Chiliz
NFTs · SportsToken Transparency Filing
Project & Team
Description of Project
Provide a concise narrative that clearly states each of (a)–(e) below.
- (a) Problem the project solves — The problem the project is solving.
- (b) Operational priorities — Provide a high-level description of how the project expects to support ongoing development and operations over time.
- (c) High-level project overview — How the project works at a high level.
- (d) Primary token functions — The primary functions of the token (e.g. gov participation).
- (e) Control surface reliance — If any, briefly describe the anticipated or possible evolution of the protocol's governance/control model.
(a) Problem the project solves
Chiliz Chain is a Layer-1 blockchain dedicated to sports and entertainment, and it anchors an ecosystem of Fan Tokens, the Socios.com fan-engagement platform, and SportFi applications. Fan Tokens give sports fans access to engagement opportunities, rewards, and digital-asset experiences tied to teams and brands.
(Source: Chiliz White Paper v1.1, The Chiliz Group)
(b) Operational priorities
The protocol operational priorities center on maintaining the chain, incentivizing validators and delegators, growing the ecosystem, and supporting fan-facing products. Block rewards and inflation are split between validators and delegators, a Community Vault, and ecosystem and operational pools, and the 2018 private-placement proceeds funded development of the Chiliz Chain, the Socios.com platform, ecosystem growth, marketing, and operational expenses.
(Source: About Staking, Tokenomics, Chiliz White Paper v1.1)
(c) High-level project overview
CHZ is the native token of Chiliz Chain, a public, permissionless, EVM-compatible Layer-1 blockchain based on a fork of BNB Smart Chain and operated through a Proof-of-Staked-Authority consensus model. The ecosystem consists of CHZ, the Chiliz Chain, a sports-and-esports partnership network that issues Fan Tokens, and Socios.com as the fan-engagement platform.
(Source: Chiliz White Paper v1.1, About Chiliz Chain)
(d) Primary token functions
CHZ pays gas fees, runs validator nodes, delegates to validators, and submits or votes on onchain governance proposals through validator participation. CHZ holders may freely transfer, exchange, trade, or otherwise dispose of their tokens.
(Source: Chiliz White Paper v1.1, About Staking)
(e) Control surface reliance
Chiliz Chain relies on a validator-driven PoSA governance model rather than direct tokenholder governance. The network launched with an initial set of 11 validators, voting power depends on delegated CHZ, voting authority rests with the validator owner, and a proposal requires a two-thirds quorum and more than 50% support to execute. Chiliz added a proposeWithCustomVotingPeriod method for shorter emergency voting periods, and new validators must be vetted and approved by Chiliz Labs before they are proposed to the existing validator set.
(Source: Chiliz Chain Governance, About Staking, Become a Validator)
Known Project Team
For each existing entity: Labs/DevCo (e.g., Founder, CEO, CTO, COO), Foundation (e.g., President, Executive Director, CFO, COO), and DAO / onchain governance leadership (if applicable) list the: (a) full names, (b) official titles, (c) and prior experience of key team members. For any non-existent entity, explicitly mention it does not exist. External links may be included but they will not factor into the score.
Full Name | Entity | Official Title | Prior Experience |
|---|---|---|---|
Alexandre Dreyfus | Labs | Chief Executive Officer and Founder | Founder of Mediarex Group in 2006 and creator of the Global Poker Index and earlier online-gaming ventures. Serves as Director of The Chiliz Group Limited. |
Emma Diskin | Labs | Group Chief Operating Officer | Prior-experience biography not publicly disclosed. |
Max Rabinovitch | Labs | Chief Strategy Officer | Prior-experience biography not publicly disclosed. |
Thibaut Pelletier | Labs | Chief Technology Officer | Prior-experience biography not publicly disclosed. |
Mark Verdegaal | Labs | Chief Product Officer | Prior-experience biography not publicly disclosed. |
Julian La Picque | Labs | Group Chief Financial Officer | Prior-experience biography not publicly disclosed. |
Gilbert Camilleri | Labs | Chief Marketing Officer | Prior-experience biography not publicly disclosed. |
The project does not operate a foundation entity. The Chiliz Group Limited is the issuer of CHZ and Mediarex Enterprises Limited is the parent holding company and owner of all ecosystem intellectual property. | Foundation | ||
Chiliz Chain governance is validator-led rather than a tokenholder DAO, and no individual officeholders are named for a governance body. Voting authority rests with validator owners in proportion to delegated CHZ. | DAO | ||
Blockworks note: (Source: The Chiliz Group, Chiliz White Paper v1.1, Chiliz Chain Governance, About Staking) |
DAO Structure
Provide a structured description of the DAO's governance, powers, and economic rights. If a DAO does not exist, state so. Address the lettered items below. Even if there is no DAO, there must be an answer to (d).
- (a) IP ownership & control — State what IP the DAO owns or controls (e.g., codebases/repos, trademarks/brands). Note any license if relevant.
- (b) Contract/admin powers — List onchain or administrative authorities and limits: pause/upgrade roles (e.g., multisig pause), governance-executor authorities, and the method of authority for each (e.g., veto, majority, super-majority).
- (c) Locked-token rights (conditional) — If locking/staking for additional rights exists, explain the additional rights and what tokenholders can and cannot decide. If no locking mechanism exists, leave absent.
- (d) Value accrual & holder rights — If any, describe the current rights of tokenholders over revenue distribution and the treasury.
- (e) Dissolution authority — State who can dissolve/wind up the DAO and by what mechanism (e.g., onchain vote threshold, board resolution of a legal wrapper).
(a) IP ownership & control
Chiliz Chain does not hold ecosystem intellectual property in a DAO structure. Mediarex Enterprises Limited serves as the holding company and owner of all intellectual property for the Chiliz and Socios.com ecosystem.
(Source: Chiliz White Paper v1.1)
(b) Contract/admin powers
The governance model is validator-led and based on Compound Alpha governance. Validator owners cast votes according to delegated CHZ voting power, a two-thirds quorum is required, and a proposal executes once quorum is reached and more than 50% of voting power supports it. Chiliz added a proposeWithCustomVotingPeriod method for shorter emergency voting windows, and governance-gated registry functions such as contract removal are restricted to onchain governance.
(Source: About Staking, Chiliz Chain Governance, Governance Proposals Changelog)
(c) Locked-token rights (conditional)
Staking confers governance and reward rights. A participant must stake at least 10,000,000 CHZ to run a validator and, when active, may submit and vote on governance proposals. Delegators may delegate as little as 0.01 CHZ, participate in governance indirectly through validator voting power, and receive a share of validator rewards.
(Source: Become a Validator, About Staking)
(d) Value accrual & holder rights
CHZ holders may transfer, trade, stake, delegate, and in validator form submit or vote on governance proposals. CHZ does not confer equity, profit-sharing, revenue rights, liquidation rights beyond nominal token value, or intellectual-property rights in the issuer.
(Source: Chiliz White Paper v1.1)
(e) Dissolution authority
Chiliz Chain does not operate a separate DAO legal wrapper, and no DAO dissolution or winding-up mechanism is publicly disclosed.
(Source: Chiliz White Paper v1.1)
Primary Foundation
For the Primary Foundation do the following independently. If an entity does not exist, state that explicitly. Items (a)–(f) apply only if that entity exists; state explicitly that the entity doesn't exist. Definitions: The primary Foundation and DevCo can be explained as those entities which are directly involved in the issuance of the native token at launch.
- (a) Entity — Type and jurisdiction.
- (b) IP ownership & control — What IP the entity owns/controls (repos/code, trademarks/brand; license optional) and an explanation of any subsidiary entities.
- (c) Powers over DAO, treasury, protocol-controlled resources, and token administration — If any, describe the current powers over DAO governance, treasury actions, protocol-controlled resources (e.g. revenue), token administration, or reward parameters, and the method/threshold for each.
- (d) Powers over DevCo — Explain whether the foundation can exert direct or indirect influence over decision-making of the DevCo.
- (e) Contract/admin powers — Pause/upgrade/governance-executor authorities and the method/threshold for each (e.g., veto/majority/super-majority; "3/5 multisig").
- (f) Current economic arrangements and distribution policies — Describe any current governance-approved, contractual, or programmatic mechanisms, if any, by which protocol-controlled resources, treasury assets, fees, revenue, rewards, or token distributions may be directed to this entity, its equityholders, contributors, or other participants. If no such mechanism currently exists, state that explicitly. Do not discuss hypothetical future dividends, repurchases, or distributions unless formally adopted.
(a) Entity
The project does not operate a foundation entity. The Chiliz Group Limited is the issuer and data controller for CHZ, and Mediarex Enterprises Limited is the parent holding company and owner of all ecosystem intellectual property. No launch-linked foundation structure exists for CHZ.
(Source: Chiliz White Paper v1.1)
(b) IP ownership & control
The project does not operate a foundation entity.
(c) Powers over DAO, treasury, protocol-controlled resources, and token administration
The project does not operate a foundation entity.
(d) Powers over DevCo
The project does not operate a foundation entity.
(e) Contract/admin powers
The project does not operate a foundation entity.
(f) Current economic arrangements and distribution policies
The project does not operate a foundation entity.
Primary Dev Co
For the Primary DevCo do the following independently. If an entity does not exist, state that explicitly. Items (a)–(f) apply only if that entity exists; state explicitly that the entity doesn't exist. Definitions: The primary Foundation and DevCo can be explained as those entities which are directly involved in the issuance of the native token at launch.
- (a) Entity — Type and jurisdiction.
- (b) IP ownership & control — What IP the entity owns/controls (repos/code, trademarks/brand; license optional) and an explanation of any subsidiary entities.
- (c) Powers over DAO, treasury, protocol-controlled resources, and token administration — If any, describe the current powers over DAO governance, treasury actions, protocol-controlled resources (e.g. revenue), token administration, or reward parameters, and the method/threshold for each.
- (d) Powers over Foundation — Explain whether the DevCo can exert direct or indirect influence over decision-making of the Foundation.
- (e) Contract/admin powers — Pause/upgrade/governance-executor authorities and the method/threshold for each (e.g., veto/majority/super-majority; "3/5 multisig").
- (f) Current economic arrangements and distribution policies — Describe any current governance-approved, contractual, or programmatic mechanisms, if any, by which protocol-controlled resources, treasury assets, fees, revenue, rewards, or token distributions may be directed to this entity, its equityholders, contributors, or other participants. If no such mechanism currently exists, state that explicitly. Do not discuss hypothetical future dividends, repurchases, or distributions unless formally adopted.
(a) Entity
The Chiliz Group Limited is a private limited liability company incorporated in Malta under company registration number C 77290, with its registered address at Level 6, Wembley Business Centre, 179 Triq D'Argens, Msida MSD 1360, Malta. It is the issuer and data controller for CHZ.
(Source: Chiliz White Paper v1.1)
(b) IP ownership & control
The Chiliz Group Limited does not own the ecosystem intellectual property. Mediarex Enterprises Limited, established in 2006, is the parent holding company and owner of all intellectual property for the Chiliz and Socios.com ecosystem.
(Source: Chiliz White Paper v1.1)
(c) Powers over DAO, treasury, protocol-controlled resources, and token administration
The Chiliz Group Limited manages the token reserve allocated for ecosystem growth, including marketing, user-base rewards, and strategic partnerships, and ensures regulatory compliance in relation to CHZ. The permissionless Chiliz Chain and the ecosystem in which CHZ is stored are not controlled or operated by the issuer.
(Source: Chiliz White Paper v1.1)
(d) Powers over Foundation
The project does not operate a foundation entity, so no DevCo powers over a foundation exist.
(Source: Chiliz White Paper v1.1)
(e) Contract/admin powers
No public source attributes a standalone onchain admin role to the issuer. Governance is validator-led based on delegated CHZ voting power, contract-registry changes are governance-gated, the governance contract supports emergency custom voting periods, and Chiliz Labs performs offchain validator vetting before a new validator is proposed to the active set.
(Source: Chiliz Chain Governance, Become a Validator, About Staking)
(f) Current economic arrangements and distribution policies
Approximately $65 million raised via private placement in 2018 was allocated toward development of the Chiliz Chain, the Socios.com platform, ecosystem growth, marketing, and operational expenses. Inflationary supply is split 65% to validators and delegators, 10% to the Community Vault with liquidity-provider and shared-security restaking rewards, and 25% to Ecosystem and Operational Distribution.
(Source: Chiliz White Paper v1.1, Tokenomics)
Blockworks note: The Chiliz Group Limited, previously named HX Entertainment Limited, is the launch-linked issuer and operating company for CHZ.
Token Supply & Allocations
Initial Allocation
Disclose launch and initial supply details in a single initial allocation schedule covering the token's launch.
- (a) Launch supply totals — The total number of tokens issued at launch, the total number of tokens locked at launch or the total number of tokens unlocked at launch.
- (b) Recipient categories & use of funds — The recipient categories with brief explanations as to how the category will use the tokens so an auditor can distinguish each bucket.
- (c) Initial price per token (if applicable) — The initial price per token at TGE. If the token launched via a liquidity bootstrapping mechanism, auction, or other price-discovery process rather than a fixed offering price, describe that mechanism and the final market set price instead. If no fixed price was set, state so.
- (d) Ticker / market symbol — The ticker/market symbol.
- (e) Total supply & supply regime — The total supply and whether the supply is fixed (if not explain inflation rate or deflation rate).
- (f) Initial vesting / release schedules — The initial vesting/release schedules (identify which categories/recipients are subject to vesting and the high-level timing logic).
(a) Launch supply totals
CHZ was originally minted in 2018 as an ERC-20 token on Ethereum with an initial total supply of 8,888,888,888 CHZ. No public sale was conducted, and the TGE was executed solely through private placements. The private round concluded on June 8, 2018 at $0.032 per CHZ, distributed 3,066,666,666 CHZ, and raised approximately $65 million. At the token's exchange listing in 2019, circulating supply was slightly under 40% of total supply and the remaining tokens were locked in company-held reserves. (Source: Chiliz White Paper v1.1, Chiliz Binance Listing Proposal)
(b) Recipient categories & use of funds
Token Sale and Pre-Sale received 3,066,666,666 CHZ, 34.5%, to execute the TGE through private placement. Team received 444,444,444 CHZ, 5%, and Seed Investors received 666,666,666 CHZ, 7.5%, a combined 1,111,111,110 CHZ to compensate the founding team and reward pre-launch seed backers of The Chiliz Group Limited. Advisory Board received 266,666,666 CHZ, 3%, to compensate first-tier business advisors supporting the company post launch. Userbase Reserve received 1,777,777,780 CHZ, 20%, to fund user-base rewards and adoption incentives for Socios.com, including a 3-token addition offsetting fractional allocations to other categories. Marketing Operations received 1,333,333,333 CHZ, 15%, to fund marketing campaigns and promotional activities. Strategic Acquisitions received 1,333,333,333 CHZ, 15%, to fund strategic partnerships and acquisitions in line with the needs of the company. (Source: Chiliz Binance Listing Proposal, Chiliz White Paper v1.1)
(c) Initial price per token (if applicable)
The initial issue price was $0.032 per CHZ in the private round. No fixed public offering price was set because no public sale occurred. (Source: Chiliz White Paper v1.1)
(d) Ticker / market symbol
The ticker is CHZ. (Source: Chiliz White Paper v1.1)
(e) Total supply & supply regime
The initial total supply was fixed at 8,888,888,888 CHZ. The supply regime is no longer fixed. The Dragon8 hard fork, whose tokenomics went live on the Chiliz Chain mainnet on June 17, 2024, introduced a decreasing inflationary model with an 8.80% first-year base rate declining to a 1.88% long-run floor after 14 years, and the Pepper8 proposal adjusted Years 3 through 7 of that schedule to offset a one-time protocol-level CHZ issuance tied to the Paribu Net transition while realigning with the original Dragon8 schedule in Year 8. As of August 18, 2026, total supply and circulating supply are both 10,492,693,805 CHZ with no maximum supply. (Source: Tokenomics, Dragon8 Proposal, Pepper8 Proposal, CoinGecko)
(f) Initial vesting / release schedules
Team tokens vested over 36 months from exchange listing. Advisory Board tokens vested over 18 months from exchange listing. A few small bonus allocations to private-placement buyers carried 4 to 6 month vesting periods, and the remaining private-placement tokens were unvested. The Userbase Reserve, Marketing Operations, and Strategic Acquisitions categories were released periodically per business needs with no fixed schedule. All initial-allocation vesting has concluded and the initial supply is fully unlocked, with the unlock schedule ending in 2022. (Source: Chiliz Binance Listing Proposal, Tokenomist)
Blockworks note: (Source: Chiliz White Paper v1.1, Chiliz Binance Listing Proposal)
Airdrop Process
Address each of the following sub-items based on the project's airdrop status. If a sub-item does not apply to the project's situation, state that explicitly.
- (a) Planned but not yet executed airdrop — If the project has planned but not yet airdropped, commit to publishing a recipient wallet list in a public channel and provide it to Blockworks quarterly until the initial TGE airdrop is fully completed. Additionally, generally state the possible target user segments (e.g., "stakers of X," "Aave users") and the allocation method (e.g., proportional to ve-balance or net position).
- (b) Executed airdrop — If the project has already airdropped, point to a per-address source such as CSV/TSV/JSON files, a Dune table, a full Merkle dump, GitHub repo files embedding per-address allocations, or RPC endpoints that expose claim/amount data; explorer links alone do not count. Additionally, clearly state covered user segments (e.g., "stakers of X," "Aave users") and the allocation method (e.g., proportional to ve-balance or net position).
- (c) No airdrop planned or conducted — If the project does not plan to conduct an airdrop for TGE and has never conducted one, state so plainly (e.g., "We have never conducted an airdrop to date and do not plan to execute one").
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Planned but not yet executed airdrop: This sub-item does not apply. Chiliz has no planned or pending airdrop, no target user segments, and no airdrop allocation method, so no recipient wallet list commitment is applicable.
(Source: Chiliz White Paper v1.1)
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Executed airdrop: This sub-item does not apply. Chiliz has never executed an airdrop, so no per-address airdrop dataset, covered user segment, or allocation method exists.
(Source: Chiliz White Paper v1.1)
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No airdrop planned or conducted: Chiliz has never conducted a CHZ airdrop and does not plan to execute one. CHZ was issued through a private placement with no public sale and no airdrop, so there is no per-address airdrop dataset and no public airdrop allocation methodology.
(Source: Chiliz White Paper v1.1)
Transactions & Market Structures
Market Maker Agreements & Deals
Projects must disclose all material terms of market-making arrangements that affect token liquidity. If the project has no agreements or deals with market makers, state that explicitly; doing so earns full credit. For each market maker, include in a table:
- (a) Market maker's name — the market maker's name;
- (b) Token allocation or loaned amount — the token allocation or loaned amount as a percentage of total supply;
- (c) Duration/term of agreement — the duration/term of the agreement; and, where applicable,
- (d) Name of agreement structure — label the financial vehicle being used in the agreement (i.e. loan, option/call, retainer model) without describing trading strategy or expected outcomes.
If the project has no agreements or deals with market makers, state that explicitly; doing so earns full credit. If no native tokens were loaned or allocated to market makers, state that explicitly; cash/fiat retainers or fees are not required for this item.
Blockworks note: No market-maker agreement, token loan to a market maker, or named market-making deal structure affecting CHZ liquidity is publicly disclosed.
(Source: Chiliz White Paper v1.1)
CEX / DEX Agreements & Deals
Projects must disclose all material terms of centralized or decentralized exchange listings that affect token liquidity. For each listing, include in a table:
- (a) Exchange name / DEX pool — the exchange name (and, for DEX, the specific pool/pair);
- (b) Token allocation for listing — the token allocation supplied or committed for listing as a percentage of total supply;
- (c) Term Duration — the duration/term of any listing lockups, liquidity, or incentive programs; and, where applicable,
- (d) Native-token listing fees — whether any listing fees were paid in native tokens, with amounts (tokens or % of supply), recipients, and any vesting or lock terms tied to the partnership.
If the project has no agreements or deals with CEX or DEX, state that explicitly; doing so earns full credit; cash/fiat fee amounts are not required for this item.
Blockworks note: CHZ is listed on multiple third-party exchanges, including Binance, Bybit, Coinbase, OKX, Kraken, Bitget, and Gate, and the issuer is seeking admission to trading on MiCA-compliant platforms in the European Union. No bilateral listing agreement, token-allocation commitment for a listing, duration term, or native-token listing fee is publicly disclosed.
(Source: Chiliz White Paper v1.1, MiCA Milestone)
Financial Disclosures & Risks
Prior Token Sales & Fundraising
Disclose all prior token sales by the Project — including fundraising rounds, any material OTC sales to investors, and any discounted market-maker sales. For each sale, provide:
- (a) Series Name
- (b) Early-Stage Investment Instrument used (i.e. SAFT, STAMP, SAFE, SAFE+Token Warrant, etc.)
- (c) Date of sale (at least month & year)
- (d) Number of tokens sold (or % of total supply)
- (e) Vesting schedule
If no prior sales occurred, state that explicitly (e.g., "No prior fundraising, OTC, or discounted MM sales have occurred.").
- Series Name: Private placement / private round
- Date Of Sale: Concluded June 8, 2018
- Number of tokens sold: 3,066,666,666 CHZ, 35% of the initial supply
- Vesting Schedule: No public vesting schedule disclosed
Blockworks note: CHZ was issued through a private placement rather than a public sale. The private round concluded on June 8, 2018, raised approximately $65 million, priced CHZ at $0.032, and distributed 3,066,666,666 CHZ, a 35% hard cap of the initial supply. No public vesting schedule for the private-placement allocation is disclosed.
(Source: Chiliz White Paper v1.1)
Previous Exploits Affecting The Native Token
If any, list prior exploits or incidents that directly affected the token, token supply, tokenholder balances, token contract, minting controls, burn mechanics, or custody of token supply. This question is not asking about general protocol, application, or smart contract exploits unless the incident directly affected the native token itself. If no prior incidents, state this explicitly (e.g., "No exploits affecting tokenholders or protocol funds as of YYYY-MM-DD").
- (a) Date & component affected — Date (YYYY-MM or YYYY-MM-DD), chain(s)/component affected.
- (b) Exploit vector summary — Plain-language summary of the exploit vector (what the hack was).
- (c) Quantified impact — Quantified impact (assets/tokens affected or a clear "no loss of funds" statement).
- (d) Remediation/response taken — Remediation/response taken (patches, upgrades, governance actions, compensation).
- (e) Current status — Current status (resolved, in litigation, under investigation, refunded, etc.).
- (f) References (optional) — References (optional): link(s) to post-mortem/advisory/PR.
(a) Date & component affected
May 21 to May 22 2024, Chiliz Chain mainnet Dragon8 hard fork
(b) Exploit vector summary
Floating-point logic in the original inflation formula produced non-deterministic results across validators and prevented consensus
(c) Quantified impact
The chain halted after 37 post-fork blocks, which were rolled back and later reprocessed, with no public loss-of-funds statement
(d) Remediation/response taken
Chiliz released client version 2.0.8, rolled back and reprocessed the 37 blocks, required validators and RPCs to upgrade, and replaced the floating-point formula with an integer-only formulation
(e) Current status
Consensus resumed on May 22 2024 and the chain returned to a stable recovered state
(f) References (optional)
(Source: May 21 Outage Report)
Blockworks note: Chiliz Chain has not experienced a theft or loss-of-funds exploit affecting CHZ. The material incident on record is a chain outage on May 21, 2024 tied to the Dragon8 hard fork. A floating-point implementation in the inflation formula produced non-deterministic results across validator architectures, the nodes stopped synchronizing, and the chain halted after 37 post-fork blocks. Chiliz restarted the chain with client version 2.0.8, reprocessed the 37 rolled-back blocks, and returned the network to a stable recovered state on May 22, 2024.
(Source: May 21 Outage Report)
Material Risk Factors (Regulation, Technology, Token Economics)
Describe material risk factors across the three categories below. Each category includes prompts to address at a minimum.
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(a) Regulatory, Legal & Tax Risks — Describe how evolving laws and regulations could affect the project by answering, at a minimum, questions like:
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Impact of Regulatory Change on TGE and Listings: (If applicable) How could evolving or conflicting laws and regulations affect your ability to complete the TGE, deliver tokens to purchasers, and list or maintain the token on trading venues in key jurisdictions?
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Entity-Level Regulatory Impact: (If applicable) How could regulatory or legal changes impact your core entities (Foundation, DevCo, DAO, affiliated service providers), including enforcement actions, licensing requirements, or forced changes to structure or operations?
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Tokenholder Tax Treatment: (If applicable) What uncertainties exist around how tokenholders may be taxed, and make clear that tokenholders are responsible for understanding their own tax obligations?
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Jurisdictional & User Access Restrictions: (If applicable) If the project restricts access for certain jurisdictions or user types (e.g., U.S. persons, sanctioned countries, retail vs. professional), what are those restrictions and what risks do they create for users and for the project?
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(b) Protocol, Technology & Security Risks — Describe risks to network and contract reliability, correctness, and safety by answering, at a minimum, questions like:
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Bugs and Design Flaws: (If applicable) What bugs, design flaws, or implementation errors could exist in your core protocol code, smart contracts, and any bridges, rollups, or oracles that you depend on, and how could these lead to loss of funds or disruption of the protocol?
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Security Measures & Their Limitations: (If applicable) What security measures have you taken (audits, formal verification, bug bounties), and what types of failures might these measures still fail to detect or prevent?
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(c) Token Economics, Unlocks & Incentive Risks — Describe how the token's economic design and supply schedule could affect holders by answering, at a minimum, questions like:
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Critical Economic Assumptions: (If applicable) Which economic assumptions (e.g., staking yields, fee revenue, liquidity incentives, MEV capture, demand for blockspace) are critical for protocol security, utility, and governance, and what happens if those assumptions fail?
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Governance Control over Monetary Policy & Rewards: (If applicable) To what extent can governance change monetary policy, fee parameters, or reward allocations (e.g., inflation rate, treasury flows, incentive programs), and how could such changes adversely affect tokenholders?
(a) Regulatory, Legal & Tax Risks
The Chiliz Group Limited is seeking admission to trading of CHZ on MiCA-compliant platforms in the European Union, and Socios Europe Services Limited received MiCA authorisation as a Crypto-Asset Service Provider from the Malta Financial Services Authority. Outside the European Union the project is not targeted at United States residents. Users must not be subject to sanctions or anti-money-laundering or terrorist-financing restrictions and are responsible for complying with local laws. The legal landscape for crypto-assets is evolving and can affect the use, trade, taxation, and legality of crypto-assets and related services.
(Source: Chiliz White Paper v1.1, MiCA Milestone)
(b) Protocol, Technology & Security Risks
Chiliz Chain is a Proof-of-Staked-Authority chain whose security depends on validators, staking participation, governance-driven client upgrades, and audited core contracts. Validator misconduct or downtime can lead to jailing or slashing. A network outage occurred on May 21, 2024 after the Dragon8 hard fork when floating-point logic caused validator desynchronization, and later upgrades such as the Snake8 hard fork required validators to upgrade their nodes or lose the ability to participate in block production and consensus. Core contracts have been audited, with coverage of the governance contracts, the bridge, the Fan Token contract, and tokenomics, and the audits do not eliminate all smart-contract, consensus, or operational risks.
(Source: Chiliz White Paper v1.1, Security Audits, About Validators, May 21 Outage Report, Snake8 Hard Fork)
(c) Token Economics, Unlocks & Incentive Risks
CHZ moved from a fixed initial supply to an inflationary model introduced through Dragon8 and later updated through Pepper8. The inflation rate starts at 8.80%, declines over time to a 1.88% floor after 14 years, and is allocated 65% to validators and delegators, 10% to the Community Vault with liquidity-provider and shared-security restaking rewards, and 25% to Ecosystem and Operational Distribution. Validator-approved proposals can change monetary and consensus parameters, including the Pepper8 supply adjustment for the Paribu transition and the Snake8 block-selection algorithm that ties validator block-production probability to delegated CHZ. The protocol burns the majority of accrued gas fees at the protocol level, so tokenholder outcomes depend on the balance between inflation, burn dynamics, validator incentives, governance-approved parameter changes, ecosystem spending, and onchain activity.
(Source: Tokenomics, Dragon8 Proposal, Pepper8 Proposal, Snake8 Hard Fork)
This Token Transparency Filing is provided for general informational purposes only and does not verify or warrant the accuracy of individual answers.
