What is a music NFT?

A music NFT is when the artist mints a song's audio (and sometimes artwork) or video to the blockchain. These NFTs represent the authoritative ownership of the song or video on chain. Ownership typically does not extend to sound recording licensing rights (e.g. the right to license to services and collect royalties) though companies like Royal and Republic are tackling fractional ownership in sound recordings but that's for another post.

For a full breakdown on music NFTs I strongly recommend this article by Blockchain Brett.

Cool but can't I just listen on Spotify?

You sure can. In the same way you can "right click save" JPEGs or watch NBA highlights on YouTube instead of purchasing a TopShot. But, when you listen to music on Spotify you do not own it. In the same vein anyone can go to a museum and see the Mona Lisa but only one person can own it. Fine art has long had a history of patronage, with collectors investing to both support and see the value of their investment increase as the notoriety of the artist increases. Same concept.

Minting a music NFT (like most NFTs) is creating a cultural artifact. It is a irreversible written record of what occurred, who was there to see it, and who was there to support. Value is being brought back to the creation. Instead of needing to distribute their music to the largest audience possible for fractions of a penny per play artists can make a living by finding even a hundred fans who are willing to pay directly for their art.

Below are a handful of trailblazers in the music NFT space who have championed the wave and found themselves at the forefront of the movement.

3LAU

Any conversation on the rise of music NFTs would be incomplete without mention of 3LAU. A pioneer in the space whose roots go back to 2014, 3LAU was one of the first musicians to achieve commercial success through minting his music on the blockchain. In 2018 3LAU launched Our Music Festival, a one day music festival where attendees used their OMF Tokens to gain admittance and earn rewards like merch for completing various activities. Fans who found 3LAU at the festival could scan a QR code for 1 of 50 3LAU badges (foreshadowing the eventual success of POAP, a proof of participation NFT company). This festival was a roaring success selling out 8,000 tickets and validating the appetite from the community to lean into deeper fan experiences enabled by blockchain.

In March 2021, 3LAU sold a collection of 33 NFTs for a total of $11.7M. The NFTs included additional utility such as special edition vinyl, unreleased music, and custom songs at the owner's creative direction.

3LAU is now hard at work building Royal, a company enabling artists to sell fractional ownership of their sound recordings via Limited Digital Assets (LDAs) which are represented as NFTs on the Ethereum blockchain. These LDAs enable the holder to collect royalties on the track in accordance with their ownership percentage. The first of these LDAs was created for 3LAU's single Worst Case and were distributed as 333 tokens to winners of Royal's early access content. At time of writing the floor on OpenSea for an LDA is 9.8 ETH. The company recently announced a $55M Series A led by a16z and is expected to release more LDAs later this year.

Grimes

Grimes made a big splash in the NFT space earlier this year when she released a series of 10 pieces in February which accumulated $6 million in sales. Sold on Nifty Gateway, the pieces were sold as both editions with thousands of copies and one of a kind (i.e. 1 of 1) NFTs. Each work included Grimes' music and visuals.

Latashá

Latashá is a singer-songwriter, rapper, and performer who burst on to the scene when she started releasing on Zora earlier this year. While most artists on this list have leaned in to a combination of audio and static or gif style visuals, Latashá has leaned into releasing full length music videos. Latashá has minted 27 NFTs with her recent release of the music video for her song glo.up remix selling for 10.3 ETH. Latashá parlayed her success and commitment to building in public to a community success role with Zora where she often hosts panels with other artists entering the NFT space.

Haleek Maul

From the outside looking in, Haleek Maul's commercial NFT success (he recently sold an NFT for a then record $68k on Catalog.Works) seems to be at odds with his minimal streaming audience (~5,000 monthly active listeners on Spotify at time of writing). However Haleek's success is a testament to his commitment to connect with the web3 community and for their interest in patronizing one of their own. In addition to selling 4 tracks as part of his INNER EP, Haleek is currently using tokens to crowdsource funding for the remaining 4 tracks of his album. At time of writing Haleek had raised 28 of his 48 ETH goal.

Spottie WiFi

No list on music NFTs would be complete without the self proclaimed King of Punks, Spottie Wifi. Spottie named his rap persona after the freckles on his Cryptopunk. His debut project was a 7 track EP which came with a mystery mint. The NFT included sync rights for the sound recording and a redeemable vinyl copy of the record. The project sold out in 60 seconds, garnering $190,000 in sales. More recently Spottie released the song All Time High with Bun B the first of five NFT drops off his forthcoming collaborative album. Fans can purchase a token for each song which comes with unique artwork (some more rare than others). Fans who purchase tokens for each song in the album will be able to redeem a limited edition vinyl.

Dyl

Dyl, an active member of the NFT community on Twitter and in his Dyluminati discord, has looked at his NFT for his album "Crypto Rich Deluxe" as an opportunity to pack in utility for fans. Holders of the NFT gain access to lifetime tickets, merch, meet and greets, the physical album, NFT airdrops, and even a mobile game. By using the NFT to gate, Dyl has been able to hyper focus on investing back into his most loyal and monetized fans.

VÉRITÉ

VÉRITÉ has leveraged NFTs as a medium for experimentation and connection with her fans. Her releases on Catalog.Works and Zora have often come with redeemable add-ons subject to a reserve price being met (e.g. a price above 3 ETH = option to redeem an acoustic piano performance recording of underdressed.). Her latest release, "By Now", allowed the buyer to claim a percentage of future master recording royalties.

I can think of no better way for this post to come to a close than to leave you with VÉRITÉ's own words on the power of NFTs:

Many people are focused on the mass-market adoption of NFTs and how and when it will be catapulted into the mainstream, but I think this focus is misguided and ignores the mission to create equitable, decentralized ecosystems of like-minded individuals. What my experiments this year have shown me is that patronage is alive and well and NFTs are a tool to reinvigorate the ownership of music.