball cards.
If ChiliZ was a platform that provided the above service, that would have been a bit interesting, but sending “tokens” to a private blockchain where they can’t move is little different from karma points on Reddit.
Which may be why undisclosed “commercial terms” may have contributed to this decision by Juventus and Paris Saint-Germain.