• What is happening at Props?

    We intend to discontinue the Props Loyalty Program in approximately four months’ time. During the four-month transition period, users of participating Props partner apps may continue to claim Props Tokens based on their Pending Props balances. Props partner apps can continue to provide benefits to Props holders for a reasonable period of time. After that, we expect to no longer be supporting the Props Loyalty Program, including the Props Protocol, and we expect to no longer issue Props Tokens. For the benefit of the Props Token community, we have made the Props Protocol open source and available to fork. You can find it here.

  • Why is this happening?

    Props Tokens operate in a highly regulated environment. Those limitations inhibit our flexibility and the speed with which we can adapt. As a result, we do not see a way forward, given our current circumstances, that would lead to the success of the Props Loyalty Program more generally.

  • Last quarter you mentioned NFTs - what about that?

    We will no longer attempt to develop NFT functionality or anything else for the Props Loyalty Program or the Props Protocol. We intend to end the Props Loyalty Program after the four-month transition period.

  • Why did you say staking was going live and now it’s not?

    We had built the staking incentives and voting product, but the regulatory constraints under which we operate led us to conclude that implementation would be impractical and time-consuming. We ultimately determined that the project was not viable.

  • What will the company be doing?

    Our first priority is to ensure that Props services for any user of the Props partner apps is not interrupted and that both apps and users have a transition period during which the Props Loyalty Program will continue to operate.

  • How can you shut down the Props Protocol? You said it would be decentralized.

    We are not shutting down the Props Protocol - we expect to no longer support it. The Props Protocol is still under our centralized control. We ultimately determined that our decentralization project was not viable within the securities framework. We have made the Props Protocol open source and available to fork. You can find it here.

  • There is language at the end of your SEC filings from Friday, August 13, 2021 regarding the exploration of strategic alternatives. What does that mean?

    We will continue to pursue potential opportunities that may help preserve value for Props Token holders, including trying to identify a party that would be interested in continuing to run the Props Loyalty Program. This is what we mean by exploring “strategic alternatives”. 

    However, we have not yet identified any viable opportunity, despite efforts to do so, and we are not optimistic that we will be able to identify one. Any party running the Props Loyalty Program in the future would face the same regulatory obligations we face now. If a viable opportunity isn’t found, the Props Loyalty Program will end in December. Even if we identify a viable opportunity, there is no guarantee that we would be able to complete the necessary transaction.

  • Can someone issue tokens in connection with a forked version of the Props Protocol?

    You would likely need to consult with a securities lawyer to determine what, as a legal matter, you would and would not be able to do with a forked version of the Props Protocol.

  • So what will the Props Protocol do?

    Five apps are whitelisted to earn Props Tokens, and their users accrue Pending Props through the Props Loyalty Program. The Props Loyalty Program functionality will be available to these apps for the next four months, although the apps are expected to no longer allow users to accrue Pending Props at some point. Each Props partner app will make that decision for itself, but the accrual of Pending Props will end approximately a month before the end of the continuous offering of Props Tokens (the SEC-qualified process that enables us to issue Props Tokens as rewards), to give users time to claim Props Tokens. We do not expect to whitelist new apps.  We do not expect to add additional functionality to the Props Protocol.

  • What’s the difference between Props Tokens and Pending Props?

    Pending Props are an accounting entry and are accrued by users of Props partner apps. These Pending Props balances allow users to claim Props Tokens if they meet certain conditions, such as holding a minimum balance, completing KYC/AML/identity verification and having an ERC-20 crypto wallet.

  • What happens to the Pending Props I have accrued in Props partner apps?

    Pending Props will be available to claim as Props Tokens for at least 120 days from August 13, 2021. During this period, users that have accrued Pending Props can claim Props Tokens after successfully meeting the required conditions. After that, we expect to no longer issue Props Tokens, so it is important if you want to claim Props Tokens with respect to Pending Props balances, that you do so promptly.  Partner apps are contacting users directly to share updates on in-app loyalty programs.  Here are posts from YouNow and Listia.

  • Can I still accrue Pending Props?

    Each Props partner app has the flexibility to pick the exact date that its users stop accruing Pending Props, as long as it is at least 30 days before the end of the continuous offering. Please check with the specific Props partner app of which you are a user for their exact date.

  • What happens to the Props Token after the end of the four-month period / continuous offering?

    Props Tokens will continue to be a digital asset in the world. We expect to no longer support the Props Loyalty Program, including the Props Protocol.

  • Will Props Tokens remain on non-U.S. exchanges?

    KuCoin de-listed Props Tokens on October 29, 2021. See this announcement: https://www.kucoin.com/news/en-st-delist-20211022


    We don’t know what other non-U.S. exchanges where Props Tokens are listed for trading will do. That will be up to each exchange to decide. At this time, Props Tokens continue to be listed for trading on OKEX and Gate.io.

  • Is there still a minimum amount of accrued Pending Props that I am required to have in order to claim Props Tokens?

    Yes. That amount has been set by each Props partner app.

  • Do I have to pay any fees to claim Props Tokens?

    Yes, gas fees will be calculated and must be paid at time of claiming.

  • I am a user of a Props partner app. What happens to my in-app benefits?

    Until further notice, the in-app benefits that are tied to Props Tokens and Pending Props will remain. At some point, Props partner apps may dissociate those benefits from Props Tokens and Pending Props. Each Props partner app will make its own decisions and its own announcements about that.  We suggest you contact the partner app for details.  YouNow and Listia have shared blog posts with their intentions.

  • How did you use the funds that you raised from Props Token Investors?

    We used the funds to develop product and services, research and development, marketing and business development, legal and accounting services, and general and administrative costs. We have publicly filed audited financial statements with the SEC for 2018, 2019 and 2020 and we expect to publicly file audited financial statements with the SEC for 2021 next year, when they are due.

  • What will happen to the market price of Props Tokens?

    We don’t know. The price is a function of many factors, almost all of which are outside of our control, and we cannot make any predictions about that.

  • I purchased Props Tokens on Republic but never claimed them. Can I still claim them by providing an ERC-20 digital asset wallet?

    Please contact support@props.xyz with all your specific information and attach a copy of your Republic / Props Purchase Agreement.

  • How can you stop the continuous offering before all 400 million Props Tokens in the Protocol Rewards Engine are issued as rewards?

    The continuous offering is the regulatory framework that allows us to issue Props Tokens as rewards to users of Props partner apps. Because we are phasing out the continuous offering, we will be obliged to cause the Protocol Rewards Engine to cease issuing Props Tokens.

  • Why can’t you just decentralize quickly so that the community can determine the fate of the Props Protocol and Props Tokens?

    Because we are conducting an SEC-qualified continuous offering, and would have to maintain that continuous offering in order to continue the Props Loyalty Program, anything we want to do that has a fundamental effect on the Props Token needs to be “qualified” by the SEC in advance. There is no guarantee that the SEC will qualify what we propose. This process is uncertain, takes an enormous amount of time and effort and involves significant costs and risks. We have determined that expanding the resources required to continue operating the Props Loyalty Platform while attempting to navigate the regulatory process in order to achieve decentralization is no longer feasible, given the constraints under which we operate. However, the Props Protocol is open source, so that anyone who wants to fork it is free to do so.

  • How will you deal with the Props Tokens that have not been offered to the market yet, like the tokens held by the team and that remain in the Protocol Rewards Engine?

    We intend to stop the Props Loyalty Program in December and, at that time, cause the Protocol Rewards Engine, which mints Props Tokens and issues them to the participating apps, to stop minting and issuing Props Tokens. At that point, no additional Props Tokens will be able to be minted or issued. Props Tokens held by the team and in the company’s treasury are expected to be frozen. We expect that their value will follow the value of other Props Tokens, potentially down to zero.

  • Can we expect someone to assume control of the Props Token?

    We have not identified a party that has a viable plan to assume control of the Props Token, although we are continuing to look for such a party. Anyone who did so would also need to assume our reporting obligations to the SEC. They would also likely need to assume control of the Props Protocol, which governs the Protocol Rewards Engine, as the Protocol Rewards Engine mints new Props Tokens as rewards to users of partner apps.

  • What do the founders have to say?

    We are profoundly grateful for the support of the community. We struggled mightily to make Props Tokens and the Props Loyalty Program commercially viable, hoping it would grow and grow. We are saddened that regulatory conditions have let us and our community down. We have been fully aligned with the community from day one, and have put in place a 4.5-year lock-up on the core team’s Props Token holdings. As such, the founders and core staff have not sold a single Props Token since the beginning of the project in 2017.

  • Have other questions for the team?

    Please submit your question here.  The team will continue to update the FAQ.