Chiliz, a blockchain-based sports token platform, is starting a $50 million incubator program called Chiliz Labs to target early-stage projects in the sports and entertainment industries. The program is backed by Jump Crypto, the investment arm of Chicago-based market maker Jump Trading Group.

Chiliz Labs will invest in Web3 projects that build on Chiliz's layer 1 blockchain. Chiliz expects to announce between eight and 10 projects building on the network soon, it said in an email shared with CoinDesk.

Chiliz, whose Socios.com flagship platform sells coins tied to top-level sports teams, such as soccer's FC Barcelona, Juventus and Manchester City, has raised $66 million in total funding, Crunchbase data show. Digital trading card company Sorare, which has deals with all five of Europe's top national soccer leagues, raised more than $600 million in funding last year.

Targeted projects could include those selling tickets in the form of non-fungible tokens (NFTs) or offering fan tokens similar to those on Socios, which fans buy to gain access to VIP experiences and the chance to vote on minor matters in the running of the clubs. Fan tokens have a total market capitalization of over $300 million and 24-hour trading volume of over $40 million, according to CoinGecko data.

"Chiliz has developed a unique solution to one of the most salient problems that sports teams and leagues face, which is how to sustainably and affordably scale their brands and maximize fan engagement globally," Kanav Kariya, president of Jump Crypto, said.

Still, such tokens have attracted criticism as being an attempt to separate fans from their money by making them think they are actually buying a stake in their favorite teams. That's rejected by Chiliz founder and CEO Alexandre Dreyfus, who said that demand is high, with fans seeking programs that reward their loyalty, comparing it with airline loyalty programs.

"Through these Web3 or digital membership program, teams can reach and 'own' their global audiences, audiences and fan communities currently only reached by social-media companies," Dreyfus told CoinDesk.

Chiliz blockchain is EVM-compatible (Ethereum Virtual Machine) and runs a proof-of-stake authority validation system. Its native token CHZ has a market cap of just under $1 billion.

Read more: Premier League Inks Deal With Digital Trading Card Platform Sorare

UPDATE (March 1, 17:14 UTC): Rewrites third paragraph to remove reference to competition between the two companies.