DAOs are ready to play a pivotal role in artist-music fan relations
The relationship between artist and fan is constantly evolving and what it will look like in the years to come will be nothing like its past. As music and Web3 intersect, questions are explored. For example, what motivates music fans from a human perspective? With the majority of people accessing music through streaming platforms, do most artists even own the relationship with their fans? What are the first principles of musical fandom and what does it look like in the Metaverse?
Most of us have heard of the potential of Web3, but even beyond NFTs and the Metaverse, there is a new ability to organize communities around a common goal. Just as Web3 is rooted in a decentralized online experience, a Decentralized Autonomous Organization (DAO – pronounced as “dow”) applies similar principles to support this new method of establishing and incentivizing communities.
Think of DAOs as artist fan clubs with an omnidirectional capability, meaning the interaction isn’t just an artist-to-fan spread. It is a deeper experience with all members contributing value and participating in the results. Imagine one fan being a marketer, another a graphic designer, and a third a lawyer all participating in a DAO created by their favorite artist. Through a thoughtful and fair governance system, these contributors could be rewarded for applying their skills to the DAO, while helping their favorite artist.
Which raises a key misconception about DAOs: that they are fully automated or algorithm-driven entities that require little human interaction. While smart contracts are usually embedded to automate decision-making and operations, success still depends on people. Initially, the founders of a DAO are deeply involved in building the philosophies that will eventually drive automation. For example, every DAO needs a framework that gives the community its rules of conduct, helping to determine how new members can join, how they decide what to work on, and how to reward contributions.
According to Seed Club co-creator Jess Sloss, DAOs are meaning-making organisms triggered by a call to adventure. Seed Club helps innovators build their own DAO. Twenty-five percent of Seed Club projects are music-related, including Songcamp, which brings together producers, writers and musicians to incubate new creative methods. With an increase in the desire for meaningful work, these communities provide a way to quickly connect with like-minded people, share experiences, and collaborate on projects.
A hard fact to grasp about DAOs is that they are emergent rather than directed, but some of the most powerful systems on our planet are non-hierarchical. For example, forest ecosystem activities thrive without board meetings and without micromanagement. Communities, even musical audiences, are made up of individuals with unique experiences and special skills. What if the superpowers of each member of the community could be harnessed with a fair exchange of value between the community and that individual? Imagine music fans applying their skills to help an artist grow and share the profits.
One trend to watch is the development of tools that reduce the technical complexities that can exist when creating a DAO. Syndicate is a decentralized investment protocol and social network that provides tools for starting and managing DAOs. Today they announced their Web3 Investment Clubs, which are based on the concept of traditional investment clubs that first gained popularity in the late 1800s. According to Syndicate, since investment clubs are run by their members, virtually any community can create one – and they are generally not regulated by the SEC as long as they follow certain guidelines.
These guidelines include a limited number of members and ensure that all members have a say in investment decisions. Regulatory and legal aspects are a priority for early adopters of DAO, and Syndicate believes they have carefully managed these concerns, leaving their users with clear peace of mind. According to Syndicate co-founder Ian Lee, “DAOs enable human and financial capital to organize and coordinate in entirely new ways natively on the internet. They give communities the tools to invest their time, talents and money in the people, projects and missions that matter to them, no matter how big that mission is. This will allow for more creativity, as projects that may not have previously been funded will now receive the support they deserve to enter the world.
Even those with a rich history in the music industry develop DAO-based projects. Anthony Marshall, founder of Lyricist Lounge, is set to announce a project in the DAO space. Some say DAOs offer an opportunity to reinvent old systems. Marshall says, “DAOs are a new model that feels better. People have invested in hip-hop culture with great returns, but the lion’s share of those returns hasn’t gone to the creators. It’s not about remaking the old industry. This is a whole new thing. We don’t absorb music like we used to. At the time, the music itself had a different level of value. Now, artists and creators deserve the most from ownership, funding and access. Artists are way beyond their music. DAOs will allow artists to finally actualize who they want to be.
If ConstitutionDAO could raise $47 million and galvanize a community of thousands in seven days to try to buy a copy of the US Constitution, there must be ways to apply similar concepts to music. Web3 is clearly at the nascent stage of its development. We are witnessing captivating experiences, and while they may not be the ultimate solution, they will certainly inspire us and fuel our collective understanding. The intersection of music and Web3 will be a playground of projects resulting in deeper and more meaningful connections between artist and fan.
Jeremy Gilbertson is a metaverse methodologist and head of music at Infiniteworld.