SoundCloud had Billie Eilish, Kygo and Lil Yachty. TikTok had Lil Nas X and Olivia Rodrigo. Every era of music is defined by a new platform and a string of breakout artists that used it as a launchpad. Web3 hasn’t had that moment yet, but one platform is working on it: Sound.xyz, known simply as “Sound” in the community.
Over the last year, Sound has become the most popular underground place to drop a music NFT, open to only a select group of artists — and it achieved that feat without any marketing dollars spent. Snoop Dogg, Vic Mensa and Bobby Shmurda have all released limited edition collections on the platform, which has made a total of $3.4 million for artists since January. Even in the crypto bear market, where other music NFT platforms have been slowing down, Sound continues to host 5-10 drops per week, with most selling out.
Around the Web3 community, artists and collectors have likened Sound’s growth to the early days of SoundCloud, and there’s a buzz of energy around its potential to launch a new generation of artists. Co-founder David Greenstein, a former Atlantic Records A&R, isn’t shy about those ambitions. “We want to be the hottest place in the world to discover new music,” he tells Billboard in his first mainstream press interview.
“The idea of music NFTs is not tied to emerging artists,” Greenstein explains. “I just think they’re the ones that are most hungry to try something new because the status quo isn’t necessarily working for them today.” Inevitably, he says, there will be a breakout moment that could trigger the next wave of mainstream stars.
Already, the platform is becoming a hotspot for independent talent on the verge of breaking out. It played a major role in the early career of producer Daniel Allan — who many consider the first big potential Web3 success — hosting four of his early collections, all of which are now priced at at least $600 on secondary markets. It also launched the first NFT drop for Grammy-nominated singer-songwriter Alexander 23, whose track “IDK You Yet” had recently exploded to 350 million streams, and hosted two drops for electronic dance producer San Holo, who edged his way onto the Billboard charts with his last album.
While the platform has received some criticism from the Web3 music community for its gated application process (it’s not very Web3 to have gatekeepers), that’s now changing. And by doing so, Sound is positioning itself as the go-to hub for every artist in Web3. After 10 months as a curated platform where the team cherry-picked the artists, a new initiative called the Sound Protocol will allow any artist to drop an NFT, using their own decentralized smart contracts and metadata.
“To open up the opportunity to anyone that wants to release music NFTs and to do it on infrastructure from a trusted music NFT brand, is a really powerful thing,” says Brett Shear, founder of Kygo’s Palm Tree Crypto fund, a Sound investor and collector of more than 250 music NFTs.
The Sound Protocol isn’t just a new feature, it could be the foundation of an entire Web3 music ecosystem. It’s an open playground where anyone can build or launch music NFT projects. Developers in the space are already building apps and websites on top of it. The first priority, expected in the coming months, will be simple templates for artists to upload tracks, host NFT drops and integrate them onto the Sound.xyz website. In the future, developers will be able to build anything from music charts to aggregators to streaming services. Meanwhile, the Sound website will continue to host curated drops, maintaining its place as a tastemaker.
So far, music NFTs have been fragmented across dozens of different platforms like Sound, Royal, Catalog, Zora and even blockchains beyond the popular Ethereum, like Flow and Tezos. The Sound Protocol could consolidate the market and, if it catches on, dominate the whole space — because it’s the first time musicians will have a protocol tailored specifically to their needs. “Where do you want to mint a music NFT, if you could?” asks Shear. “You want to do it on the place that focuses on music NFTs, right?”
The protocol also unlocks more flexibility for musicians. For example, artists can use the Sound Protocol to host drops on their own website and Sound simultaneously, meaning they can create their own NFT web stores, just like any other merchandise or song stream.
Reo Cragun is the first artist to take advantage of the new protocol, launching his Frameworks EP drop on his own website Wednesday (Sept. 28). Cragun — one of the first 10 artists to release on Sound and a vocalist on Flume’s Grammy-nominated mixtape, Hello I Am Flume — worked closely with the team to ensure it made sense for artists. “David [Greenstein] told me about the initial concept of Sound Protocol and we went back and forth on how it could be implemented to empower all artists,” he says. Hosting a drop on his own site is a game-changer, he notes, because he can create a more personal experience for his fans while still tapping into the network effect of Sound’s audience: “These tools have given me a new way to express myself as an artist.”
In a hyper-competitive — and currently shrinking — market, where formerly prominent Web3 music platforms like MintSongs have shut down, Sound has maintained its dominance through a simple formula. Artists drop a limited run of NFTs — usually between 25 to 100 editions. There are no special features, no claims to streaming royalties, no VIP access. It’s just a song and the artwork. A far cry from the speculative mania of Bored Apes, it’s more like collecting art and supporting individual musicians for the long-term, according to those active in the space.
“You buy it because you love the artist,” explains Shear. He compares it to the early NFT art movement, which set the stage for the mainstream adoption of NFTs in 2021. “I haven’t felt this excited since early crypto art. It’s my biggest focus.”
Greenstein believes the platform resonates with artists and music fans because it brings back a more active relationship with music. “We are living through the most passive era of music consumption,” he says, thanks to the explosion of Spotify playlists and TikTok. This isn’t necessarily a bad thing, he clarifies. In fact, it’s been incredibly powerful at surfacing the best songs, but there is a downside. “This is the first time ever where you can have a hit song and nobody knows who you are.”
Greenstein’s dream now is to catapult a wave of artists to stardom. “Can you break artists, not songs?” Greenstein emphasizes. “That’s the holy grail.” For musicians, this ethos is compelling. “Sound has always put artists first,” confirms Cragun, who is also a collector himself, with 30 Sound NFTs on his “shelf,” as the platform calls it. Like early SoundCloud, it’s a place where musicians support each other.
Monetization is also a big draw. Each NFT on Sound is priced somewhere between 0.02 ETH (about $26) to 0.1 ETH ($132). While not prohibitively expensive, it’s still a higher price tag than music fans are accustomed to paying. “It’s an experiment in finding the true value of music,” says Greenstein. “Isn’t it strange that every consumer should value music the exact same way?” He points out that iTunes set a flat price at 99 cents per song while Spotify chose $9.99 a month for almost every song in existence. “That’s the thing that’s being challenged here.”
Of course, there’s a cloud hanging over all of this innovation: The crypto bear market. Since the highs of late 2021, the price of Ethereum — the main cryptocurrency used for NFTs — dropped by as much as 80%. NFT volume is the lowest in 12 months.
Sound isn’t immune from the slowdown, and it has adapted by lowering the primary price of its NFTs from 0.1 ETH to 0.05 ETH or even 0.02 ETH in some cases. Drops now also have a slower cadence rather than instant sellouts every day.
Still, most drops do still mint out over a 24-hour launch period, while secondary sales have remained steady or even climbed higher for many artists. Shear says that music collectors, much like artwork collectors, are less fazed by the bear market conditions. “Everyone that’s buying now is a very long-term believer,” he says. “People have adapted to the current market conditions a bit but it’s still growing. Artists continue to sell for more or higher volume.”
Bear market or not, Greenstein is convinced that Sound’s focus on emerging artists and opening up the protocol will pay off in the long run. “We’re looking for the next Drake,” he says, adding confidently that Sound will break the first big Web3 artist. “A thousand percent. Sooner than you think.”
