By Mark Ackman
According to the CEO of Chiliz and Socios.com, scalability is one reason for the fan token market expansion despite the current bear market. Despite the prolonged bear market, Chiliz, the blockchain startup that founded the fan token platform Socios.com, has continued to increase its workforce, reflecting a developing trend in the fan token industry.
So far this year, cryptos’ value has declined by more than 60% as many crypto holders continue to sell off their digital assets. Some big cryptocurrency firms, including Coinbase and Gemini, had to trim their workforce by 10% to 20% to keep their businesses afloat. While many crypto firms are struggling to survive the current crypto winter, the fan token market seems to have displayed some resiliency.
Chiliz Increases Its Workforce By 70%
Nevertheless, Chiliz has increased its personnel by more than 70% this year, according to Alexandre Dreyfus, CEO of Chiliz and Socios.com. Dreyfus claims that Chiliz now has more than 300 full-time workers working out of its new offices established this year in Miami, Switzerland, London, Milan, and Sao Paulo. Additionally, the company has added new employees at its offices in Istanbul, Madrid, Lyon, and Malta. Thus, expanding its presence worldwide in 2022.
“We’ve greatly expanded our workforce and global footprint,” Dreyfus said, adding that Chiliz had successfully weathered the previous severe crypto winter. “We have been through similar situations in the past,” he said, stressing that the business was created in 2018.
Chiliz’s Recruiting Spree
According to on-chain data analytics firm, CryptoSlam, monthly transaction volumes for fan token sales globally have increased by almost 200% since the start of this year, hitting approximately $6.4 billion in September. These volumes totaled $2.2 billion in January. Chiliz’s recruiting frenzy this year mirrors a growing trend in the fan token sector.
According to CryptoSlam statistics, although sales volumes of fan tokens have increased, the demand for nonfungible tokens (NFTs) has been the reverse. Monthly worldwide NFT sales volumes have dropped by 88% from $4.8 billion in January to $550 million in September 2022, while trading volumes have fallen 98% compared to the beginning of the year.
According to Dreyfus, scalability is one likely reason for the fan token market’s success. “Fan tokens are the only digital assets that can reasonably achieve the scale required to enable millions of people to access these communities.” Fan tokens, as opposed to NFTs, are fungible digital assets, meaning each token has the same value and may be used interchangeably.
NFTs have received praise for their numerous applications, including their capacity to create communities centered on token holders. The problem is that producing even a small number of NFTs is costly.
The Chiliz CEO clarified that fan tokens are not meant to replace NFTs but to complement them. He added that Chiliz has a robust NFT model because they are critical to the company’s goals.