Chiliz wants to spice up the Champions League, and it intends to do so by burning fan tokens. A move that could reignite interest in fan tokens while also revealing more about Chiliz and Socio’s plans for the future.
Following the 2022 crash, investors shifted their focus to Bitcoin and altcoins, leaving fan tokens on the sidelines.
Chiliz is taking steps to rekindle interest in fan tokens. Its CEO, Alexandre Dreyfus, recently announced the implementation of fan token burns, in which tokens will be burned every time a team scores a goal or wins.
Chiliz did, indeed, publish a schedule for the quarter-final token burns. It was also announced that 20,000 CITY fan tokens would be burned in celebration of Manchester City’s quarter-final victory. To account for the burns for each goal, 50,000 CITY tokens were burned in total.
Why are burns so appealing to holders?
The main point to remember about token burns is that they will eventually reduce the circulating supply of tokens.
In other words, the top teams will actively work to increase the value of their fan tokens by reducing the supply that is in circulation through burns.
Token burns may result in a significant decrease in the circulating supply of the best-performing teams’ fan tokens in the long run. This type of development will eventually make such fan tokens more appealing.
CHZ price history
Since the end of March, CHZ has been on an upward trend. However, the bullish momentum is beginning to fade, giving way to some selling pressure. CHZ’s press time price of $0.126 represents a 12% drop in the last five days.
CHZ traders should keep an eye out for a possible rebound near the $0.123 price level. This is due to the fact that it will most likely interact with the 50-day moving average at that level, as well as the 50% RSI level, which will most likely act as a psychological buy zone.
In terms of on-chain observations, Chiliz has experienced a surge in social dominance in the last 24 hours. The surge is most likely related to the fan token burn announcement.
Twenty-five hours prior to the announcement, the supply held by the top addresses grew.
Perhaps this was an indication that traders were buying the dip. Is there, however, significant buying pressure? The supply distribution of CHZ is divided. Addresses holding 100 million to 1 billion coins experienced some selling pressure in April, which eventually subsided.
Addresses in the 10 million to 100 million CHZ range have been purchased. Similarly, addresses with more than one billion tokens have contributed to the buying pressure.
However, addresses in the 10,000 to 100 million range have been reducing their balances, adding to the selling pressure.