Music NFTs: Trends and Platforms to watch

Web3 and its accompanying blockchain technology gives unheard of scope for users to express themselves and their freedoms. This new layer of the internet makes for an ownable and permissionless system - currently not available with the present version of the internet. One of the areas that this technology touches quite directly is that of artists and content creators. This article explores the trends and platforms to watch within the Music NFT space. The article is broken up into three sections. Namely, Social Tokens, Composable music pieces (stems) as separate NFTs and finally Web3 native creator tools. There exists many other topics to cover within this ecosystem. Some of these topics include decentralised record labels, revenue sharing models, curator ecosystems and songs as collectibles, among others. Understanding this will set you up in grasping the further ramification of this web3 technology and its effect on various economies - both in this domain and others.

Social Tokens

Social Tokens are set to revamp the entire economic incentive model between fans and artists. Content creators such as brands and artists can issue tokens to their community/fans. These crypto tokens are backed by the reputation of an individual and/or community. In addition to the reputation, it is also backed by the propensity and promise of valuable content creation. The issuing of social tokens strengthens the relationship between the content creator and fanbase in two ways. Firstly, fans are compensated for their support through access to the special content, events and features. As the token holders grow so too does the value accrued to the content creators. Secondly, with social tokens, fans can support creators and their potential to produce good work some time in the future. Think discovering artists before they become ‘famous’. Supporting artists ‘early’ is like providing seed funding to them. Discovering artists early now has a tangible value that can be captured. Supporting artists can also extend to revenue sharing. Creators are a new asset class and fans are the venture capitalists. We can now bet on up and coming? content creators.

Unlike NFTs, social tokens are fungible – i.e. interchangeable with each other. The creator can tier the ownership level and have different benefits for different quantities of tokens owned by each fan. The creator can also add benefits for the community members down the line, attracting more fans and greater demand. As the token accrues more value, content creators can then compensate themselves with this rise in value from their token. In addition, token holders - the fans, are now also co-owners of the artist and their work. In this way, the artists and fans’ incentives are directly tied together. The social token appreciates, everybody wins. This two way exchange allows for both the fans and artist to actively participate in the growth and success of their community and economy. Fans no longer are passive, but rather have a direct benefit in contributing and promoting. In some instances token holders get access to gated online communities like Discord. There they can brainstorm, contribute and vote on the direction of the artist and their work. This funding model allows fans being able to take ownership in the artists’ careers and creative projects, thereby incentivizing them to serve as ambassadors and evangelists within their social networks.

Rally is an example of a platform that gives creators and communities the opportunity to build independent digital economies with social tokens & NFTs. This empowers creators - Rally facilitates the creation of these economies. Further, Rally charges no transaction or platform fees. The Rally platform’s main purpose is to allow content creators to reward and engage their followers. Making for a tighter knit creator-fan relationship and incentive model. Platforms like these will be pivotal in facilitating and creating these creator economies - quick startups with minimal friction will be a key component for creators launching their social tokens. Considering platforms such as Rally it’s important that artists and communities remain platform agnostic. By doing that they do not fall into the trap of wrapping up a community to one platform, leaving little flexibility going forward. Maximum audience portability is a prize that should be guarded.

A music artist who goes by RAC launched his $RAC token with a retroactive airdrop to his most loyal supporters. The token ticker is, unsurprisingly, RAC. 25,000 RAC was split between 1,545 Bandcamp supporters (dating back to 2009). 25,000 RAC was split between 219 supporters who bought RAC merch. 200,000 RAC was split between 152 existing Patreon supporters. 14,000 RAC went to EGO token holders. 150,000 RAC went to Twitch supporters. At the time of writing the market cap of the $RAC social token is $1,440,062.

Fyooz platform currently powers Lil Yatchy’s Yachty Coin, and soon will add Lil Pump’s social token to the mix. The $YACHTY token sold out in 21 minutes, bringing in a total of $375,000. Fyooz sold off 25,000 Lil Yachty tokens or 25% of the entire supply at $15 each. Owning this coin will give fans exclusive experiential access. This includes surprise boxes prepared by Lil Yachty’s mother, which will contain some of his belongings, as well as the prospect of a video chat with Lil Yachty.

Social tokens open the playing field for artists to really be able to own their community and for the community to really own their artist. This mechanism does well in removing the friction heavy intermediaries, where take rates are large and ownership minimal. In artist-fan environments where the intermediaries are suffocating with large take rates, artists are forced to try and appeal to an ever broader audience in order to? earn. This affects the art and authenticity of the work. Where social tokens are concerned, the economics are set up in such a way that you only need a thousand true fans to hit the same earning potential as before. This is due to the friction of heavy intermediaries being taken out of the equation. This will invariably lead to more authentic art and a tighter artist-fan relationship.

Composable music pieces (stems) as separate NFTs

Music stems are audio files that split up an entire track into separate mixes. These typically include the melody, instruments, bass and drums. Working with music in this manner allows for a greater degree of flexibility due to being able to mix and match stems together in various combinations. Many producers work on their master tracks in this manner as well as when collaborating with other artists. Different artists would be responsible for producing different stems. This way of working and collaborating predates crypto and has been part of music production for many many years.

Artists can mint their individual stems as NFTs, giving buyers and other artists the opportunity to own a piece of the master track. With every Stem having variability, holders have the freedom to decide which version gets played. It adds longevity to the asset due to it being able to assume different versions of itself continuously. What could be popular or in vogue today could be switched out for different versions that could be in vogue tomorrow. This makes resale value very different to traditional NFT assets, which are largely static in nature.

Using stems in the music NFT arena opens broad possibilities for creativity and ownership. Async Art music , applies this concept to their Music NFTs by breaking up each master track into layers (stems).

(Source: Asyncart website )

Each stem is a separate, ownable NFT. Further, each layer has several versions available from which to choose from. The stem owner chooses which variant of their stem is currently active on the master track.

(Source: Asyncart website )

Stems within the traditional music landscape forms a large part of collaboration, sales and production. Some artists focus primarily on the sales of stems, whilst others share stems amongst each other with the vision of being able to collaborate on music pieces together with other artists. This is due to stems being a cornerstone of music production- some may go as far as saying it is a building block. This makes Stems NFTs primed to be able to capitalize on this already vibrant market. Both DJs and producers have practical uses for stems within their work flow. A brilliant aspect of this is that Stems and NFTs don’t need to create demand or create a market. It already exists extensively within the traditional music landscape. Stems as NFTs have now given more ownership and resale capabilities to an already active market.

Web3 native creator tools

Tooling within the creator space gives the scaffolding for content creators to bootstrap their web3 native work and economies. One can think of the tooling as frictionless onboarding mechanisms for new content creators entering the web3 economy. Having all tools and launchpad features ready and available in one place makes for a more convenient onboarding experience. Some of these tooling options include production, minting and promotions. Web3 tooling also ensures decentralization which is a core tenant and goal - albeit to different degrees, depending on the network.

Below is a map depicting which networks music NFT dApps and platforms sit on. This gives us a clear picture as to the extent of decentralization of Music NFT landscape.

(Source: Water & Music Website )

Arpeggi labs has an entire music creation tool, built natively on web3. This allows artists to compose and mint their music NFTs in one place. Arpeggi Studio can be described as the first fully on-chain digital audio workstation (DAW). CC0 stands for Creative Commons Zero, with this, producers can freely use and remix music samples from a library. CC0 libraries have also been added to Arpeggi Studio - allowing producers access to free use-IP music samples. The purpose of this CC0 sample library is to give artists easier access to material and make the barrier to entry low.

Song Camp is a virtual songwriting camp.. Song Camp runs month-long cohort projects called camps. Each camp brings together new artists, songwriters, producers and hackers from all over the world. Together, they collaborate on music, visual art, and culminates in an NFT rollout for all the creative output. All the collaboration takes place on Discord. Each contributor will assume a form of responsibility that covers either the song writing, visual art or NFT roll out. The process makes it easy for new artists to speed run their launch into Web3.

Web3 dApps outside of the creator native toolset are also important onboarding facilities that push forward Web3 growth. A broader view of various platforms and tools are depicted below.

(Source: Water & Music Website )

Web3 Native creator tools ought to be focused on developing native content and helping artists become creators within the web3 ecosystem. These have become possible with on-chain tooling, helping creators develop and release their work natively on Web3 without having to import or export files, thus streamlining their workflow. A one-stop shop from production to mint, ensuring that all parts of the workflow is done on-chain in a Web3 environment. Having tooling such as this will birth the first cohort of creators who will be comfortable with Web3, due to its ease of use and convenience and direct pathway to commercialisation.