Rewriting The Music Industry: Web3 Protocols, Marketplaces, and Fandom

This episode welcomes back David Greenstein, Co-Founder of Sound.xyz to talk about his vision for the future of music, Sound’s protocol, their new marketplace, and much more. I hope you guys enjoy our conversation.
This episode welcomes back David Greenstein, Co-Founder of Sound.xyz to talk about his vision for the future of music, Sound’s protocol, their new marketplace, and much more.

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Background

Mint Season 6 episode 22 welcomes back David Greenstein, the Co-Founder of Sound.xyz. We talk about his vision for the future of music, Sound’s protocol, their new 0% fee music NFT marketplace, and much more.

I hope you guys enjoy our conversation.

Time Stamps

  • 00:00 – Intro
  • 01:17 – The Current State of Music NFTs
  • 05:04 – Lessons David Learned Since His Last Time On Mint
  • 07:17 – What Can Be Built On Top of Sound?
  • 10:09 – If Spotify or Apple Music Were to Release a Protocol 10 Years Ago
  • 13:15 – The Goal Behind Web3 Music
  • 18:47 – Thoughts Around the Consumption Layer for Collectibles
  • 22:01 – Strategies Working For Artists On Sound
  • 24:45 – How Exclusivity is Created On Sound
  • 30:35 – Biggest Challenges Creating Sound.xyz
  • 37:48 – What’s Missing in Web3 Music?
  • 40:19 – What Will Take the Protocol to the Next Level?
  • 42:58 – “Web3’s Breakout Artist”
  • 46:20 – Thoughts For Web2 Artists Experimenting in Web3
  • 50:22 – Thoughts Around Secondary Sales of Music NFTs
  • 53:01 – What’s Next for Sound.xyz?
  • 55:33 – Outro

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Intro

David Greenstein, welcome back to mint. How you doing, man? Thank you for being on again.

David Greenstein: Yeah, it’s my first time doing a repeat episode. Figured there is no better place than mint.

The Current State of Music NFTs

Let’s go. I agree with you. There is no better place than mint. David, I think a good place to start because you’ve already been on, so if you don’t know who David is, go listen to the last episode. But I want to understand what is the current state of music NFTs from your perspective?

David Greenstein: Yeah, so I mean, the main thing is that there’s been no stoppage obviously, we’re, you know, in the middle of like, somewhat of a bear market. But there’s been no stoppage of on the artist side of artists releasing music, in fact, like we’re seeing, you know, like, for us, like all time, releases on sound. And we even did 11 drops in one day, this past previous week, which used to be that we did 11 drops in like almost a month or like, you know, 15 days. So, I think the one thing that’s been really, really inspirational, is seeing all the artists continue to release music, because so much of what’s been going on is not tied to any type of bull or bear market. It’s really about, you know, releasing music in a fun, creative and like autonomous way, which is, which transcends a lot of the kind of market conditions of web three. And I think it’s something that really excites me. So, I think, to be honest, like the state of music NFTs is extremely health, from the perspective of like this, people still collecting every single day on the sound site. And there’s more artists than ever, that want to release and create music NFTs, which is something that has been incredibly inspiring, not just to me, but the entire sound team.

And what season are we on right now for sound? Is it season four, season five?

David Greenstein: We’re on season four, I wonder how long will go. But we’re obviously like, you know, we just launched season four and really like the main kind of change there. As we start to, you know, one of the things that has stopped sound from growing a little bit faster as we did a Twitter space for every single new artist on sound, because one of the things that we wanted to do is really highlight every single story of these artists and, you know, really tell the stories of like, why they were joining, you know, sound and why they were putting out that song that day. And so, you know, as somebody who does, obviously, you know, podcasts every day, these Twitter spaces are usually 30 minutes to an hour. And so, every single day, we probably done several 100 of them at this point, I stopped counting a long time ago. But basically, we made the decision to like not do it Twitter space, every single new artist, which has had the, you know, the benefit of being able to slowly start to onboard more artists, which has been incredible. And that’s obviously like how we’re able to get more artists on sound. And this kind of sets the stage for the conversation today. 

But one thing we’ve been consistent about, since the day we launch is that sound has always been designed and you know intention to basically be open to as many people as possible. Because the tools and music NFTs for any artists, it’s not just for sub as like a selection of artists. And so, the first major step towards that was basically, you know, the protocol, which is there’s kind of two parts to sound canning open. One is access to the contracts, and, you know, the same smart contracts that power, you know, sound and we kind of revamp them which we can get into for this like, you know, protocol release. And then the second is like the UI and the front end of being on the sound website. And that one was even more even more nuanced. Because of you know, how do you discover all the songs, if there’s thousands being uploaded per day? How do you, you know, how do you deal with like content moderation, if somebody uploads a song illegally, that isn’t theirs. So really, just being extremely thoughtful around that. So that, you know, the goal, obviously, is to find set of ears for every single song and we want to make sure that we’re able to deliver on that promise. So, the first step in that direction was really getting these contracts, these new contracts open, so that everyone has the same tools to releasing great music NFTs in a really gas efficient, fun way.

Lessons David Learned Since His Last Time On Mint

Last time you were on, we recorded the episode during season two. So, two seasons have passed, you announced the sound protocol. Honestly, a very monumental update in the world of music NFTs. I’m curious, what have been some of your learning lessons from season two, since the last time you were on two now?

David Greenstein: Yeah, so I think there’s like a couple main reasons why we like, you know, revamp the contracts and kind of move towards the protocol. One is like, we started to move towards like, the song is like the atomic unit for music NFTs, and so we wanted every single song to be it’s own contract, and therefore its own collection, that was a way that we were able to get end to end secondary royalties across primary and secondary sales. It was also like artists today, we originally started with like artists contracts, but artists themselves are not contracts, songs are typically under the contract. And so, it made sense for us to focus on kind of the song as the kind of base unit. We also, like saw a lot of like, you know, people obviously talking about metadata and different mint formats, and it was really hard to like, predict, like, what are all the like, you know, like options that people are going to want. And so, we really crafted the protocol and like a pretty modular way, so that each of these components, whether it’s like a minting module, or metadata module, or payments module, can all be configurable to support different use cases based on the artist’s needs. And it’s all permissionless at the base layer. 

So, if you want to, like not use the sound metadata module, and you know, plug in your own metadata module, you’re more than, you don’t need to ask for permission to do that. Until really like, we think like, you know, these contracts are like are going to become the standard for kind of music NFTs because of how gas efficient they are. And because of how like configurable they are. And that’s kind of reflected in kind of, you know, what’s been going on with kind of the early usage today. So, I think like last, I, you know, was on upload, which was like last week, to deploy a song contract was about like $7 on Eth layer one, which obviously takes into account like gas fees today. But that’s pretty good starting point. So, I’ve been excited about.

What Can Be Built On Top of Sound?

I would agree as well. And I think with the introduction of a protocol specifically for music, I guess there’s also like, there’s a vision of what can be built on top of the protocol. And I’m curious, from your perspective, what are some applications use cases, ideas that you would love to see the community experiment with and sort of implement on sounds protocol?

David Greenstein: Yeah, so I think the main thing is like, something we’ve always said is like, what are the things that you can build uniquely today that like things like Spotify haven’t been able to build before and I think there’s always, the first thing that was really obvious is that, there’s always been this tension between artists, and you know, somewhat listeners, because from a listener perspective, a lot of people like going to one place to discover and find new music because there’s a single destination for discovery, but artists oftentimes want to do custom websites or custom drops or have their own brand and that’s really hard to build, tooling that supports all those you know, custom drops and experiences because you just can’t think of all the possibilities and that’s also part of the fun of this and also from a more like a collector perspective, it might be more like intimate to purchase on artists website because it feels like you’re purchasing directly from them. But if you don’t even know about an artist in the first place, then there’s obviously a lot of value because of the you know, the buyers that are coming to sound every single day to just go to discover new people, so how do you help an artist like really engage their existing audience, but also how to help artists like continue to grow their audience and right now it kind of, you know, feels like you have to choose and so the first initial use case was basically to like let artists do drops on their own website, which was kind of a trend that we saw, kind of you know, happening and you know, artists want to have their own brand their own control. 

And so, we launched the protocol with like Reo Cragun in partnership with, who I know has been on the podcast as well. And basically, Reo did an album drop on his own website, own domain, but then it also existed on sound, you know, before and after the drop for like playback purposes. And so that’s something that I think has been really, really inspirational kicked off, a slew of them with like Daniel Allen, doing a remix album, Connie Digital’s did the same thing. Aman who obviously works at sound, did an incredible job for her song surrender on bonfire as well. So that’s been like one of the like, clear used cases so far. And then there’s a few more of the music NFT applications, that are starting to build on top of sound as well in terms of like doing other like, you know, forking like or doing a different mint experience that exists on sound and then having the audio live on sound afterwards. And then one of the things obviously, you know, that I think will be happening are like what are the other types of like audio minting that can be done that isn’t necessarily on sound today. So, I think for people looking to do audio smart contract creation. I think these contracts are the most cutting edge for obviously being able to mint music NFTs but I think applies to more audio or any form of audio NFT more broadly.

If Spotify or Apple Music Were to Release a Protocol 10 Years Ago

I want to do in hypothesis or another hypothesis, a hypothetical situation, okay, for a minute. Imagine Spotify or Apple music were to release or had released a protocol, like, let’s say, 10 years ago for the music industry, what do you think the music industry would look and feel like today?

David Greenstein: I think you’d see a much more multiclient world, where there’s so many other ways to discover and support music outside of the mains, you know, Spotify application, I think that’s kind of like, like the opportunity set that kind of exists today is like, it’s very, very hard. In fact, I can’t really name one, I don’t know if you can, but like about 1/3 party application that’s built on top of Spotify or Apple music, that actually has scale and traction. And I think that’s like more of like, you know, like by design than anything else. So, to me, it’s like, they’ve never really encouraged third party developers to basically build on top of, you know, a Spotify or an Apple or an Apple music because you either get rate limited, or you’re not able to, or you’re at the mercy of them cutting you off at any single time. And I think that’s something that I think has been really, really inspirational with cool is like, people don’t need to ask for permission to start building on top of sound, or the contracts. And I think, you know, it would lead to a world where like, what if artists can have their own kind of streaming platform on their own website, what if there can be other clients that like focus specifically on a certain genre of music, or on a specific particular type of artists at an earlier stage, you might be able to build these types of, you know, applications. And then the cool part is that it’s all kind of ties together, like, you know, maybe a stream on one effect, a stream on another, like, they’re all kind of interconnected, it’s still aggregating, like streaming and streaming. 

And so that, to me, is like kind of a missed opportunity today, because you’re basically required to get all the data aggregated the eyeballs, which is super powerful, but it comes at the expense of kind of the creativity, there’s only one experience for streaming today, which is what I think, you know, I think the kind of, like web three mindset is, is like, there’s already you know, spin and future tape. And a lot of three of the predominant, you know, music streaming, you know, then like, really ask for permission, I started building on top of sound, which is really, really cool and exciting to see. And so, you just build this like ecosystem, and I think that’s the thing to take away is like, I wouldn’t say like, the web through music space is like that old, it’s pretty, pretty rare. But what encourages me is like, just seeing how many experiments are being run, is something that I think is like, pretty cool as like a music. You know, I’ve always been, like obsessed with kind of the intersection of music and technology. And for so long, you know, it hasn’t been exactly the space that you’d want to build them. And so, to see this many experiments from like, you know, things like heads or Peggi, or song camp. And, you know, obviously, like the marketplaces like sound and catalog, and Zora everything, it’s been pretty, like fascinating to see. Because it’s like, you know, there’s so much like, there’s so much just like incredible collaboration, so much, at the end of the day, so much incredible music, that it really does feel like we’re just getting started.

The Goal Behind Web3 Music

You love saying that, you love tweeting that we’re just getting started. I think where we are in, in music NFTs today is, it feels a lot like it really feels like there’s a huge energy around, of course collecting and curation. But I feel like we’re still missing the component of listenership, right? Like a lot of these platforms, whether it be sound or like other sort of like creator base collecting platforms are like glass, right? They don’t really like highlight viewer count, they highlight more of like the collecting, right, the collecting experience around it. Is that sort of like the intention and the vision we’re building towards? Is the goal behind web three music to build more of like a collector-based environment around music, or do you think it’s more so to highlight the listenership, the viewership, and all these other sorts of components that maybe web two has done really well, for example?

David Greenstein: Yeah, so I think it’s a bit, it’s a really good question. And I think it has a bit of nuance there. Which is like, the reason why, like, you know, a lot of places have left out the views is that like, artists are, like coming out of an experience with like, something like Spotify, where, like, everything is about how many plays did you get, and I think the like, part of the notion of like, you know, the web three music space was about challenging that the number of streams is correlated with like, to how, like, impactful or how much emotional value that song creates, because you have artists that, you know, don’t necessarily have the highest number of stream counts that can sell out huge tours, and you have, you know, other artists that have huge stream counts that can’t sell out, you know, a 200 cap venue. And so, it kind of puts the challenge, like, you know, and flips it a little bit on its head and saying, like, hey, like, let’s focus on like, active relationships. So, let’s focus on the people that actually care about the music and really value the artists and their craft, and really like reward and celebrate those people and kind of like distance ourselves a little bit from like, the people that are more passively consuming music, now there’s anything wrong with that, which we’ll get to in a second. But that’s kind of what’s already valued today based on like, the Spotify ecosystem.

So, I think it was more of a feature than a bug to kind of not include that information. But I don’t think play counts are a inherently, you know, bad thing in the sense that like, you know, artists obviously want to have their music heard by as many people as possible. I think it’s the more the corollary, that that’s true, which is, you know, just because it’s one doesn’t have that many streams do not mean that that song is an incredibly impactful, I think in order to like, understand this whole music NFT landscape, you kind of have to understand the history of music in the internet. And that kind of starts with Napster, which is obviously you know, my profile photo avatar on Twitter, Napster, and also my spirit animal, but also like the Napster like, you know, logo. And I’m sorry that Napster, you know, product kind of showed that, like people want to listen to music for free, like the average music listener, wants to listen to music for free. And I talked about this, you know, in the famous debate with Kobe, but, you know, the music industry was like, we’re not gonna let you monetize music for free, because that’s just not the way it’s gonna work over here. 

So, Napster ultimately got shut down as an illegal business. And then iTunes kind of pops up. And I tend to actually did, something that I find quite interesting, which is like, it has a really active relationship between like, you know, purchase certain artists, because you’re not like running around, accidentally purchasing things. And so, in that regard, like, I think it was, you know, much more stronger connection between, like you and the music. And I also think it’s very akin to like CD and evolution of like vinyl, and you know, some of the more active forms of music consumption. The problem was the average music, you know, like listener doesn’t want to spend like that much money on music per year, which was kind of proven out. And then they were also used to kind of the Napster era, where everything was free. So, iTunes ultimately starts to decrease in it’s popularity. And then Spotify comes along and Spotify you know, from my perspective is like Napster, with for 999 a month, and that has been working for like the last decade and continues to work and don’t think it’s gonna stop working for a, you know, a selection of artists. But many artists on Spotify don’t, you know, like, aren’t streaming quite well and therefore aren’t getting paid. And if your music is on a storefront, and it’s not getting paid, it basically feels like Napster. And that’s kind of created this opportunity for music NFTs. And Spotify is like really pioneered the passive music listening, even monthly listeners, the primary metric on any artist profile is a passive metric, it is literally anyone who listens to a song once a month, and I can check out an artist right now on a playlist, that does not mean that I’m a fan of them. 

And so, there’s a bit of missing active consumption today. And then music NFTs, which, you know, like everybody likes to make fun of, the concept is actually quite simple. If anyone can listen for free, but collecting and or ownership is valuable to own. And I think that concept is pretty powerful. Because if anyone can listen for free is very akin to like a Spotify or a Napster type, you know, era where you know, you can basically listen for free, but the collecting aspect is very more like iTunes, vinyl, and like CD, but has this twist of like the social status, the scarcity, and all these little, you know, web three elements, which seem kind of innocuous at the surface, but are actually quite powerful. Because of you know, the fact that like, people have been running around the internet for as long as you know, I’ve been around saying like, hey, I discovered, you know, Drake before you or I was here first. And that’s like, the primary message in any artist DMs that it’s filled with, I’ve been a fan of yours since 2014. And music, NFTs are like a very clean, simple way to basically show you’re here first supporting artists through their music, get some, you know, like social status in return and like, really, really exciting. So that’s kind of the gist of it.

Thoughts Around the Consumption Layer for Collectibles 

If you look back eight months ago, one of the biggest conversations was around the consumption layer of music NFTs. And there was a heavy environment around collecting but you couldn’t really consume the things that you collected, they sat in your Meta mask, right. And maybe some of these wallets had like media native players, but they sucked to be frank. But now we’re seeing products like future tape, who just got acquired by Zora and spin it who is rolling out and getting more and more traction, sort of like building out like the consumption layer for media, audio, video collectibles. What are your thoughts around that? Is that net positive or do you see that sort of like going down the line?

David Greenstein: Yeah, so I think the first thing is that, like, music has always been meant to be heard by as many people as possible. And so, the more you know, product services, applications that are spreading music, and finding ears, the better for obviously, like the artists, which is at the end of the day, all that matters. And so, you know, obviously what we talked about earlier, like this, isn’t that like Spotify and kind of the DSPs, kind of missed out on was having this rich ecosystem of like third party applications, that kind of build on top of kind of the content, you know, minting kind of catalog. And that to me is like something that is like really, really exciting to see. And so, I think it’s really interesting that you can have different types of listening experiences based on, like, whatever that product is trying to solve, and then obviously, you know, on sound like we’re also investing a lot into, like discovery as well, in terms of how do you find out about these, you know, songs that are getting released, as you know, there’s more and more drops, even, like, you know, having 11 drops in one day. Like, that’s, that creates a whole different set of challenges that we didn’t face. And I think that’s something that like, I think, is kind of the era that we’re about to enter, which is like this, you know, obviously, like this, you know, sound is kind of takes a little bit of a node from this, but we’re like, we’re about to enter the like, web three version of the SoundCloud era where like, you know, artists are no longer gonna stop, or, like, no longer to have to, like overthink, like this whole release, because of like, you know, is it gonna get playlisted or all these things, and artists are gonna be free to like, just release music and you’re seeing, we’re seeing like, a lot of artists make a track, minted on the spot and just send it, which I think is something that has, like, been missing from the music industry today, because there’s so much paranoia around, is it gonna go viral on Tik Tok? Is it gonna get playlisted? That I think is going to take some time to get undone. 

But that is really what made this sound so like, exciting, interesting was like, artists were just experimenting with music, putting it out, there having no idea what was gonna go viral, it was not gonna go viral. And really just like, putting out it, like incredibly exciting, you know, music. And that’s something that I think is like, what’s been most encouraging, is we’re seeing more drops and less overthinking. I think music NFTs have, like started to hopefully simplify. Like, there’s really is just, you know, the JPEG and the wav file, and so not over complicating things. And, you know, that’s kind of been the formula that’s been working. And a lot of the artists in the space that are having the most success, are the ones that are like, consistently releasing, and as there’s more music being released, there should be more kind of homes to find that music and whether that’s on sound, whether that’s on, you know, spin app or feature tape, it’s overall incredible for the for the music ecosystem, and kind of like, lifts to the, like the promises of, you know, or the web three kind of ideals of like not having it contained and kind of one primary kind of application.

Strategies Working For Artists On Sound

So that brings me to a very relevant question that got asked on Twitter, for music artists looking to release on sound, what are some potential roadmap slash strategies you’re seeing working right now? And how might those strategies evolve as the platform grows?

David Greenstein: Yeah, I literally say that there’s two ingredients for like, what works on sound. One is getting music, like if the music is not great, there’s nothing that’s gonna, you know, help you on that front. And then two is like, release consistently and consistently like, there’s not really like a strict timeline on that. Like, I think, like, if I had to get like some very large spectrum, it’s like two to eight weeks, which is a very large, you know, timeframe. And anybody really doing that right now, is having a decent amount of success on sound. Because truthfully, like just the act of minting alone, is something I also said more recently, like the act of minting alone is the what? Is the w like, it is the win, because, you know, the more artists that are tokenizing their works on chain, the more possibilities and the more places that can discover them, the more places that can integrate with kind of the catalog, that is already really, really exciting. And I think that’s probably been one of the biggest shifts is, you know, obviously, like sound kinda was like very, you know, kind of like, like caught us by surprise, but like became very associated with like, obviously selling out because so many of the like, drops in the beginning sold out and still continue to sell out. But I think that’s like not something that like where as a brand, like, you know, like, you know, like caring as much about like it’s really like I think the things that we want to like leverage our brain to champion, are really artists you know, putting out incredible music, connecting with their like, you know, listeners in cool ways and if it sells out great but I always say like you can’t rug good music like if it’s good, it will eventually you know, find it’s audience, so I think that part is, you know, something that rings true for me.

How Exclusivity is Created On Sound

Let’s put it back to the protocol for a minute because something that’s really interesting about sound, that I feel like you’ve done so well David, is create this environment of exclusivity. And with that that’s attracted a really interesting group of collectors, based off how your team curates’ artists sort of like drives hype and excitement around. Yeah, around who buys what, what gets bought and how much gets bought and whatnot. And then you come around, you introduce the protocol. And I guess I’m trying to tap into your mind for a minute, like, what’s your strategy of releasing the protocol first, before opening up the platform to more people? Like, how do you how do you see that?

David Greenstein: Yeah, I mean, we talked about this like a little bit like the protocol is like, and the underlying like, smart contract infrastructure is like the first step to like opening up sound, because everybody should have access to the same contracts that are powering sound drops today, that shouldn’t be like just a privilege for people on sound, if anybody looking to do music NFTS should have like cutting edge smart contracts, for being able to release songs with, you know, decentralized metadata that’s permanent sort of, are we even having like multiple mint options, ability to do their own golden egg if that if they want to do so different, you know, minting modules, payment modules for, you know, integrating with things like zero splits, we feel like those are tools that everyone should have. And, you know, we don’t like, you know, I think I changed my twitter thing to David shipping. At the moment, it’s ready, like we launch it, we don’t wait. And so that’s something that like, you know, we felt like, a lot of artists would, would want to have access to this. And so why would we like, hold this just to ourselves, if, like, we think it’s ready. And so once, you know, we felt comfortable, we obviously wanted to put it out in the world, so that people, you know, whether it’s like artists, or developers or companies can immediately start integrating. 

And so, the contracts that we had pretty high clarity on, like, how that would work, and what the process is, I think, in terms of why we haven’t let people like just start uploading to sound more broadly. And, you know, like, basically, like open source the upload tool, which is something that is kind of next in line, and will happen, you know, sooner than people think, is basically because like, it comes with a much more complicated set of tradeoffs. And like, you know, we’re on both the product side and the legal side, product side being like, I think it’s really important that people can find the music that they want to find out about. And you know, if there’s 5000 uploads tomorrow on sound, I can guarantee you’re not going to find out about the ones that you really care about. And so, to me, that’s something that’s like, really critical is like, it can’t, you know, I think my dream for sound is like, as content grows, you know, Adam still feels like it’s a really intimate experience, the way that it is today with like, you know, the, the artists that you obviously are familiar with on the site. And so, one is like, how do we like separate content growth, from like, you know, music discovery, which I think is really important. And then two is like, the legal concerns, like, I’ve never been on, you know, the record saying anything along the lines of like, the people who make the music shouldn’t get paid, like, you obviously want all the stakeholders in a song to get paid. 

And so, you know, the last thing I want to do is have somebody monetize music, that doesn’t actually go to the person who made that music, because that doesn’t seem like what the space is about. In fact, it was all about getting artists paid. And so, the main thing is like, it will happen, like somebody will, you know, and this is ultimately like something that we should obviously learned from like SoundCloud, because it got them into a lot of trouble, you know, back in the day, and they took them many years to, like, reform their business to like, you know, like, accommodate like that content. And so, to us, it’s like, we want to make sure, like, we have, like, all of our, you know, ducks in a row before we like, you know, jump off the cliff. And, you know, say like, let’s open it up. So, I think it’s really just around having an actual strategy and not being reckless here, because it’s much easier to like, open the floodgates and just open it and close it back. And so that’s really why it’s been taking, you know, a little bit longer, but what I always like to remind people of is like, sound is still less than a year old. And so, it just takes time to build these cool things. And I’m usually pretty good at getting and this is really credit to the team that works on sound, and I’m really lucky to work with them because they’re the best team ever. And so really, it’s like, you know, it takes us it’s gonna take a second but we’re gonna get it right.

How big is the sound team now actually?

David Greenstein: we just had 15 people on, I think, yeah, the goals, I think like you’re in our grow a little bit more but like something that we’ve been really proud of, is like keeping them team as small as possible. Because really, like you know, the more autonomy and ownership each person has and the more we can have less meetings and more and more shipping and getting features out there for artists. So, I think that’s something that we’re incredibly proud of, is keeping the team as lean as possible and building an environment where everyone has ownership over the product and can release like ideas into the world and you see something broken go fix it. And so, for a while it was like probably, we did our last episode, it was probably like, you know, five to seven or it was it was really, a long time. And we needed a little bit of help to get the these features out a little bit faster. So that’s kind of the gist of it. And one of those people is somebody who goes by the name vectorized, who kind of like author and helped work on our smart contracts. And he actually like maintains 721A, which came out of like the Cairo Labs, which is like part of the Zucchi project and 2721A is like the main like NFT repo for, you know, from a smart contract perspective. And so having him work on the, you know the sound protocol, was something that was a true privilege for us, because, you know, he’s one of the best out there. And, you know, he’s done it, he’s done it before. And that’s why, that’s part of the, I wish I could take credit. But that’s part of the reason why the contracts are so optimized.

Biggest Challenges Creating Sound.xyz

Amazing. I think one of the things that I respect about the season four release, and the season four announcement was, you introduced the protocol and then you also introduced monetization around sound, which I really thought was genuinely, really wise, because there’s value in being able to curate and being that brand, that sort of like puts artists on the maps. And there should be a take rate, a minimal take rate that comes with that. But providing all these tools in an open-source, fashion that allows anybody to build upon the sound protocol, like the way you sort of like introduced that was really smart. I’m curious, as you’re sort of like building out the sound protocol prior to launch, what were some of the biggest challenges in forming the protocol and putting it together? Like, did you have like a mood board sort of, when you were putting together the protocol, designing it and preparing it for release? Like, walk me through that entire process?

David Greenstein: Yeah, so first of all, like 5% thing, it was actually something that was like, pretty, like, you know, something that I believe from a product perspective is like, let’s get the product out there to the world, let’s make it free, let’s get you know, adoption, let’s see how people react, and then only turn on monetization, when we feel like we’re delivering enough value to the world, and people are happy, because you know, most of the time people are, if you’re delivering a service that people like, they’re more than happy to pay you for it. And the only time people get upset, is when you’re not delivering value and taking something and we never, we always wanted to under promise, over deliver. And so, for the first you know, three and a half million dollars, that sound generated for artists, we passed 100% of it, like didn’t take a single penny directly to artists, which obviously, you know, is a statement more than anything else. And then we started taking 5% of the primary. But again, that’s only on the like, sound like website at the protocol level, there’s actually a 0% fee, and we already deployed like fee less mentors, for people to basically build on top of, so if people want to build their own minting experience, the 5% fee is completely, you know, like up to them, or they can charge their own fee if they want to. But that’s only at the like, you know, like the essentially the UI level at sound. 

As far as like the mood board, we have like a couple, I would say like it’s more principles that we had, like, we wanted this to be a permissionless contract factory, we wanted to make sure it was not upgradeable. So that, you know, people, like, you know, artists had complete creative sovereignty over their own contracts, which was something that was really, really important to us. We wanted the metadata to be permanent and decentralized. That’s why we ended up choosing, we’ve wanted to have, you know, support our different like, metadata modules in terms of like, we have this thing called the golden egg, which is obviously very part of sounds brand, we actually moved the golden egg calculation fully on chain, which is like, you know, something that we invested some resources and time in. So, like, the golden egg is completely, like not tied to the sound back end in any way, shape, or form, which has been really, really exciting and kind of cool to kind of see. And then we have like different like, we want a different like auction mechanics essentially, like we have fixed option, we have range conditions, you know, maybe in the future, open additions or whatever the like, again, the used cases might be it’s the cool part is not having to think of all the possibilities today and knowing that we can build them in the future, like as they kind of come up.

So really, it was about the like composability, the like extensibility and the like modular aspect of like the sound contracts, that I think really, really got me excited. And then kind of like the secret source was really just like optimizing them to get them so cheap and like efficient, that you could actually afford to deploy a new contract for every single song, which obviously creates this, you know, massive amount of collections, because you know, they’re creating a collection for every single song, which obviously makes it a little bit harder to find these things on the you know, secondary marketplace. And, you know, we can talk about a little bit about this now, but obviously, like launching the sound market, which is going to be like the home for discovering music NFTs because right now like open sea, and all of secondary marketplaces are obviously incredible. But they aren’t, like necessarily optimized for music. And even unlike, you know, there are other tools that people have built first, deploying smart contracts. But something that at the core of sound was always like, for musicians, like nothing else. We’re not like building for other types of creators. It’s really, we’ve been laser focused on artists. And that is true, you know, in the product level, in terms of like how the pages are structured. It’s true on our profile pages. It’s true, you know, on the minting experiences but it also should be true in the secondary market. And I think, you know, artists like to be around other artists. And so, something that I think is interesting is like, I think open sea, obviously, in all the primary marketplaces have done like incredible works obviously, like getting the secondary market in the first place.

And one of the cool things about the market that we’re launching is like, a aggregates liquidity across all marketplaces. So, we’re not like, you know, it, you can list where we believe, again, same way with music, like you can list wherever you want list on open sea, list on list on, you know, looks rare, wherever you want to, wherever you want to list, but we also have like sound native listings, where you can list directly on the sound marketplace. And the cool part is that under the hood, that’s actually a, like seaport kind of marketplace, which I think is really cool, which obviously, is the protocol that open zero, rolled out. And so, if you listen to sound market, there’s 0% listening phase, or we’re saving buyers two and a half percent that open sea is taking on the open sea side, which is something that we’re really excited to kind of launch in our beta phase, where we’re having a 0%, you know, listing fee, and this was all kind of built with a new startup, that we’re friends of, you know, sound called first mate. That is kind of building, you know, marketplaces for startups. So that’s something that has been a really cool partnership as well. Obviously, they’re leveraging a lot of the new protocol stuff as well. So, it’s just been building with other builders.

So, collectors are getting their own unique marketplace for music NFTs, that sort of detachment entire experience of open sea, but they can still experience the benefits of listing right across all these marketplaces, but they can take advantage of the purchasing experience on the sound marketplace. 

David Greenstein: Yeah, the sound marketplace that kind of, to me offers like, you know, two or three main value props. One is that it is incredibly painful to go find out about music, NFTs on some of these larger marketplaces, it’s partially our fault, because we have every single song has it’s own contract. And so, it creates this like, you know, like, very large amount of like, links that you would have to keep track of and follow to like, find out about music NFTs. And so, one is just the discovery, I think is really awesome. Two, is that we have like the native listening experience, which basically comes with like a 0% listing fee. And therefore, you know, it’s obviously cheaper to list on the sound market. And then three, like this is like a home for like music NFTS and really just about, you know, having artists around other artists, which I think is also, you know, incredibly exciting. And obviously, like there’s the market is in it’s like beta phase. And, you know, we’re looking forward to adding as many music NFTs as possible. So, I think that’s something that is really, really exciting. And I’m really proud to get out this week.

What’s Missing in Web3 Music?

I think one of the coolest unlocks of the whole entire music NFT wave, is the ability to collect something, I think though over time genuinely, it’s going to become a little mundane and boring. And I’m curious from your perspective, like we’ve tapped into the first phase I feel like or maybe you could even consider it phase zero, because we’re just getting started right, of collecting something. Where do you imagine it going from here? Like, what are we missing to sort of, like, bring this entire experience together?

David Greenstein: Yeah, so I think like the collecting is kind of your entry into the music NFT world, I actually think there’s like, two kinds of main paths, were like collecting those. One is it the artists level, and like, I think the experiences that like artists can offer their collectors are just like literally the money, I wouldn’t even know if they’d gotten started. Like, obviously, we started making some really small ones, like, you could leave a comment, the golden egg, we recently launched, like exclusive listening. If you obviously like collecting artists, you know, when the next time they upload, you can start listening to the song early, which is obviously something that like, you know, like people already, like, you know, like listen to songs anyway. But I think like some of the, you know, other use cases that are really obvious, whether it’s like, you know, the wall to wall messaging hasn’t necessarily, you know, taken off yet, I think the like artists like enacting their collectors to like, help, you know, make decisions about like feature releases or future marketing strategies, I think it’s going to become a lot more of like, building that complex ecosystem and community around, it’s still incredibly painful for artists to like, engage with their collectors. 

And so, I think there’s going to be a whole set of experiences that like artists use, and I think artists have also just never had the tools to know who their like individual like believers are. And that’s something that I think is like, just seeing the artists come up with ideas to like, you know, to like, do things with people that, like, basically support their music, I think is literally just getting started. And then I think there’s a lot of stuff at the sound level that like collectors will be able to do in terms of like, hey, like, you know, maybe they’re able to influence like some of the curation on sound, maybe they’re able to, you know, like become curators themselves. So, I think there’s a lot of stuff that like we can do with collectors that I think, you know, we haven’t necessarily, like rolled out yet, which I think is something that’s really exciting. So, I think collecting is definitely like the entry point into the like music NFT world, but there will be other ways to kind of start to participate that don’t necessarily like involve collecting. So, I think that’s all for now.

What Will Take the Protocol to the Next Level?

Okay, okay, it makes sense. I want to also again, pivot, because all these sound protocol discussions are introducing sort of like side branches to talk about, but with introducing a protocol is with the hopes of sort of attracting a thriving developer community to build on top of it, right. I’m curious, like how do you? Yeah, how do you build a sustainable developer ecosystem and find one developer who want to sort of like build towards this web three, music vision? And then how do you sustain those people like, will sound have some type of like grant program? Well, I see start seeing you guys at like DEF CON, like what do you see from your perspective of sort of, like taking the protocol to the next level?

David Greenstein: Yeah, I mean, I think it’s not just the protocol. But like, we launched, we also launched, which I probably should have said, like, we launched an SDK and like, so basically, like a full set of tools to help developers engage with the, you know, the content on sound and make it as easy as possible, I think what attracts developers is obviously like making that data as accessible as possible. And then obviously, like, as easy to build on top of and then as rich like having a really like a complete set of information. And as long as that’s true, like people will start to kind of build these experiences on top of it, because there’s such a, like, kind of natural overlap between, like the developer community and kind of music, and some of the applications that people wanted to build, but it’s not necessarily have built, I think the main thing that like, you know, attracts developers is just showing that you like want them to build on top of it, and leading kind of with actions and supporting those projects. So even today, like you know, like having the three main you know, music listener, streaming players, like spin it, future tape, and blah, blah, like that’s incredible for the ecosystem, seeing bonfire recently integrate, has been really, really exciting. There’re some other ones that I can’t disclose yet that are coming out, that are big, that are starting to integrate even this like first made integration for the marketplace, there’s just been so many really cool and exciting things that it’s really just about showing concrete examples and making it less about, you know, some mythology that you can integrate the sound protocol and more about showing example apps, that people can actually like, relate to. And so I think that’s why, even when we launched the protocol, was very important to us that we had a concrete example of like what you can do, so that, you know, people can very tangibly understand and the reality they may not understand the sound protocol, or you know, all the things that kind of come with it, and in the beginning, but people can understand Reo dropping an album on his own website, it’s showing up on sound, doing a really cool bespoke experience. And that’s why we kind of paired it, I thought it was like the perfect example to kind of pair it with and Reo was the perfect partner. Because anybody who knows Reo, knows how awesome he is to kind of, you know, launch this with them.

“Web3’s Breakout Artist”

I want to also talk to, before your wrap up about like, macro current events that sort of took place. So, Warner and open sea sort of did a partnership to bring more of their artists into the space, we saw a couple of major record labels introduced their own like, I guess one sort of actually comes to mind, I forgot who but you might know off the top of your head, but they introduced like a music NFT fund of some sort, right? All these sorts of like more big picture initiatives. So, us Dejan sort of like made enough noise. You know, even though I feel like I played a very small part with collecting platforms like yours brought a lot of the scene to life, right. And all the other collectors that sort of like came through that billboards article of saying, like Daniel Allen is on the verge of becoming like web threes breakout artists, like all these headlines, all these interesting initiatives and activities sort of spurred external movement and behavior. How do you feel about that? Are we for that? Are we against that? What do you think? 

David Greenstein: I mean, it’s on the one hand, I’m like, no more music NFT activity, the better for a kind of pioneering this is like an emerging technology within the music space. On the other hand, like, it’s like, just a completely different field to kind of where we’re at. Like, I think sound you know, a lot of the native web three ecosystem is really focused on championing the independent up and coming artists, the artists that like have been overlooked by things like Spotify. And I think in general, like, it’s really hard to, like, build that community around something like a major corporation, or major label to kind of win over like, it’s just not like, you know, a lot of the principles are like fast transparency and accuracy. And I think it’s like really cool, and I think should be encouraged and actually give them a lot of credit for like, even wanting to experiment in the first place because they don’t have to, they make a lot of money as it is. But I think in terms of like, becoming the de facto solution for where, you know, music is going to be discovered. It’s just completely like you know, I wouldn’t say like it’s occupying too much mindshare, for me right now. So, I think really, it’s about supporting the current ecosystem, and you know, building like the true music NFT community, which I think is like, really started to take shape in terms of something that is another signal. To me, it’s just seeing all the artists collaborate with each other, making music, putting it out together, across, you know, not just sounds, but other platforms, it’s been really, really cool to see, I think companies are collaborating with each other, I think artists are clapping, or collaborating with each other. And every week, it feels like, you know, the movement is growing a little bit more, and you’re seeing an artist’s friend, come check out, you know, the web three space, and word kind of spreads. 

And so, I think that’s one thing that has remained true, since our last episode is like sound has still never spent a penny on marketing. It’s fully organic. You know, we still really don’t have a way to sign up for like emails or anything on sound, which is a terrible idea that we should probably figure out, but it’s been fully organic. And it’s really like the artists who deserve all the credit for it. Because it’s really artists championing kind of what’s been going on, telling their friends and their peers and, you know, making music with each other. And I think collaboration is actually one of the ways that you solve education, and you solve onboarding, because artists, you know, start, like, you know, like, they might throw their collaborator on a split, who doesn’t even know about music NFTs. But now they have to come claim the Eth that gets generated from the sale. Now all of a sudden, they have like a wallet, and they’re curious, and then they want to put out their own song and, you know, creates that kind of flywheel effect. So, I think, you know, we’re just getting started.

Thoughts For Web2 Artists Experimenting in Web3

Yeah, Black Dave said this best when we record an episode, he’s like, I think when you look at more mainstream artists trying to make their way into web three, a lot of them fail, because they don’t embrace the element of collaboration. They sort of come in with their status of being up here and us, web three through people were maybe like down here, but soon to be up here. But then he referenced Snoop Dogg as an example of like his entrance into web three, he did have a lot of experimentation. But one thing that he did really right, was sort of like call out a lot of like the up-and-coming web three artists, do a song with them, right, and then eventually release that on sound. And he got a lot of like the web three music cloud, despite how much of an icon he has already to begin with, right? But sort of like his entire entrance into web three was very felt organic, felt aligned with the community, which I really respect. And I’m curious from your perspective, like if you were to say anything to these web two artists coming into web three, right, that have done really well for themselves, have built listenership, they want to experiment what the web three route, what is that entrance? Like what does that look like? So, we talked about collaboration, looking at one of them. Do you have like a playbook or roadmap that you could maybe share? What are your thoughts?

David Greenstein: So, it’s still the same advice that I give, like even artists in the space, that are that are more native, it’s put out good music and release consistently. And like, I think like just the act of tokenizing, your music is already the sign that like, hey, you’re taking this space seriously. And the reason why I say released consistently is, you know, if you put out music, or you minted music NFT one time, and then you disappear for six months, it’s pretty hard to convince people that you’re like, genuinely serious about the space and come across, like, hey, like, maybe you’re just in this for the money. But when you release consistently, it kind of shows that you’re like, somewhat committed to like tokenizing your music. And then I think like a third, I wouldn’t say like mandatory, but I think a really cool gesture, is people who like set aside a certain percentage of their earnings to like, start collecting other artists in the space. Because I think, you know, if you show up for others, they’ll show up for you. And I think it’s kind of like, you know, kind of, you know, it’s less of like a take mentality and more of like a, you know, give mentality. And so, the more you give, the more you get in return. And I think some of the really exciting artists that have come into the space and done really well. They’re not just like releasing consistently or putting out incredible music, they’re also supporting a lot of the artists that were like, there before them, that they also genuinely appreciate. I think the one thing is like, I don’t think should be collecting for the sake of collecting, I think should be collecting people that genuinely inspire you. And that’s something that I think has been really, really cool. And that’s how like, friendships start to form and collaboration starts to form. And they might go from collecting somebody’s work, to doing a Twitter space with them, to them putting out a song with them. And that’s something that I think is a pretty repeatable blueprint and strategy. 

What are some things that you’ve collected recently, that you’ve sort of, like really fallen in love with?

David Greenstein: I’m saying neutral on this one, because I think I don’t play favorites. Any artists on sound are like, putting out incredible, incredible music. So, I let you guys on the collecting side, do that for me.

So, does that mean giving a nod wallet that just like collects very discreetly?

David Greenstein: if you can find it, go ahead, but I’m pretty like, you know, I stay kind of neutral on this one. Mainly because I think the main thing is like, just putting out the music alone and minting it is, as I said, the win. And I think it’s really, like there’s so much good music. It’s overwhelming. Like, I mean, looking at one of the days, I would like I would have said like that could be our whole months’ worth of music, you know, like a couple months ago. And so just seeing how much incredible music is being released and even like the artists themselves are like, getting bigger and bigger and bigger, and just building community around their music and it’s been just insane to see the growth that people have taken, over the last couple of months like months and that we’re talking months, so like, give people a year or two yours and like, let’s see what happens. And I really do feel like we’re on the precipice of like, something very major happening in the next three to six months. And I think we will get all those things that people have been clamoring for like the first breakout song, the first breakout artists, and there’s so many talented artists in the space. It’s just a natural reaction of what happens when you like, put talented artists together.

Thoughts Around Secondary Sales of Music NFTs

Two questions left for you. Okay. The first one is, how do you feel about secondaries for music NFTs? Are you a fan of collectors selling and reselling the things that they mint? We’ll start there, and then I’ll ask the next one.

David Greenstein: Yeah, I mean, so this isn’t not necessarily tied to music NFTs, is more broadly, I think the one thing about secondary sales, like you are kind of like rewarding people for exiting the community. And like, you know, like, if you have a lot of secondary volume, that means people are trading these things back and forth with versus in theory, you kind of want to reward people who like hold forever. So, I think as long as the value that’s being created, is generating back to the artist, and there’s obviously been a lot of famous royalty debates. More recently, I think, like, I’m okay, with, like secondary volume, it’s an additional source of revenue for artists. I don’t think it’s like, yeah, I think it’s like important to that, like, you know, like, these music NFTs are viewed as valuable and obviously go up in value over time, which I think has been the case for the majority of the NFTs on sound. But I don’t think it’s like, I have kind of like a, you know, I think the secondary marketplace is like, barely even gotten started. And like, it’s sounds so much across like 5 million in secondary volume, which is not trivial. And that’s obviously like an extra, you know, 500k that’s been paid out to artists. So, I think that extended, it’s pretty powerful. And I think, you know, once you build the tools for more discovery, you build things like sound market. Yeah, like the secondary market is going to be as kind of powerful as the primary one?

So quick tangent, wouldn’t you say there’s other ways to sort of like solidify one’s participation in an artist? So, does them selling the NFT sort of indicate their loss of love for that artist? Or is it maybe them just tapping into the economics of the beauty of having like an open mark and everything being tokenized and being able to sort of like profiteer, if there is room for that?

David Greenstein: Yeah, I don’t think like artists would even care if like their fans is very sold, if it’s like them, obviously, like having some type of economic empowerment, like if you can come in and support an artist to their music, and then you know, that support ends up being more something. There’s nothing wrong with obviously, like, you know taking, especially like, because a lot of people who made money on sound, have like taken it and just reinvested it into collecting more artists. So, I think it’s like I think, you know, in general, I like believe artists should be able to put out whatever music they want, I think collectors be able to sell and buy whatever they want. I don’t believe that there should be like constructs or rules around like, what’s acceptable behavior, I think we should adhere to like the web three ideals, and like free market economics, and just see where things go. But I think for people who like really have an emotional connection with that song, they’re going to continue to hold the music NFT. And, you know, I think that’s all that matters.

What’s Next for Sound.xyz?

And my last question for you, because we’re just getting started, what’s next for sound? What can we expect? So last one that we did was in April, or May, it’s been about like, six, seven months, I guess, since we did this interview, we’re obviously going to do another one. And in a few months to do another recap, what can we expect in the next few months? We talked a little bit about the marketplace, the protocol introduction, but yeah, from your perspective.

David Greenstein: All my bullets like, well, you know, we did the protocol, when we launched our new song page, we obviously have this like market coming out, which is like a bit of a surprise. I think the next step, I’m gonna stay pretty quiet on the product level, because there’s some cool things coming. But what I will say is that the goal is obviously to like get sound open in the next couple of months. And my hope is, by the next time we record, the part three is that we’re talking about obviously, like the you know, sound like the final piece, the final half is like the UI is fully open, that people can take advantage or upload tools open source. So, people can kind of, you know mint music NFTs and have access to these contracts, you know, at the UI level, and host their own drop parties, in their own listening experiences and own golden eggs and all this other fun stuff. So, I think that’s really when the fun the chaos begins. And I think that’s an I’m really, like, I think it’s gonna be the next chapter of music NFT is, on the artist side, you’re going to have artists, you know, like kind of releasing as they make songs and, you know, kind of bring back that sound clutter. And then on the collector side, it’s actually going to become a game of who’s the first to discover new music. I think today, the ecosystem is so small, that if you really want to, like you can essentially collect every single, you know, artists on sound and, you know, I think a few people have gotten really close to doing so. But I think the game gets a little bit more interesting when like, there’s so much music being released, you actually have to like, you know, use your taste or your judgment to actually choose which ones you want to collect. And it actually makes like you supporting an artist, actually even more valuable because now all of a sudden like your taste is like a curator or a tastemaker actually like means something today, I think it’s hard for me to get behind if you collect every single artist that means like, essentially your, you know, like the best curator, right? But I do think that if you know, there’s thousand artists on sound, and you collect the 10 that have done the best, that does technically start to mean like, hey, like, you might know, like, you might be able to predict the next one. And I think that’s really where this game is headed. A lot of fun stuff and, you know, I’m sure I’m sure it’ll still be in the thick of it. So, I look forward to that in part three.

Outro

Amazing, David, thank you so much. Before I let you go, where can we find you? Where can we find sound? Show it away for those who don’t know.

David Greenstein: Well, first, we’ll start with sound, sound is on Twitter, at sound XYZ underscore, on Instagram, it’s just sound XYZ. My personal is D Greenstein one. You can find me with the Napster logo on Twitter. And yeah, that’s pretty much it. If I’m not there I’m probably listening to mint.

Amazing, like to hear, woof. Like, I’m gonna copy that one. I love it. David, thank you so much, till next time.

David Greenstein: No, thank you for having me as always, Adam.

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BlockchainBrett highlights his new article “the crypto creator economy”, why he believes content NFTs are the next wave, and understanding the value of collecting content.
Podcast Transcript

Content NFTs.

BlockchainBrett highlights his new article “The Crypto Creator Economy”, why he believes content NFTs are the next wave, and understanding the value of collecting content.