Music DAO Deep Dives, Pt. 8: The vision behind Leaving Records' $GENRE token

By: Kevin ShawRaul Guerrero

Published: 2022-02-26

This breakdown is part of an ongoing, members-only interview series focused on artist and label DAOs, as part of Season 1.5 of our ongoing collaborative research on music and Web3. The goal with this project is to make collective sense of the emerging, fast-moving ecosystem of music DAOs — not only giving structure to the current landscape and future possibility space for music DAOs from the perspectives of function, tech tooling and organizational design, but also identifying critical needs in the landscape that are still going unaddressed.

All interviews in these series are conducted and written by members of the Water & Music community, and break down a music DAO’s approach to community design and onboarding, tech tooling, governance, treasury management and more. Core contributors lead weekly, members-only research calls every Wednesday in our private Discord server to dive deeper into takeaways from these interviews.

You can read our previous installments here:

Leaving Records is an independent record label founded in 2007 that espouses an “all-genre” philosophy. It is based in Los Angeles, California and is known for community-driven initiatives like their free volunteer-run outdoor park events. GENRE DAO, a Web3 extension of Leaving Records, was announced on Mirror in July 2021.

For this project, we spoke to the founder of Leaving Records and leader of GENRE DAO, Matthew McQueen, about Leaving Records’ journey into Web3 with the formation of GENRE DAO.

Our main takeaways

On fundamentals, a.k.a. “why DAO”

Leaving Records has been in joint venture partnerships over the years with other record labels. At the end of 2020, Matthew severed a promo/distribution partnership and his A&R employment with Stones Throw, and reclaimed ownership of Leaving Records — a transition largely influenced by the potential Matthew sees in Web3.

GENRE DAO was officially announced on Mirror in July 2021, with a $GENRE token that was minted on Roll (whose CEO, Bradley Miles, has been a longtime supporter of the label). Unlike some other DAOs we’ve interviewed for this series, where the DAO/Web3-native side is legally and operationally separate from its Web2 counterpart (e.g. Topshelf vs. Sone), Leaving Records sees GENRE DAO as integral to the label’s business.

In particular, the DAO structure helps to bring more support and capacity to Leaving Records’ operations.  Matthew can now more flexibly hire personnel support for shipping, in-house PR, accounting, licensing, general management, community engagement and other activities that have historically been undermanned. That said, these are not traditional label hires; while GENRE DAO board members almost play the role of working at the label company, they carry much more autonomy and creative freedom than in a traditional label setting. Legally speaking, while GENRE DAO is directly associated with Leaving Records from an operational standpoint, the DAO does not yet have its own separate legal entity. Matthew sees the creation of a separate legal entity for GENRE as a possibility, given tax considerations for funding projects from the treasury with ETH and then converting into USD. Matthew says this open question likely needs to be addressed this year.

Leaving Records is trying to “redefine the model, approach, function and purpose of a record label.” Matthew has been following pioneers like Mat Dryhurst and Holly Herndon for quite a while and imagining possible industry innovations, but explains that it has only been in the last year-and-a-half that a more realistic experimental path has emerged. Matthew shared how the early experiments with GENRE DAO feel organic to the culture of Leaving Records and that synchronicity with like-minded organizations like Catalog inspire confidence that the Web3 landscape is a fitting space for them to build in.

GENRE DAO values:

The recent DAO journey has been creatively inspiring for the team, but Matthew also hopes it is just as hope-generating for the larger community as they gradually break down the traditional model that has separated artists and labels from the fans, with a blurring of those lines now in motion. An example of this is Jacqs La Vaca, a Day 1 fan, stepping into a community engagement role. GENRE has identified other fans for various roles and are hoping to integrate them soon. This has always been Matthew’s vision of utopia for record labels – music communities having the power to build their own community-engagement and revenue models instead of pandering to traditional Web2 models to make ends meet.

On community design and onboarding

At large, one can obtain $GENRE through airdrops, purchases on Uniswap or task completion via $GENRE bounties (the bounty board is currently a work in progress). Examples of $GENRE bounties include design and creation of promotional assets for Leaving Records, Web3-integrated site development, audio mixing and mastering services, demo review and analysis and street-team marketing. Matthew adds that the list really is limitless, and could include any range of low- to high-skill needs.

In Matthew’s mind, the ideal token holder is both artist and fan — though could also include influential values-aligned people in the industry,like a lawyer, publicist, promoter or distributor. There is, however, an inherent tension between limiting access and wanting an open-source community. Leaving Records has roots of wanting to get away from gatekeepers, so they are careful about using language and vocabulary like token “gating.” The analogy of accessibility is to consider the token like the mail-order membership fan club used to be.

There are three methods of compensation for DAO contributors: using $GENRE through bounty boards, ETH from the treasury and USD from Leaving Records’ traditional accounting system. Matthew sees this approach as a strength by having flexibility and accessibility with their compensation methodologies.

At the same time, the Leaving Records community has “a long way to go” with respect to Web3 Literacy, says Matthew.The Leaving Records / GENRE Discord server includes the community members with the most Web3 literacy; however, Matthew estimates that 80% to 90% of the label’s broader community are not Web3-literate.  Matthew is focused on educating the key artists in the community, with the goal of taking a balanced, organic and patient approach of providing information and context about Web3 and Leaving Records / GENRE DAO’s vision and mission.

Community onboarding strategy is something discussed quite often in GENRE DAO’s weekly board meetings. Lani Trock is a GENRE DAO co-founder and board member who will be very involved in a leadership role with community education and engagement, providing public forum calls, webinars and IRL meetups.

There has been some mild community pushback through concerns of money-grab speculation or cryptocurrency instability. There was also concern early on about blockchain’s environmental impact, but that has waned more recently due to gradual community acceptance of Leaving Records serving as a leader and pioneer in the music/Web3 ecosystem.

On finance, treasury management and the role of NFTs

The mission of the GENRE DAO treasury is to provide meaningful financial support for artists in the Leaving Records / GENRE community who are in need. The treasury is designed for the funding of impactful projects across their artist community, “such as but not limited to artist mutual aid initiatives, artist incubation assistance of creative projects and release campaigns and organizing an array of community-centered events digitally and IRL,” says Matthew. He is also excited about DAO-to-DAO partnerships with the purpose not just of promoting art and music, but also of furthering social aims like paying off artists’ medical debt or providing resources like health insurance, food, and housing.

GENRE’s treasury has been funded to date with NFT sales like GENRE’s Day 1 NFTs. The Day 1 collection provides utility to its holders in the form of access to its token-gated Tell.ie site, which hosts new and unreleased music as well as early-bird access to various merch and event drops, and select gated channels in their Discord server. Matthew is also optimistic that the community’s overall value will grow alongside that of $GENRE, unlocking more utility and financial value through community-driven projects to further bridge the gap among artists, fans and the label.  For example, Matthew leads a monthly DIY mastering workshop and masters community-submitted tracks live on Zoom; the most recent was simply dropped in the Discord server, but will soon exclusively be offered for $GENRE holders. There is also a soon-to-be-announced community-driven sample pack initiative that will serve as a repository of loops, sounds, field recordings and scripts that the community can access, create and mint from. Leaving Records is also assembling compilations from cassette demos and tracks submitted via the #plug channel in their Discord server.

Matthew referenced the synchronicity of discovering how Catalog listed a number of Leaving Records artists in their deck, foreshadowing a now-existing partnership that enables other experiments with $GENRE. Matthew estimates at least half of Leaving Records’ NFT sales have been on Catalog, and sees that platform as a great way to introduce artists to Web3 in part due to Catalog’s thoughtful onboarding approach with artists. As an experiment, planning is underway to designate $GENRE as an allowable currency for purchase of several NFTs. To execute, one would have to mint on Catalog and designate $GENRE currency for that NFT; also, the purchaser would need to hold $GENRE in their MetaMask wallet, connect this wallet to the platform and pay. The strong rapport with Catalog, and the existing liquidity of the $GENRE token, makes this experiment a possibility.

Matthew is confident in there being meaningful innovation and inspiring experimentation with NFTs moving forward with GENRE DAO, possibly leading to the formation of another treasury in a different (not yet determined) cryptocurrency. The aim of this second treasury would be to optimize for more accessibility for the community. GENRE DAO is also brainstorming the possibility of NFT vaults including the work of their community artists.

On governance

As GENRE DAO is still designing their governance system, there have not been any on-chain votes using $GENRE yet — only Emoji voting within Discord. Matthew shares how community decision-making is the No. 1 category of question he receives from DAO members, and is comfortable with GENRE taking a gradual process and not having a clearly defined roadmap. One consideration in the governance design is determining the weighting of holders of the ERC-20 $GENRE tokens vs. those of their Day 1 NFTs.

The community-driven projects listed in the above Fundamentals section (e.g. mastering workshops, community sound repository and cassette compilations), and possibly other art and community-driven creative projects, will serve as pilots for decision-making and governance design. Matthew shares how GENRE DAO feels it is important to pilot decision-making systems with art-driven projects first before finalizing the governance system with respect to the treasury.

Matthew has internal conflicts relating to the duality of being attached and not wanting to be attached to budget management and resource allocation. He has a 15-year history with Leaving Records and really cares about resources being directed responsibly to places and people; however, at the same time he also wants to participate in the future thinking of the idealized decentralized cooperative model, which ideally does not have decisions over resource allocation attached to one singular person or voice.

The GENRE DAO board, which is growing and evolving, has weekly Wednesday calls. There is a current priority to clearly define the roles of new team members. Currently there are seven to eight board members, all of whom currently wear multiple hats across categories like education, community engagement, project management and Web3 development. Recruiting DAO community members from Los Angeles is a priority for GENRE DAO, tapping into already diverse and values-aligned local communities.

GENRE DAO is looking to possibly implement Snapshot for on-chain decision-making, but they are still in the research and design phase when it comes to governance. Matthew is comfortable with taking an intentional, gradual and experimental approach with the governance system and does not have a prescribed roadmap. As a result of this slower pacing, at this juncture they have avoided major pain points with respect to tech solutions.

Although Matthew is comfortable and confident in the moderate pacing in designing and building GENRE DAO systems, he does cite that governance decision-making would ideally be a little further along than it is. That said, Matthew has no regrets in the experiments Leaving Records and GENRE DAO have conducted, having “thrown ourselves into the fire.” This has generated positive momentum and validation that the Web3 space is a great fit for the mission and culture of Leaving Records / GENRE DAO, which is taking a heart- and values-driven approach as their compass navigating this experimental space.