A new decentralized finance (DeFi) model points to a persistent problem facing football clubs: short-term liquidity gaps caused by uneven cash flows from commercial and media contracts.
The Decentral protocol, hosted on the Chiliz blockchain, allows sports clubs and organizations to increase the liquidity of stablecoins by tokenizing future receivables, such as broadcast rights, and using them as collateral on-chain, according to an email announcement shared with CoinDesk on Monday.
Investors contribute capital to decentralized funds, while clubs gain faster access to funding without relying on banks or specialized funds that often charge high fees and impose strict administrative requirements.
Decentral will maintain an initial liquidity pool of $1 million in the USDC stablecoin, with a 90-day lock-up period and an anticipated APY of 12%, Chiliz said in Monday’s announcement.
Better access to capital
The approach speaks to a long-standing problem in sport funding.
Clubs often have valuable long-term contracts but struggle to meet day-to-day funding needs, especially outside of the sport’s most elite clubs. By converting that future income into real-world assets (RWA) on-chain, the model could enable faster settlement, greater transparency, and global access to capital.
RWA tokenization refers to the process of representing traditional financial assets, such as stocks and bonds, as digital tokens that can be bought, sold and traded on blockchains.
Alex Dreyfus, founder of Chiliz, said the development reflects “SportFi’s” shift from concept to practical utility, as blockchain infrastructure is used to fund the core mechanics of the sports economy.
Chiliz is one of the leading projects on SportFi, bridging the gap between traditional sports business models and blockchain technology. Historically, the most common use case in this sector has been the issuance of fan tokens, cryptocurrencies that allow their holders to speculate on the fortunes of a team while gaining access to exclusive rewards and experiences.
