The U.S. Securities and Exchange Commission approved a second blockchain company’s request to sell its tokens to the public on July 11, a day after breaking ground by greenlighting its first public cryptocurrency sale.
The SEC’s approval of live streaming platform YouNow’s Props token offering falls under Reg A+, which allows startups to raise up to $50 million in a public offering with fewer disclosures than a full IPO requires. Blockstack, a decentralized web platform for DApps, was the first blockchain firm approved under Reg A+.
But while Blockstack’s application took 10 months and the company said it spent $2 million getting its groundbreaking application approved, YouNow’s application was approved in just 23 days. (Of course, the firm spent several years ensuring its application would meet SEC requirements, Venrock Partner David Pakman, a VC investor in YouNow, said at the time of the filing.)
Instead of a token sale, YouNow will distribute the tokens on an ongoing basis to its 47 million registered users and video producers, the company said in a statement.
YouNow’s decentralized digital media ecosystem is a digital app on the Ethereum blockchain. The company created the open-source Props Network to develop an exchange token used to incentivize and reward content creators and users. DApp developers will also be rewarded with the tokens, which amount to an ownership stake in the Props Network.
YouNow users can earn Props tokens by creating content, supporting creators, and actively engaging with the app. “Based on their Props holdings, users receive unique benefits on the app, such as a daily stipend of YouNow’s in-app currency, increased in-app status, exclusive virtual items, and coming soon, discounts and other features,” the company said.
“Online video content made by independent creators has become massively popular, but still lacks diverse ways for creators to turn their content to a meaningful source of ongoing income,” said content creator and Props investor Casey Neistat, who has 11.4 million YouTube followers. “I’ve been working with the Props team as we share a similar vision, to help creators find ways to earn more value off of their passion for making videos.”
A similar system was created by blockchain-based streaming video platform DLive with its LINO token. That creator rewards program helped DLive attract the controversial but hugely popular YouTuber Felix Kjellberg, better known as PewDiePie. His decision to begin livestreams on DLive in April helped the platform sign up two million new users in his first month.
Following the SEC approval announcement, a second dApp creator, SplitmediaLabs, said it would bring XSplit game streaming software—which has more than 13 million users—onto the Props Network.
“By integrating Props into our apps, we become even more aligned with our loyal users,” said SplitmediaLabsCEO Henrik Levring in a statement. “Our users can already start earning Props when they stream to YouNow from XSplit.”
In addition, as more DApps join the Props Network, users will be able to use the tokens to unlock benefits across multiple apps, regardless of where they were earned, the company said.
Updated at 9:39 am on July 12 to reflect that YouNow’s Reg A+ offering was not an exchange token.
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June 11, 2020
