The US Securities and Exchange Commission (SEC) has approved a new method for content creators and app users to leverage their use of a particular digital application.
The digital token – Props – was introduced today at the VidCon video streaming convention in Anaheim. It can be used by any app that joins the Props blockchain network to create loyalty programs that incentivize use of an app by exchanging the tokens for various promo items and discounts.
It is the first such token to be approved by the SEC under its Reg A+ rule, and is seen by the regulator as a utility token that provides a stake in the various apps that could join the Props network.
If successful, the YouNow/Props concept could potentially be used by other companies seeking to incentivize users to support their apps and networks. Existing platforms like YouTube and Instagram share advertising revenue with streaming content creators, but don’t offer a financial stake beyond that.
The Props digital token is seen as a way to provide influencers with ownership incentives in growing their networks using the participating apps.
YouNow, a blockchain-based video streaming app that spun off the Props token and helped develop it apart from its own platform, is the first on board the Props network. It will soon begin distributing 187 million Props tokens to its streaming video users and creators.
The ethereum token will be used on YouNow for in-app activities that “drive community engagement,” a tactic aimed at content creators that create videos to stream on the app. But users will also receive token compensation for engaging with the content. The tokens can be used for exclusive items and discounts, and can amplify the value of Bars, a YouNow credit system already used within that app.
The concept also provides a way for Props holders to have a stake in the overall Props network’s development. As the Props network grows, future demand for the tokens may rise, creating a way to profit from holding the tokens. Of course, that potential future depends on adoption and demand, as with any app, and the SEC will be watching closely to make sure that companies offering the tokens don’t inflate their potential value or overstate the potential compensation from participation.
At launch, each Props token was valued at $0.1369. They currently can’t be exchanged for fiat currencies, but Props is working on alternative exchanges where users may be able to trade them. There will be a finite supply, with one billion Props ultimately available before no more can be created. There are 600 million currently in existence.
Investors backing the Props concept include Union Square Ventures, Comcast, and Venrock, among others. The investors have purchased $22 million of the Props tokens, with the proceeds from that sale being reinvested by Props in various financial instruments or held as cash.