Currents: Web3 is dead. Long live Web3

This article is a web version of our biweekly, member-exclusive digest dedicated to our editorial and database updates. We break down and connect the dots among announcements of funding rounds, acquisitions, NFT drops, and other highlights in the music/tech ecosystem that we track as part of updating our suite of databases.

The name “Currents” is in line with the eponymous, read-only channel we launched in our private Discord server last month — in which our research team curates links to news announcements that shed light on the latest music/tech trends, often tying news to ongoing community discussions in the server. If you’re not already in our Discord server, please click here to authorize the Memberful Discord bot, which should give you access.

CHANGE LOG SUMMARY

Music/tech startup investment dashboard — We added $46.2M in new investments to the Music Startup Rounds and Adjacent Funding Rounds tabs in this dashboard, including:

• $3.7M for anotherblock, the Stockholm-based decentralized royalties platform, which counts Steve Angello (Swedish House Mafia) among its investors.
• $4M for Cadenverse, the decentralized music distribution and gaming platform.
• $2.5M for the label DAO Dreams Never Die, in a round led by crypto investor Polychain Capital. (We interviewed the Dreams Never Die founders as part of our Season 1.5 report on music DAOs.)
• $26M for Estonia-based NFTPort, led by Atomico and Taavet+Sten to build their collectibles marketplace.

Music NFT sales dashboard — Since our last biweekly digest, we have added 72 music NFT projects and 15 Web3 tools and platforms to their respective tabs in our dashboard, including:

• 42 drops on Sound for $362K in recorded sales (with salem ilese’s “Crypto Boy” bringing in $160K alone).
• 30 new NFT projects and series on various marketplaces for artists and festivals including Anyma, Songcamp/Headless Chaos, Mariah Carey, Primavera Sound, and Exit Festival, totaling more than $2.7M in new additional NFT sales in our records.
• Five new 10K generative and PFP projects, including Creature Hunters and Lil’ Hippo.
• 15 additional Web3 platforms and tools, including anotherblock, Digitama, and Onefan from Zaiko, and marking the move to V2 from Mint Songs, with their V1 product rebranded as Factory.

Creative AI for artists — We published part one of our creative AI tools report exclusively for members late last month, and are excited to be releasing part two exclusively for members later this week.

In the meantime, we’ve continued adding related companies and tools to the dashboard. Two notable additions include:

• Tonz.ai: Tonz uses AI and ML to resynthesize missing audio from recordings to upscale your take, making it sound like it was recorded on a higher-quality microphone than it perhaps was originally.
• Accentize: Accentize creates audio plugins that use AI and ML for tasks such as cloning reverb from one sound to another, automatic speed EQ, and removing reverb entirely from a recording or sample.

To suggest new tools for us to add to the database, please hop into this thread in our Discord server.

TRENDS WE’RE SEEING

Across the news we’ve been tracking in the last few weeks, we’ve noticed two general trends:

• Real-time shifts in web3 music release strategies, in line with the bear market.
• Increasing investments in metaverse experiences to cut through the media noise and reach fans, especially from hip-hop artists.

Web3 is dead. Long live Web3.

Ethereum prices dropped to their lowest point since 2020 this week, sparking conversation on the effects on NFT markets. Does a bear market mean it’s time to build and bring in a community previously priced out of Web3? Or will momentum drop as the hype around NFTs and their USD value head downward?

It’s certainly not the first time crypto has entered a “winter,” and many platforms and projects that moved fastest in the first wave of NFT hype emerged during bear markets. Still, we haven’t seen how the ecosystem as a whole will react to a dramatic dip since the NFT hype went mainstream. Here are some of our observations:

The slowdown in music NFT sales isn’t new

As we noted in our recent 2021 music NFT sales report, monthly music NFT sales in terms of USD-equivalent value have never returned to the peak levels they hit in early 2021. The one-of-one drops made some of the biggest headlines in 2021, such as 3LAU’s $1,333,333 sale of Gunky’s Uprising in March 2021. Our database tracked a total value of $17M for one-of-one music NFT drops in 2021, but in 2022 that number currently stands at just $3.1M year-to-date. Ethereum’s dip in USD-equivalent value as a whole will likely continue this trend.

It may be a great time for artists to bring new fans into Web3 at relatively lower price points

Though higher-value one-of-ones may have dropped off considerably, there are still consistently sold-out drops on popular newer platforms like Sound.xyz that have been building a curated collection for the last seven months, and where all drops are sold for .1 ETH (which currently under $100 USD equivalent). Meanwhile, Maelstrom’s Ensemble Mix generated $47,954 in March and Alexander 23’s “IDK You Yet” garnered $39,322 in April. Both averaged a unit price of $319.

There’s a gradual increase in “10k” projects

Some of the most famous NFT projects follow the 10k model – or 10,000 marginally different, generative avatars, à la Bored Ape Yacht Club and CryptoPunks. NFT platform OneOf (which has released NFTs with The Grammy’s, Oliver Heldens, and Pitbull) announced a collection of 10k generative NFTs called OnePass that feature on-chain and off-chain perks. The NFTs cost $250 or $350 each depending on perks attached. Meanwhile, French Montana announced an upcoming project including a 10K piece, which includes backstage access perks and even copyright ownership. Lil’ Hippo and TapeHeads also launched 10k projects recently.

We’re still seeing new investments in NFT platforms despite the market slump

Music NFT platform anotherblock raised $2.5M for its rights-sharing marketplace, and NFTPort, which calls itself the “Stripe for NFTs” (referencing the e-commerce platform), raised $26M in a Series A funding round. Funding came from the investment arm of the co-founders of Wise and Teleport, hinting that investments may not follow the same trend as crypto prices. Music NFT firm Cadenverse also announced last week that it raised $4M in seed money. These deals have likely been in the works for a while, so we may not see the impact the crypto dropoff will have on investments for several weeks or even months.

Overall, investments are still flowing, high-value one-of-one drops are slowing, and new projects are emerging. At the same time, the bear market represents the first major crash across the crypto market since before 2021 — a banner year for music NFTs — and there will almost certainly be changes in strategy and activity if prices remain below all-time highs for an extended time. With less liquidity in ETH, it may be more difficult to justify spending previously-purchased ETH on projects if one needs the liquidity to pay bills, or if one is waiting for the value to rise again. Then again, it could be time to accumulate NFTs at a bargain rate with relatively low gas fees.

Onboarding into Web3 through free NFTs

One way to avoid the impact of crypto’s latest dip is to give away NFTs for free. Many recent announcements include Proof of Attendance Protocol (POAP) and NFTs tied to event attendance, particularly as the summer festival season is underway.

• Primavera Sound, which took place in Barcelona early this month, teamed up with crypto platform Binance to offer attendees an NFT Mystery Box in the form of a POAP. Festival-goers could claim their POAP at Binance booths on the festival site, and the NFT gave access to perks such as activities and giveaways, plus the chance to win future tickets. Prizes at the Binance booths included a premium NFT offering backstage access.
• The New Mastersoundsand Color Red partnered with Lively and Blockparty on their first NFT drop, which was made available to fans for free. Holders of the free NFT will receive exclusive access to the group’s new single, “Watchu Want,” part of their new album “The Deplar Effect,” as well as a gated livestream performance and Q&A with the band.
• As part of its Spring Benefit, The Apollo Theater released a free commemorative NFT for its donors as “a digital keepsake celebrating the world-renowned organization’s largest annual fundraising event.” They distributed the NFTs via Ticketmaster, which is intriguing given that Ticketmaster has not acted as an “NFT marketplace” in the past to our knowledge.

As we’ve highlighted in previous digests, free event POAPs are common as major in-person events, festivals, and tours return from the pandemic pause. With artists now also offering free NFTs, it’s an antidote to both the dropoff in crypto prices, and a potential Web3 onboarding solution for curious fans not currently in the NFT ecosystem. We expect to see this kind of activity continue and increase in the coming months.

Hip-hop stakes more territory in the metaverse

In our research, we’ve identified an uptick in hip-hop artists experimenting with metaverse projects, leading up to our $STREAM Season 2 research on music and the metaverse. Considering how dominant the electronic genre has historically been across Web3 NFT projects (two-thirds of the sales in 2021 were in the electronic genre, by our research), it’s noteworthy to see so many hip-hop releases make a meaningful dent in the landscape now, including:

• Hi-Rez and Wiz Khalifa release Bye Haters in Decentraland
• Mount Westmore Releases New Album “Bad MFs” That You Can Only Listen to on the Metaverse
• Jim Jones and Migos Release A Metaverse Music Video In Decentraland

What constitutes a “metaverse project” is still a bit vague, and our upcoming report will help define that category better. In the past, we have covered immersive concerts such as Travis Scott’s concert in Fortnite. We followed various projects from Snoop Dogg, who made headlines in December when real estate next to his Decentraland plot sold for nearly half a billion dollars. But in the meantime, metaverse projects are still dominating the headlines and appear to offer artists an additional tool to cut through the noise and connect with fans, utilizing these rapidly developing platforms and technology.