Breaking News / Commentary

Union announce partnership with crypto company Socios

Editor’s note: This piece represents the views of PSP’s current senior editors.

Philadelphia Union announced a new partnership with crypto company Socios last week, as did all of Major League Soccer simultaneously. The burgeoning blockchainers will act as the team’s Official Fan Loyalty partner – and given the Union’s eminently frustrating existing loyalty program, a change seemed to be in the cards.

As a company, Socios is only a few years old but is already a part of loyalty strategies for brands like Paris Saint-Germain and Leeds United – the Union join a notable list.

Said Max Rainovitch,’s chief strategy officer, “Joining forces with Philadelphia Union to explore what the best iteration of our blockchain-based fan engagement product will become is truly exciting. This partnership is going to have far-reaching positive impacts on our evolution and shed light on what the Socios fan engagement universe on the blockchain can be.” 

For those having trouble parsing the industry speak, here is some context.

What is Socios?


 “The idea is to own a fan token for your favorite team. It’s like a share (Editor’s note: not like a share of stock though, because a Socios “share” offers no rights of ownership). With a token, you can do some stuff related to your favorite team. You only need one, and like a share, you keep it. It will go up and down in value as an item of cryptocurrency, but for the purposes of voting in a poll or doing a quiz, one token is one token.

The cryptocurrency value, and the monetary value, are not small points. Every token has its equivalence in [dollars] written beneath it in the app. If you tap that, you get a graph of its value over various timescales. That value is affected by two forces, neither of which you control. One is the popularity of that token — if lots of people want a token for a particular team, its value will go up. The other is the value of Socios’ own Chiliz cryptocurrency, aka $CHZ, which is traded separately on crypto exchanges. So while your fan token’s value might go up when your team wins, $CHZ might drag its value down with overall cryptocurrency trends, or vice versa. A fan token’s value, then, is not driven by its worth as a fan token alone. Everything is built on top of $CHZ and its value in the wider crypto market.

That’s the layman’s description, but still a bit wonkish. Here’s an even more bare-bones summary.

Fans spend dollars for tokens. These tokens get fans access to games, quizzes, discounts, and fun activities (for example, pick the color of the goal keeper’s gloves for the next match or the design on the side of the team bus).

At its most basic, Socios is kind of like a digital Chuck E. Cheese.

Fans give actual money in exchange for tokens, just like Chuck E. Cheese.

Then fans can “engage” with the app, playing games of skill and chance, just like Chuck E. Cheese.

Fans can win more tokens by continuing to do this, just like Chuck E. Cheese, or trade up to bigger prizes or discounts on prizes or food by trading in tokens from other Chuck E. Cheese locations or simply spending more money. After all, fans can trade crypto in the Socios app to get other team’s fan tokens or more Union ones, or do so by spending more money and buying more tokens. In either case, this is how fans can become “more engaged” – just like Chuck E. Cheese.

Asked about this feature, Leeds CEO Angus Kinnear said, “[The Socios partnership] is categorically not about monetizing fan influence,” but also in the same interview explained that “professional football clubs are fundamentally about monetizing fan engagement.”

So, yes.

Money, taxes, et al.

Terms of this MLS partnership are scarce as yet, but fans at Leeds were given free tokens by signing up for the app. The initial value was only two pounds sterling, but after making an account and “engaging” in the app, fans were frequently offered chances to add more money in order to open other “engagement” opportunities (examples include new quizzes and small discounts on limited dollar amounts of merchandise).

Moving money onto a crypto platform isn’t just fun and games though. Just as it is in the UK, there are taxes to be paid when trading in cryptocurrency, and most traders are required to self-report gains, losses, and transfers. The threshold is $600 for reporting, but readers of this website surely know someone in their circle who has met that bar in Union-related spending.

To that end, it’s unclear if it will be Socios or the Union that will issue 1099s to these most highly “engaged” fans.

What is clear however, is who is making money off of this scheme: the owners and early investors in Socios and its underlying coin, called “Chiliz” (or $CHZ).

When Socios announced its partnership with UEFA in February of 2021, the value of the $CHZ was slightly more than $0.03. The only owners of $CHZ were investors who committed “$66 million through private placement. [T]here never was or never will be any kind of public token sale.

A week or so later, the still completely valueless token was worth 20x more.

A pool of secondary investors — newly “engaged” fans of various clubs around the world — bought their team’s coins. Since those coins are tied to the value of $CHZ, fan purchases created a marketplace for that cabal of early investors to cash out – to turn their Chuck E. Cheese tokens back into actual money.

The chart dips noticeably in the months that follow marketing partnerships as early investors do just that, taking their profits as the $CHZ coin makes its slow but determined way back to being worth absolutely nothing.

Who are these early investors?

Tracking them at all would be difficult, as $CHZ is based on Ethereum, a “de-centralized, open source blockchain with smart contract functionality.” In layman’s terms, it’s a great place to be anonymous and steal, launder, or otherwise obfuscate the source and/or destination of actual money – to say nothing of the fact that Socios is owned and operated in Malta, registered and regulated in Estonia, and sells tokens via an entity in Switzerland.

That’s quite the money trail.

If it looks like a duck and quacks like a duck…

There is no value in holding $CHZ without “engaged” fans.

The coin is worthless, as evidenced by the chart above. It had no value until UEFA convinced fans to become “engaged,” which UEFA only did after being paid to market the coin by Socios itself of course (and reports suggest that Socios takes 50% of the sales price of fan tokens to recoup their marketing dollars). And a share doesn’t represent a part of the club or league, a related company, a piece of art, a car, a building, or even a piece of paper.

A “share” in $CHZ is worth nothing but marketing “influence,” which is nothing.

Thus, as more and more people clamored for the chance to have their voice heard, $CHZ became something that could be exchanged for actual money – “a share of influence” that was now worth dollars, cents, and euros, but only to the people who invested early. For everyone else, the value keeps declining.

For those original investors and CEO, they’re laughing all the way to the bank.

All it took for their scheme to work was a few people telling a few other people, who told a few other people, and so on, and so on…


  1. Andy Muenz says:

    So basically, instead of getting loyalty points for going to games and watching road games on TV, we’ll get “loyalty” points for spending money on random shit that has nothing to do with supporting the team. Sounds like one more reason to stop supporting MLS and the Union.

    • I think that’s called a “gimmick”. I know nothing about the stock market but I do know what bullshit smells like. That being said I’ll probably be proven wrong.

  2. Great write up. I had seen some headlines about Socios not being worth anything, but you did a great job explaining that to me, a non-finance person. Thanks

  3. “The coin is worthless, as evidenced by the chart above.”
    The stock chart above looks a little like Amazon ’98-’02 back when they had a bunch of huge empty warehouses and were just selling books.
    Some crypto is clearly worthless – particularly meme tokens, just like some tech companies were in 2000s. (,,,
    Chiliz “is a leading digital currency for sports tokenization, powering the world’s first scalable fan engagement & rewards app where fans can buy & trade branded Fan Tokens as well as vote in club-focused surveys & polls.” (from
    I wouldn’t bet on it going to zero.
    But like Andy, I am not planing on engaging actively in it at this time either.
    Guess we’ll have to see what they come up with.

    • Chris Gibbons says:

      The difference between owning a coin and owning a share of Amazon is that owning a share of Amazon confers to the holder legal rights to everything the company owns: buildings, intellectual property, cash flows, and more. Owning a coin confers “influence.”

      Meme and tech bubble stocks were valued on “engagement” too, just like these coins, and were equally as worthless.

  4. Jason T. says:

    Also, anything that uses blockchain technology is horribly polluting for the real-world Earth, because the processing needed is so energy intensive. That, alone, is reason to avoid any of this.

    • It sounds like the largest environmental impact from cryptocurrencies is from the mining of cryptocurrencies. It would depend on how Socios, MLS, and the Union structure their NFTs. They could take a IPO approach where they have various releases of the NFTs and those are the only NFTs available.
      I am not an expert but this is just my understanding after reading a few articles over the years.

  5. Too funny…..

    “… all it took for their scheme to work was……”….. more marketing geniuses.

    IF it brings in more $ to buy players, AOK… don’t care but winning.

    Loyalty points were always a joke, anyway. Never collected them, total waste of my time.

    • The best use of my loyalty points was for my son to get a chance to escort the players onto the field at a game. My son likes playing keeper and nearly got to walk out with Andre Blake but a girl snuck into his spot and he ended up walking out with Kai Wagner. Well worth it.
      We’ve also been able to participate in the onfield activities at a few games. Those experiences are worth purchasing, either through loyalty points or NFTs.

      • Jason T. says:

        I like the loyalty points as they currently work, also. Near the end of last season, I took my daughter and upgraded to the Stadium Club with our points. Watching the playoffs from above, with players’ families all around, was absolutely awesome!

  6. BTW….

    This just reaks of CLOWN LEAGUE and Mr. Garber again.

    • BTW, Garber doesn’t make the decisions. He works FOR the owners. If people don’t like the decisions made by the league they should point their ire towards the owners (Sugarman, Paulson, Kraft, Hunt, etc.)

  7. Darth Harvey says:

    Can I just say that I LOVE the fact that you said at the top that this article DOES represent the views and opinions of senior editorial staff. Too often you see the opposite disclaimer.

    NFTs represent some of the dumbest and most hollow aspects of the late stage capitalism our society is in. This article cleanly and succinctly shows that, which is rare amongst the litany of Pro or anti-NFT think pieces out there.

    The Chuck E Cheese relation is perfect… “Give us your REAL money that works anywhere and we’ll exchange it for our fake money that we control the valuation for and only works here… Sorry Timmy I know the bouncy ball last week was only ten tickets ($1 USD) but now it’s 100 tickets ($10 USD) … better start pumping those quarters into Fruit Ninja!”

    I’m also reminded of the It’s Always Sunny episode of “Paddy’s Bucks” but in that episode the fake currency creators are bankrupted by that scheme. Due to the recent NFT and crypto crash that happened this week it’ll sadly only the affect the people that bought into the scheme not the people that designed it.

    Hodl in hell crypto

    • el Pachyderm says:

      This is funny and I appreciate. I do think we are on the verge of decentralized banking which will in turn be centralized by those whose grubby hands it is being decentralized from. I think BlockChain is here to stay and will only imbed in society and that is ultimately a good thinkg… I also think Web3 will change the way commerce happens and crypto- despite its volatility currently….is here to stay.

  8. Atomic Spartan says:

    Block chain is an environmental abomination, directly responsible for the most useless waste of energy and profligate proliferation of air pollution modern man has yet devised. And any enterprise that reserves actual value for investors who hoodwink others into “engaging” in an entity of little or no value is no better than a pyramid scam. A pox on both.

  9. OneManWolfpack says:

    I am a STH. I have loyalty points I use. I’ve read this article a few times, honest. I have no idea what this is. I somewhat get “blockchain”, “NFT’s”, etc., but I don’t understand any of this. I guess I’ll just wait and see if I can still use the points I have to check out the Stadium Club a few times a year or not. What limited knowledge I think I have of this – it does sound very dumb. “Hey, you know the loyalty points program we’ve had and have understood for years? Well, we are gonna break it and tell you something else is better.” Uh… sure…

  10. I like the Chuck E Cheese analogy

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