everwave: approaching music rights management from a collaborative aspect
0x5e20
May 23rd, 2022

This blog post is a brief overview of how we see music rights in web3 and more specifically, how we see music rights in the context of a DAO focused on collaborative music production.

With everwave, music is made collaboratively between people who, in most cases, don’t know each other. They have no existing agreements with each other, no pre-determination about how their rights as creative collaborators should be split, how those rights should be managed, etc. To avoid problematic situations caused by unjust exploitation or bad faith actors, we've worked to create a system that supports fair and equitable rights management of music created through everwave.

The everwave DAO acts as a central node for the rights management of all the music produced through our platform. Let’s try to break down the construction of a piece of music created through everwave, and see how this would play out:

The Musicians

Musicians provide the raw material that feeds the everwave creativity loop by recording their own original stems and uploading them onto the platform. It can be a bass line, a keyboard solo, a horn section, vocals, or any other musical element. We consider that these stems belong to the musicians who create them. They grant a free license to our DAO to use their elements in any way the DAO sees fit, relative to our tooling and creative workflow.

In return, the DAO rewards Musicians for their participation in a wave: they get to claim the Creativity Reward airdrop, as well as a percentage of proceeds from NFT sales and a share of exploitation through traditional music revenue sources. The everwave DAO is governed by its token owners: the Artists (our collective term for both Musicians and Producers), the fans, and any other token holders. Consequently, all Artists will be part of the governance and decision-making process, ensuring correct and fair compensation in return for the gratis licenses provided by Musicians to the DAO for their creative work. Instead of each person having to negotiate and manage their own rights individually, the community manages everyone’s rights collectively.

The Producers

Producers on everwave have a different role from Musicians. They are the ones who give shape and creative direction to all the stems that Musicians have contributed. Pulling from all the stems, the Producers choose what they would like to make use of and create their “versions”. It’s impractical to require each and every musical contributor to negotiate contracts and rights with each other every time they start an everwave collaboration. To address this, we’ve created a solution to rights management for a collaborative creative system that can both scale and retain its integrity.

On everwave, Producers use material provided by the DAO (through the gratis license agreed to by the Musicians) and create versions through a ‘work for hire’ type model where the hiring party is the DAO itself - which is governed by Musicians & Producers (the primary token holders). With this model, there’s no 3rd party exploiting creative work for their own benefit. We’re much closer to a collective approach to rights management, prioritizing fair remuneration to all contributing parties. As mentioned, the Musicians will own the rights to their own original stems, but the Producers will not own the rights to the versions they produce. Instead the DAO, which they all own a part of, will own these rights.

The DAO

We believe this is a new approach to collaborative music rights management, and an approach much more in line with web3 principles and DAO-style governance.

The everwave DAO will be the rights owner of the final creative products (the wave and the Producers’ versions). For the Musicians’ stem contributions, the DAO will have an unlimited license to make use of the stems, but will not own the rights to them. Our goal is not to expropriate artists from their creative work. Our goal is to find practical solutions for the management of collaborative work through a DAO structure, while keeping it fair and equitable for everyone involved. Here’s how we plan to achieve that through the everwave DAO using a hierarchy of governance levels and tokens:

  • The $WVE token
    This token represents ownership in the DAO, and consequently it also represents ownership over music that is produced through the DAO. Decisions regarding the DAO rules will be taken by a vote based on token ownership. At the launch of everwave, the founding members will define the initial system rules, but as the DAO grows, DAO members will be able to modify those rules however the community deems best. $WVE is also our utility token, used in-app when Musicians and Producers participate in a wave.
  • The Membership Token
    This token represents approved members - people who join the DAO, either as Artists or as Friends (non creatively-participating members). Every decision relating to how the community functions and flows will be decided by holders of this Membership Token. The only way to change this governance rule will be for $WVE token holders to collectively agree to a proposed change. Until such time, the Membership Token will be the governing token for all DAO activity-related decisions.
  • The Participating Token
    This token will be distributed to every member who participates creatively in a wave (Musicians and Producers). It will be used to identify users who are allowed to vote on decisions regarding the specific wave they are collaborating on (eg, when do we decide to close this wave?).
  • Ripple Token, or Address Whitelisting
    When a Producer’s version get selected by the everwave community and minted as a “ripple NFT”, the Artists who participated in this version will receive a Ripple Token. Every decision related to this specific version will be governed by the holders of this Ripple Token (eg, do we want to release this version on Spotify? On Bandcamp? Are we ok with a sync for a car commercial? etc…)

In conclusion, each of these governance levels works somewhat like a Matryoshka doll. A higher level of governance can change how a lower level is supposed to work, but once the flow is defined, only that lower level gets a say in how to govern its own specific elements (community, waves, versions…).

We believe this is an ideal way to structure the system in order to make it as fair as possible for everyone. There’ll always be loopholes, and in our case there’s an obvious one: what if the $WVE holders decide collectively from now on, the rights for the Producers’ versions should be administered not by Ripple Token holders, but by the whole community of $WVE token holders? With the $WVE token being our highest level governance token and thus defining ownership of the DAO, this could always be a possibility. That said, there are two strong arguments to illustrate why this is an extremely unlikely outcome:

  1. The Creative Reward pool, which goes to Musicians and Producers, represents 40% of the entire token supply. The founding members token allocation represents 18% of the token supply. This means that theoretically at least 58% (a clear majority) of the governance tokens will go to Artists and Founders, who both would have no vested interest in changing these system rules.
  2. If someone had enough financial resources, and if the possibility somehow presented itself (meaning more than half of the entire token supply being available on the market), a bad faith actor could theoretically try to purchase 51% of the token supply, and change those rules so that they get to then govern the rights of each Producer’s versions. That would mean mobilizing a substantial amount of money to take over a network for which, if you were to change its rules to a more centralized and authoritarian model, would lose its value proposition to creatives, and consequently most likely lose most of its users. Game theory gives a clear counter-incentive to such an intentionally anti-community action.

Considering this, we’re confident that our initial governance rules won’t be changed until such time that something even more fair and virtuous is proposed, and definitely not a change to something that would be detrimental to Artists.

everwave proposes a system for fair, equitable and fun creative collaboration that has a clear value offering for Musicians and Producers without having to concern themselves with negotiating rights and shares. We believe this is unique and much needed, and we’re excited to kick off this journey and see where it leads…

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