A Fundamental Analysis
We are back today with a new FA piece about another innovative Web3/DeFi project that we are very excited to be supporting: MODA DAO.
MODA DAO is “redefining the future of Web3 music ownership, publishing, and licensing via NFT standards, decentralized governance, and automated finance.” They call this Music3 (and so are we).
In this article, we will break down the project for you, including what problems it is solving, what value it is creating in the music industry, who is behind it, and what the future of Music3 looks like.
A Brief Intro to MODA DAO
MODA DAO aims to exist as a not-for-profit organization, with the goal of removing the middlemen in the music industry and creating shared value between creators and their fans/supporters to accelerate the growth of Web3 music, or Music3.
By using NFTs to exchange entertainment, contractual, and financial value, MODA DAO will have a tokenized value structure shared between everyone involved. This model exposes token holders to the MODA DAO ecosystem at three different levels.
MODA/MODE has lots of fashion/musical connotations. It could stand for Monetization of Decentralized Audio, or Management of Distributed Audio, but it also just sounds cool. DAO, a common term in the crypto space, stands for Decentralized Autonomous Organization.
The Three-Layered MODA Value Model
Layer 1: The first layer of the MODA DAO ecosystem is the MODA network layer. In this layer, the MODA publishing platform earns revenue from any song it administers and splits revenue three ways between artists, the reward pool, and token buy-backs.
Layer 2: The second layer of the MODA value model ecosystem is the artist layer. In this middle layer, MODA members can back certain artists to signal their support and help increase their exposure, reputation, and ranking. In turn, artists may choose to reward supporters with artist tokens, NFTs, or MODA rewards.
Layer 3: The third layer of the MODA DAO ecosystem is the song layer. In this layer, MODA members back new songs before they are released to increase their visibility, in turn sharing in their rewards. The rewards for backing songs can come in the form of NFTs, micro-licensing rights, and/or trade fees as new Music Genesis NFTs get purchased from the marketplace.
Why We Like It
So, why do we at Defiants like and support MODA DAO’s tokenized Music3 value model? For starters, we love the revenue sharing model between artists and MODA members. Instead of traditional music industry figures deciding what is “hot”, and largely driving which artists/songs create value in the industry (largely value for them), content revenue is user generated and shared equally within the MODA DAO ecosystem.
With MODA, artists are completely free to reward fans and backers as they see fit using NFTs, MODA rewards, and artist tokens. Thus, MODA members are actively rewarded for supporting artists and songs, gaining value from their Music3 involvement — unlike traditional streaming services which only extract value from them (via subscription fees, data, etc.).
This tokenized value model has the potential to create a fully sustainable Music3 ecosystem, or a Web3 Sustainability Loop, which uses music as an equal source of value for everyone involved in the system.
Shifting the Music Industry Paradigm
MODA DAO was founded because of a belief that the legacy music industry is flawed at its core. Here’s the problem: industry middlemen largely control the pathways that get music from an artist in the recording studio to the ears of listeners. This creates bottlenecks and allows a few key figures and companies to unfairly influence who gets listened to (and paid). Beyond that, even for successful artists playing the industry’s game, it can take years to receive the revenue they are owed from royalties.
As if exploitative legacy music industry practices weren’t broken enough, streaming platforms also implement shady practices to avoid paying out royalties to artists. For example, they will try to direct you to listen to content that they own the rights to, thus directing you away from listening to content from artists they would have to pay royalties to.
https://cdn.embedly.com/widgets/media.html?src=https%3A%2F%2Fwww.youtube.com%2Fembed%2FJ4d_t1lEp1Y%3Ffeature%3Doembed&display_name=YouTube&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DJ4d_t1lEp1Y&image=https%3A%2F%2Fi.ytimg.com%2Fvi%2FJ4d_t1lEp1Y%2Fhqdefault.jpg&key=a19fcc184b9711e1b4764040d3dc5c07&type=text%2Fhtml&schema=youtubeRecent interview with MODA DAO and Emanate Co-Founder Sean Gardner
Enter MODA DAO. The MODA DAO ecosystem cuts out these middlemen and helps eliminate the shady business practices of the legacy music industry to create equally-shared value for artists, listeners, and the ecosystem as a whole.
Creators and MODA DAO members all have the opportunity to influence what music gets listened to and gain value from it by holding and staking $MODA tokens. And, the more interaction there is between creators and members, the more value is generated in the ecosystem as a whole.
We think MODA DAO has tremendous potential for long-term growth and is in an excellent position to bridge the gap between the legacy music industry and Web3. They certainly have an excellent vision of how to encourage the adoption of Music3 and solve some of the entrenched problems of exploitation that plague the current music industry.
A Look at MODA DAO’s Team and Partners
Of course, any project we offer our community support to has to have a stellar team behind it, and MODA DAO is no exception. The project’s founding members include influential artists and figures from the electronic music scene, including Richie Hawtin, Joel Zimmerman (Deadmau5), and Dean Wilson (Deadmau5’s manager), to name a few.
The founding team also includes people like Daouda Leonard, Founder and CEO at music fin-tech company CreateSafe, Sean Gardner, Co-Founder of music monetization platform Emanate, Rachel Kelly, Vice President of Australia Operations at Utopia Music, and Jaddan Comerford, Founder, Director, and CEO at UNIFIED Music Group.
MODA DAO’s launch partners include record labels, blockchain accelerators, venture capitalists, creative studios, and music agencies, among others. The combined catalogs of music managed by some of these partners account for more than 10 billion streams per month on traditional music streaming platforms.
MODA DAO has the full support of these music industry veterans and experienced technology professionals who “are ready to use their influence, businesses and catalogues [to] actively drive innovation and adoption of Web3 technology for musicians, music fans and industry participants who wish to see a better future for music via Web3 technologies.”
With MODA’s best-in-class team, there is no project better suited to start writing the future of Music3 by changing the way artists interact with their fans and supporters and control the rights to their music. We agree that by eliminating traditional music industry gatekeepers and creating a more direct relationship between music creators and listeners, the value of music can be rediscovered through digital collectability.
Rumours and Opportunities
NFTs are hot in the music industry right now and MODA DAO isn’t the only exciting project in the scene making headlines lately. PIXELYNX, Deadmau5 and Richie Hawtin’s gaming venture to build a music metaverse, recently announced that it closed a $4.5 million seed investment round led by Animoca Brands, a Hong-Kong based game software and venture capital company that is helping drive digital property rights via NFTs and gaming.
The goal of the PIXELYNX gaming platform is to create a digital music metaverse that allows music creators to launch their own interactive environments and monetize them through NFTs, playable experiences, and virtual performances. Development of the platform is being led by top-tier game developers, including Activision, EA Sports, Epic Games, Ubisoft, and Microsoft. PIXELYNX is set to launch in 2022.
No official connection between MODA DAO and PIXELYNX has been announced yet, but considering Deadmau5 and Richie Hawtin are involved in both projects we think there could be a potential opportunity here for MODA DAO to scale into the music metaverse.
Start Atlas, another big player in the music metaverse scene, is rumoured to be bringing music NFTs into their metaverse by embedding the ability to host live music or stream NFTs straight out of the MODA DAO platform. There has been no official confirmation of this from either Star Atlas or MODA DAO yet, but it’s another sign pointing to the possible incorporation of MODA DAO’s Music3 platform into the larger metaverse as the project develops.
What’s in Store for the Future?
At the end of November 2021 MODA DAO launched its $MODA tokens across the entire EVM-compatible ecosystem in a private sale event. The launch culminated in a Token Generation Event via TokenSoft.
With the token launch completed, MODA DAO is primed and ready for a strong start to 2022. They recently announced the launch of the world’s first NFT Music Aggregator, which will allow users to stream NFT audio files from all supported NFT platforms and chains to create a simplified and unified NFT listening experience. The aggregator notably won’t require ownership transfers across multiple platforms in order to listen.
This first-of-its-kind NFT Music Aggregator will also allow musicians and creatives to upload their music to the InterPlanetary File System (IPFS) and allow direct streaming to other users, aligning with MODA DAO’s goal of removing music industry middlemen and putting power back in the hands of the artists. Allowing users access to the MODA DAO toolset regardless of what their blockchain preference is will surely accelerate adoption of the project’s Music3 platform, which will help the project end the year in a strong market position with a pre-established foundation of users.
Additionally, MODA DAO has plans to release music NFT DropCases to their community members later this year. These DropCases signal the holders’ support for Audio NFT drops, allowing artists to target them for help promoting future releases. Creators will be able to target users and share their Audio NFT drops based on users’ genre preferences and their Audio NFT collection prowess. As users build their collections, they may have opportunities to unlock exclusive music releases and promotions in exchange for their NFT-backed support.
We love this shift from treating music as a resource to be exploited, to treating it as something more akin to an art collectible that can provide equal value to both creators and listeners via NFT standards.
Other Upcoming Milestones
A pilot group of artists managed by MODA DAO’s partners is expected to release songs later in the year via the project’s Music3 infrastructure. This pilot program will demonstrate the viability of releasing music through non-traditional avenues and prove how artists, listeners, and the ecosystem as a whole can equally share in the value generated within a Music3 system.
MODA DAO also plans to give out more than $1 million in creative and technical grants over the next two years to individuals and teams who submit proposals to the DAO. These grants will help compliment the project’s proprietary research and innovation lab by funding complementary initiatives, thus driving MODA DAO’s growth and influence in the Music3 space.
All of this will help cement MODA DAO’s position as leaders for the transition from Web2 to Web3-based music (Music3).
2022 and Beyond
While we touched on some of the near term accomplishments, MODA DAO also has a stellar long term roadmap:
- Completion of private sale
- Token Generation Event
- Launch pad, fair auction or IDO
- Staking and rewards dashboard
- Voting portal
- Publishing company launch
- Innovation lab launch
- Music provenance program
- Music NFT standards board
- Metaverse music licensing standards program
- Web3 ISCC standard creation and launch
- Metadata and music classification standardization program
- Cross-chain music metadata program
- Legacy industry bridge
2023 and beyond:
- Catalogue acquisitions
- Dedicated Music3 storage and data network
- Fractional ownership legal framework
We are pleased to see such a clear and aggressive approach to the Music3 initiative, and strong plans for 2022.
The MODA DAO team has exactly the type of vision and innovation that we like to see in this space. They identified a major problem in the music industry and are developing a tangible solution via a decentralized technology framework and community.
On the heels of their recent token launch, and with some exciting new milestones coming up, we are confident that MODA DAO will succeed in their goals to modernize the music industry. Beyond that, they have the potential to drastically change the way we think about and interact with music — to create a shared, non-exploitative value model for an age-old art form begging to be brought into the digital age.
We hope this article has helped you understand why MODA DAO is one of the most exciting Web3 projects to launch in 2021. Certainly keep your eyes on them over the next few years.