PSG starts Web3 initiative as new Chiliz Chain validator

PSG is set to expand its partnership with Web3 and SportFi by becoming a validator for the fan token blockchain Chiliz.

By becoming a validator for the fan token blockchain Chiliz, the French football giant Paris Saint-Germain (PSG) plans to expand its partnership with Web3 and SportFi.

The Paris Saint-Germain Football Club is the first major football club to become a blockchain protocol. The club plans to repurchase PSG tokens using the cash earned as a validator.

The club is marketing this initiative to establish a digital economy that can remain self-sufficient for the team and its fan base. The Chiliz Chain is the foundation for Socios, a platform responsible for issuing and managing fan tokens for more than 150 professional football clubs and sports teams.

Paris Saint-Germain was an early adopter of the technology and in September 2018, the club debuted its fan token on the Chiliz exchange. The club intends to investigate potential opportunities in the cryptocurrency, Web3 and SportFi domains, with Helgosson as the driving force behind these endeavors.

Animoca Brands, a venture capital business became a validator of Chiliz Chain’s proof-of-stake protocol in November 2023, following Chiliz’s completion of a red e-sign for its tokenomics model.

In addition to incorporating the transaction fee protocol burning scheme EIP-1559, Chiliz has created a new inflation-staking incentive mechanism for CHZ holders.

Helgosson stated that Paris Saint-Germain will use its revenue as a node validator to carry out PSG fan token buybacks from public marketplaces.

“We’re aiming to build a sustainable tokenomics model together where the club, because of our role as a node validator, can use the profits to buy back fan tokens and use them to reinvest back into the fan ecosystem.”

The validator and decentralized exchanges on the Chiliz Chain will automate the buybacks through smart contracts. The program aims to increase the funds generated by the club’s validator through gas fees and supply inflation, which will then be reinvested in PSG tokens. 

Helgosson says that the move is expected to provide rewards, new utilities, functions, products, and services that will benefit PSG tokenholders, sponsors and players.”

The club is interested in replenishing its token reserves to develop an economy that can support itself. Both Paris Saint-Germain and Chiliz are working together to organize a blockchain hackathon that will take place in the summer at the club’s famous Parc des Princes stadium.

The event aims to entice developers to create decentralized applications and solutions that include PSG tokens on the Chiliz Chain. According to Dreyfus, Paris Saint-Germain’s decision to become a validator may catalyze other teams to follow suit and better understand how the tokenomics of the ecosystem operate.

In terms of the drawcard, Dreyfus highlighted that Paris Saint-Germain is going to play an active role in the operations of the Chiliz ecosystem. This means that they will help to develop trust and attract a larger number of companies and developers.

Additionally, they will co-host hackathons with us at their stadium. Chiliz and Socios have been concentrating on developing products and experiences for the sports sector. Dreyfus believes that its protocol requires stakeholders from the space to take part in its governance and the operation of the protocol itself.

The founder of Chiliz has stated that his long-term objective is to have dozens to hundreds of validators, comprising teams from various sports organizations, nodes owned by fans, and cryptocurrency companies.

“This is a new income source for them, diversification, but also being part of the network effect brings value to everybody involved.”

Paris Saint-Germain’s action is expected to inspire other large clubs to consider becoming node operators. According to off-the-record conversations with Helgosson, PSG is ambitiously exploring a variety of methods to diversify income and products in the cryptocurrency and blockchain ecosystem.

PSG began actively participating in the Web3 ecosystem by investing in becoming an infrastructure operator of the Chiliz blockchain. PSG has investigated and launched several collections of nonfungible tokens, some of which provide holders with exclusive rewards.

Helgosson, on the other hand stated that the club aims to actively interact and reinvest with its Web3 partners. Helgosson did not disclose the specifics of the club’s investment or capital allocation for the Chiliz node-as-a-service agreement.

He brought attention to the fact that being a node validator is an essential component in the process of constructing a tokenomics model that is sustainable for the Paris Saint-Germain Fan Token ecosystem and Chiliz.