A blockchain project aimed at bootstrapping a more equitable video streaming economy has raised $5 million in the pre-sale of a new token.
Announced today, Stream’s fundraising was led by Pantera Capital, with other participants including Blockchain Partners Korea, Coinfund, Fenbushi Capital, FBG Capital, Inblockchain and ZhenFund. Individual investors such as Stellar founder Jed McCaleb and TechCrunch founder Michael Arrington also contributed.
As is perhaps supported by the list of notable industry investors, Stream believes it can succeed where other similar ventures have failed.
Whereas past projects attempting to create blockchain-based video networks used existing networks, mainly bitcoin and ethereum, Stream CEO Ben Yu said he believes these failed as any value accrued by the application was not paid back to users.
“You lose out on the ability to capture the wealth accumulated by the economy,” he said.
In the case of projects, he argued that those who shared and exchanged video content were unable to reap the economic benefits of an expanding network, a roadblock he believes Stream’s token can overcome.
In this way, Yu said his project is simply taking a viable idea and applying a key ingredient: timing.
Yu told CoinDesk:
“If you’re trying to create a consumer killer application, you have to find something that has a similar flow. Live streaming platforms already feature currencies, but they’re doing it with arbitrary centralized cryptocurrencies.”
As such, Yu’s refrain may be familiar for those who have been following the space – that content creators are being unfairly compensated by the large video sharing services, such as YouTube, Vimeo and the like.
The goal then, Yu explained, is to move the video uploading and sharing capabilities to the protocol layer, thereby enabling a wider variety of services to access a reservoir of available content and compete on user experience and design.
Yu said this will change aspects of the video economy he views as unfavorable, such as the idea that today’s content creators often have to monetize via sponsorships.
“YouTube is a 100 billion [dollar] company. All these companies, Twitch, they are billion-dollar companies. We think there’s a better way around this,” Yu said.
Looking ahead, Stream is preparing a more formal token sale in November, one in which it will sell 33 percent of its token supply.
However, on day one, Yu and COO Simar Mangat said the company won’t immediately benefit from the proceeds. Rather, funds will be put aside in a smart contract, and released by self-executing code over time as a means of funding continued operations.
“We’ll get tokens over four years, but we start out with no tokens,” Mangat said.
Opening to the public sooner will be a Chrome extension that the company believes will enable early adopters to get a taste of its strategy by exchanging tokens.
More long term, Yu said, will be building the file distribution and storage networks necessary for a true decentralized video marketplace.
“That’s going to be one to five years out, but that doesn’t mean we can’t create something with imminent value.”
GoPro image via Shutterstock