Chiliz - Crypto Academy S5W5 - Homework Post for @imagen
Hello to everyone out there, I would love to join Prof. @imagen to welcome each and everyone to the first week of this season. The topic for this week is Chiliz and I'll try my best to give detailed answers to the test questions listed. If you reach the requirements, you could join me to do same by reading up the lesson on this link.
1.)
Describe the Proof-of-Authority (PoA) protocol
The creation of the bitcoin initiated the first use of the blockchain technology. This advancement in the financial system has moved the world to greater heights today. Having a method of transaction that is permissionless and offers confidentiality to the identity of the participants. The bitcoin blockchain operates using the Proof of work consensus mechanism.
This algorithm involves its miners partake in a race to solve a puzzle in order to create blocks and receive rewards. This requires a large amount of computing energy which is quite expensive for an average individual. Although the platform was highly decentralized and secure, it suffered scalability as time went on.
Well, I must say the creation of all other consensus mechanisms was to solve a problem known as the blockchain trilemma, which states the inability for a blockchain to equally possess decentralization, secure and scalability.
This brought about the discovery and development of a concept called the Proof of Authority (PoA) by the co-founder of Ethereum, Gavin Wood. The PoA consensus mechanism tried to solve the blockchain trilemma but ended up losing out on decentralization. PoA is a permissioned consensus algorithm on the Etherium blockchain that demands and selects only trusted validators who are well known by the public to create its blocks. This doesn't mean only celebrities like Elon Musk or Ronaldo, it means an individual with an identity and good records in his or her country.
A person willing to become a validator will have to submit an application containing documents about himself as well as a clean sheet of criminal records. He should also be willing to invest some of his worth by staking on the platform. This means that the PoA is actually kind of alike with the proof of stake but it just modified the process by enforcing validators to stake their identity. This is actually smart because the system makes it difficult for a validator to commit malicious activities on the network. Of course, you won't want to try and steal from a community that knows everything about you. I'll try to explain how the PoA consensus mechanism affects decentralisation, scalabilty and security.
Decentralization:
Decentralization is the ability for a system to not be controlled by a central entity but governed by its users. We can see from the picture above that the platform has tried its best to provide an on-chain governance feature which allows users to air out their opinions and vote on them according to their holdings of the POA native token. The only set back is the fact that validator are selected and approved based on their identity, this makes it obvious that there is a central entity which investigates and selects this validators. This hereby reduces the decentralized nature of the platform.
Scalabilty: The bitcoin network presents low scalability because there are so many miners and since all the miners will have to be notified, it takes a longer to create blocks. Currently, blocks are created every 10 mins on the BTC blockchain. But the PoA has solved this issue with it's method of identification which lays out restrictions to become a validator. This hereby reduces the number of validators and enhances faster and cheaper transactions.
Security: The PoA is said to be highly secured because it is almost impossible for validators to partake in malicious activities. Here, no validator is hidden unlike other networks. If a validator happens to go against the rules, his identity will be tarnished and defamed to the general public and he will lose his stake on the platform. This makes validators act in the best interest of the network. For a network as secure as this, there is also a fault and this comes with a normal issue centralised systems face. Since there is an entity that selects this validators, someone with a lot of money can bribe some individuals in that entity to select malicious nodes or validators and this becomes a huge risk.
The PoA protocol Tokenomics
Currently, the POA token is ranked #386 with a marketcap of $129,730,042 and a circulating supply of 294,890,294.38. Its current price is $0.4399.
2.)
Who are the partners or sponsors of Socios.com
The socios platform is a platform which aids to facilitate the relationship between sport teams and their fans. It provides an avenue where fans can lay their opinions on what they think should happen in these sport teams. Looking at the use case of the socios platform we can easily say that its sponsors or partners will be sport teams.
If we load up the socios official website, towards the end of the home page will see a list of partners just like in the image above. Here we can see
- Football clubs
- Gaming teams
- and fight competitions
Clicking on the football clubs drop down menu, we can see a long list of football who support the socios platform and are seen to be partner. Here, there are football giants like
- Juventus (who were the first to partner with the socios platform)
- Paris Saint-German
- FC Barcelona
- Athletico Madrid
- AC Milan
- AC Roma
- Valencia etc.
Here are the gaming teams that partner with the socios platform
- OG
- Team Heretics
- Natus Vincere
- Team Alliance
- Team Vitality
We have the fight competitions which are
- UFC
- and PFL
Above are motorsport partners.
Cricket partners
Basketball team partners
Tennis team partners
American Football team partners
Finally, the Icehockey team Partners
These teams partner with Socios and earn some revenue and royalties depending on the value of their fan tokens.
3.)
Download and install the Socios.com application . Create an account. Explore the application and describe its functions. Show Screenshots (If necessary use a VPN if the application is not available in your country or locality)
Well, before you can download the Socios application, you will need a smart devices. For this question, I'll be using an IOS device to do this question.
When you load up the Apple Store, you will have to search Socios on the search bar. Once you see the application, select Get.
A confirmation screen will popup, asking to verified if its really the owner of the device that wants to install the application. Do as you are required on the screen. Here, I was asked to double tap with my power button and take a face ID scan.
After that process, the application immediately starts downloading, this may take a while, depending on your internet speed. You can now select Open to load up the application.
From the "Splash screen", click on Get Started.
You will be asked to input your phone number, your phone number would be used as a method of identification when logging in. Click on Send Verification Code
Unfortunately for me, I waited for so long and didn't receive the code, I even clicked the send again option, numerous times but nothing still.
I think from my explanation above, we have seen how to install and get started with the application
However since we can not access the application to review its features. I will just state a simple use case or functions of the Socios application.
The socios application like I said above is simply used to bond a relationship between fans an teams. This application was basically created for football use until other sporting platforms decide to join.
Fan base decision making: On the app, users or should I say fans can vote to influence the decisions of their clubs. This is just like the on-chain governance feature on any other decentralised platform. Voting power is determined based on the amount of fan tokens a user has.
Token hunt: Also, users are also granted the token hunt feature, which allows fans to locate and find coins at different locations in the real life world. Users can simply scan the areas with their smart device cameras and they will be notifies if a free token is around there.
Fan rank: Users who deliver the most support to the club by buying these fan tokens and engage themselves in the voting activities gradually rank up to the top. This is like a competition between fans and fans with high ranks are rewarded with free fan tokens and also given the opportunity to occupy VIP seats in the stadium during matches.
Coin Purchases: On the socios application, fans can also use the CHZ token to purchase these fan tokens and support their clubs. Since these tokens are still crypto currencies, they can still be withdrawn or exchange on various exchanges to other fan tokens if the fan has a change of mind about his club.
4.)
Make a purchase of the CHZ token for a minimum value of 10 USD from your verified account of the exchange of your choice. Describe the process. Indicate the ATH of the coin and when it was reached. Show Screenshots
For this question, I'll be using the Binance Mobile app to purchase the CHZ tokens.
After load up the Binance exchange, select the search icon, which is at the top of the home page.
Type CHZ in the search bar to locate available exchange pairs for CHZ. As you can see above, there are a lot of pairs, but I'll be using the CHZ/USDT pairs since we are making a purchase of 10 USD and above.
On the next page, you will see the price chart for the CHZ/USDT pairs, you can do your analysis and decide on when you want to make your trade entry here. Without wasting time, let's click on Buy.
Above, is the trade section for the pairs, you can use the order book on the left to select the price you buy at or rather just fill it yourself. For this trade, I will be buying with the market order. So, I will just fill the amount of USDT I want to purchase with and then click on Buy.
The image at the right hand side is the confirmation that I purchased 40 CHZ, which is valued at
$10.84 in the market.
This is a coinmarketcap page on the CHZ token. As I have highlighted above, here we can see the all high price of Chiliz which is $0.8915. CHZ reached this price this year on the 13th of March.
5.)
Enter the Chiliz Exchange and indicate the prices in CHZ and their equivalent in USD of the following Fan Tokens at the time of writing your assignment: FC Barcelona, Juventus and Paris Saint-Germain. Show Screenshots.
For this question, we will have to load up chiliz.net which is the official exchange of chiliz.com.
From the home page, I was so surprised, the FC Barcelona, Juventus and Paris Saint-Germain fan token prices were already listed as the first thing you would see once you enter the site.
Looking at the images above, the CHZ prices for these fan tokens are
- BAR - 29.8 CHZ
- JUV - 30.65 CHZ
- and PSG - 50.81 CHZ.
Making PSG currently, the most valuable among the three.
For the USD equivalent can spot them out below the CHZ price. We will still be using the screenshot image I uploaded above.
- BAR - $7.98
- JUV - $8.21
- and PSG - $13.62
6.)
How is the value of a club or team's Fan Token affected before and after playing a match? If the result is a victory, does its value go up? On the contrary, if it suffers a defeat, does its price go down in the market? Reason for your answer and present at least one recent example, preferably in the week between Sunday 12 and Saturday 18 December.
The value of a team's fan token will surely be affected by its performance in matches. This happens for two reasons.
Emotions: This occurs through the normal principle that when a team performs poorly, its fans will be emotionally affected and emotions play a big part in the cryptocurrency markets. At the point of a loss, there will be a reduction in the number of fans interested in buying this fan tokens and that's bad for the price in the market. There will be more sellers of the fan tokens than buyers and through the law of demand and supply, the price will have to come down. The reverse happens when the teams win, the joy of a victory stipulates fans interest in buying these fan tokens.
On the other hand, professional traders, who are not really fans but just trade these type of coins for profit will try to sell their coins because they know that a drop in price may occur because of a loss. This selling action reduces the tokens price.
Fan Token Burn Mechanism: For those who don't understand the burning mechanism, this is the process of specific number of tokens to be removed from the circulating supply. From our knowledge of demand and supply, this results in the scarcity of these coins hereby increasing their price. On the chiliz ecosystem, these fan tokens are burnt accordingly when a club scores or wins a match.
Just like we've seen in the screenshot above, for each goal scored by PSG, 10,000 PSG tokens are burnt and for each win 20,000 PSG tokens are burnt. This is huge and will affect the price of the token greatly.
Let's take an example, with the PSG VS MONACO game on Sunday, 12th of December. The game ended with PSG winning 2-0. From the token burn mechanism we learnt above, this means that a total of 40,000 PSG tokens were burnt.
From the chart we saw above, the PSG token token price increased because of the reduction in its circulating supply but later went into a downtrend due to the influence of the dip Bitcoin is experiencing.
For the next example we will be looking at this match, GALATASARAY VS SIVASSPOR. In this match, Galatasaray lost 1:0 to Sivasspor on the 13th of December and this resulted in a further reduction in its price due to the emotions of the fans.
From the chart, you will see that the GAL token experienced a huge drop in its price and this is because there were more sellers than buyers in the market due to the loss the team suffered on Monday.
The Chiliz protocol is a big win to the cryptocurrency ecosystem. With the introduction of fan tokens which can bring in a lot of people from the large pool of football fans around the world into the cryptocurrency ecosystem. Fantokens currently have a marketcap of $ 542,623,024.68.
Socios is growing into other sports competitive activities and since sports in general has a massive fan base, I believe the 500million we are see as the marketcap of the fan tokens are just a start to its growth.
Thank you so much Prof. @imagen for this interesting lesson.
Prof. If I may ask, is your name still @imagen or @image.. It's really confusing sometimes😅
My username is imagen, that word in spanish means "image" in english, that's the reason of your and every english-spoken person confussion! Don't worry
Okay... Thank you... Atleast that will save me from using wrong hashtags