This is a web version of our weekly Discord digest, which is designed to aggregate the most important conversations and resources being shared on the Water & Music Discord server, so that you don’t miss out on anything important.

If you’re not on our server yet, please take just five seconds to authorize the Memberful Discord bot, which should automatically give you access. We have indicated members’ Discord handles with an @, and specific channels with a hashtag (#). If you want to find particular members, log onto the Water & Music server and type their names into the search bar.

First shared by @fascinated on #web3

As the uncertainty of crypto deepens and prices fall, criticisms of every aspect of decentralization, Web3, NFTs, and their viability have become more focused. While the effects of the downturn have been particularly intense for crypto, it isn’t the only market suffering; everyone from fashion brands to streaming giants like Netflix has experienced falling share prices. Even so, as the cyclical mantra “crypto is dead” reemerges, many argue that the underlying value proposition for Web3 technologies hasn’t changed and, frankly, won’t.

We discussed the dreaded bear market on #web3 and in our weekly town hall; below are our main takeaways from the community discussion.

A prevalent crypto-optimist stance asserts that “bear markets are for builders” — namely, the downturn is a necessary evil and ultimately healthy for the Web3 ecosystem, flushing out lower quality projects and giving higher quality projects breathing space. We wondered whether market conditions wouldn’t have a particularly adverse effect on the (arguably still recovering, post-pandemic) music industry.

As @basgras wrote in his newsletter on the subject, some of the most harmful effects of the market downturn will likely be cultural — specifically, we may see an end to the reciprocal ‘artists supporting artists’ culture, which has defined many music Web3 circles, as the cash dries up and market conditions become harsher:

“tl;dr: it will be a productive time, but I’m worried about the collapse of the artists supporting artists narrative due to lower disposable income. might feel like suddenly nobody has anyone’s backs when it comes to NFT sales. I don’t think that’s a bad thing, but it may affect social aspects of the space” — @basgras

“I think a lot of people (read: artists) don’t realize how much of their web3 audience is other artists, and I too foresee a shift in the way folks will move in these times. Anyone who launched from the beginning of May until now is fighting an uphill battle but anyone who makes it through will definitely reap the benefits of that battle.” — @BlackDave

Bas has written previously for Water & Music, arguing that the most exciting and durable applications of music and Web3 will be social and cultural (rather than purely financial). Hence, anything that could impact this unique culture is a cause for concern. Additionally, Web3 provided a less cut-throat, more egalitarian version of the music industry for artists and industry professionals alike. If Web3 begins to replicate the same scarcity mindset of the traditional music industry, it’s difficult to see how its culture will emerge from the downturn unscathed.

Amid harsh market conditions, Web3 builders will have to focus on product-market fit if they want to survive the incoming crypto winter. As we’ve previously covered, during the gold rush Web3 was inundated by an influx of similar-sounding platforms, with unclear (or downright scammy) value propositions. Observing what gets built over the coming weeks and months could get interesting.

“[It’s] the best time to build, without the constant hype stories dropping every day, but it will make positive narratives harder to tell. Then again, it makes everything a lot more genuine too. As ever, nuance on the way up and on the way down is king.” — @danfowler

3 key takeaways from Friday’s town hall

Last Friday, we devoted our weekly town hall to discussing our feelings on the bear market, and whether it’s changed our outlook on music and tech — especially music and Web3, which seems to have been the hardest hit.

Here are three key takeaways:

The market downturn isn’t specific to crypto

While the effects of the bear market have been theatrical for cryptocurrencies, more traditional tech companies are certainly not immune from the current market downtrend.

Our community shared stories of hiring freezes, deals collapsing, and general cash-hoarding by businesses across the board. However, it isn’t all doom and gloom — there was a general sense within our community that, while the market may look bleak in the short term, it may bring long-term benefits, including increased diversity, and making space for a renewed focus on product development in Web3 startups (rather than simply riding the hype-cycle).

Several participants pointed out that since NFT/token prices (typically cited as one of the key barriers to entry for Web3) have plummeted, now is the ideal time to onboard fans who couldn’t afford the price of access to Web3 projects otherwise.

Alternative blockchains may have their music NFT moments

Ethereum has been one of the most notable casualties of the bear market, with prices slumping below $1,000 in June. While that protocol has dominated music NFTs thus far, our most recent NFT market update suggests that other blockchains (particularly blockchains with lower gas fees, like Polygon, or more environmentally friendly blockchains like Tezos and Solana) could have their time in the spotlight.

During our town hall, several of us attested to the unique music culture that emerged around these alternative blockchains, indicating that they could be critical to keep an eye on.

It’s still unclear how the downturn will affect Web3 music in the long term

Discussing whether market conditions will affect the future of Web3 music led to a pretty clear split between the community. Namely, we couldn’t decide whether Web3 music is a distinct cultural movement, or if that phrase is as redundant as “MP3 music” or “CD music.” The fact that such existential questions about music and Web3 are still top-of-mind suggests how in flux the future of music and Web3 is.

In a sense, the newness of DAOs and Web3 artists and companies building around music NFTs provides a front-row seat to assess their resilience and either debunk or solidify their viability. As the looming prospect of a prolonged crypto winter shakes the theses of decentralized finance, NFT communities, and everything in between, only time will tell if Web3 music is “going to zero.”

If you are brave enough to weather the bear market and drop a music NFT, @fsqofficial has offered us some practical tips on how to make sure your crypto-native bop doesn’t miss out on that sweet Shazam discovery mechanism:

“My unsolicited advice to any web3 artist – is the same as I would give to “Bandcamp only” artists – make sure to use TuneRegistry (or similar service) to at least deliver audio to the metadata services like Tivo, Gracenote, etc so that audio fingerprints can be made, thereby making the audio identifiable on Shazam and other content ID services.”

Do you have any other hacks for maximizing the impact of your Web3 music release? Drop into the conversation here.