CHZ, not Chiliz, could bear some good news amid bailout for FTX-affected users

• Chiliz founder brings up project plans to help some of its users affected by the FTX collapse

• Founder confirms the move resulted from the 37 million CHZ allegedly hacked from the exchange; CHZ volume, and network growth spikes

 Chiliz [CHZ] users who held the token on the now-collapsed exchange, FTX, might receive compensation from the project. The founder of the sports-based blockchain provider, Alexandre Dreyfus, disclosed plans around the same in a tweet on 13 November. According to him, Chiliz would provide 38 million tokens to some affected users.

SAFU: At @chiliz we decided to allocate 38M $CHZ to a public address (https://t.co/meidaHUPmS) to compensate up to $10,000 per @FTX_Official user that owned $CHZ on that platform last Friday. We will engage with the liquidator in order to facilitate this coverage over next weeks;

— Alexandre Dreyfus (@alex_dreyfus) November 13, 2022

Read AMBCrypto’s Price Prediction for Chiliz 2023-2024

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While revealing the plans, Dreyfus noted that each FTX user who gets chosen would receive $10,000. He also stated that Chiliz was waiting on its liquidator to confirm the user database and get approval from its liquidator. After this, the project would roll out the funds. In addition, Dreyfus clarified that funds would emerge from its treasury. 

Before the clarification, an Etherscan transaction bearing the name “FTX” containing CHZ tokens had surfaced. The founder noted that the decision to refund users was due to the loss of funds linked to the recent exploit on the exchange. However, he pointed out that the relief was for retail investors alone. Chiliz did not include affected institutional investors. Dreyfus said,

“The 38M $CHZ is the amount on-chain that was on FTX exchange in their wallet up to last week. This initiative will be only for individual users and not for institutions”

Since the announcement, Chiliz’s volume spiked 58% to $589.65 million in the last 24 hours, according to Santiment. This implied that many transactions had passed through the Chiliz network.

While the volume increased, CHZ recorded a downturn in profits for its investors. The Market Value to Realized Value (MVRV) ratio revealed this stance. As seen above, the MVRV ratio had dropped to -13.83%. This decrease meant that investors were far from making double their recent short-term buys. Hence, traders’ tokens had lost some value. Therefore, CHZ could go further down in value, with almost no sign of respite.

 Advancing ‘here’ though

On the bright side, CHZ registered a massive increase in its network growth. Based on Santiment’s data, the blockchain’s network growth surged to 2686. This meant that a substantial number of addresses had joined the network. This also implied that more investors believed in the project irrespective of the market conditions. 

Additionally, the CHZ-weighted sentiment abandoned the lows it recovered on 12 November. Moving up to 1.429 in that regard suggested that the token could fend off the bearish state in the coming days.

Source: Santiment