FoFoFadi Crew of FoFoFadi Records, Zhu of M.O.A.G., and Joe Kay of Soulection
Implementing SingularDTV’s Artist Consortium Model
A new economic model to finance artist creation with fair compensation has been created thanks to the team at SingularDTV. This tokenomic model, known as the Artist Consortium model (AC model), allows for a collective group of artists to be funded by their fans through the sale of the group’s token. Independent music labels would benefit from adopting this model in order to finance their artists’ content creation through an economically sustainable model and reward their fans for their support since day 1.
A label’s token is a digital currency (like Bitcoin and Ethereum, unique to the label) and incentivizes early adopters to grow its value. The money generated from the label’s token sale finances artists within the label to create digital content only accessible through the label’s digital channel. Fans can only access the artist’s created digital content with the label’s token.
Artists, therefore, are financed by their fans to create content and receive their fair share of royalties when fans access their content. Artists are also given the label’s token in order to be incentivized to continue generating content for the label’s channel, thus growing the value of the label’s channel. Fans gain future value from being early contributors. The price of the label’s token will appreciate in value according to the quality of content generated by the artists and the demand that fans create to access the content.
The AC model isn’t meant to make the artists millionaires. Instead, it creates a sustainable model where artists are funded and compensated fairly for doing what they love. The model empowers fans with the ability to fund the artists they enjoy, and thus rewards early adopters and true believers of the label. Therefore, independent music labels who are in need of funding in order to grow their vision must adopt the AC model to create an economically sustainable business.
This article will cover:
- (1) How independent record labels can launch their own token
- (2) How the label’s token creates a sustainable funding ecosystem for their artists
- (3) How fans will be able to spend the label’s token
- (4) Examples of existing independent music labels that can adopt the AC token model TODAY!
INDIE Token Launch Breakdown
As taken from SingularDTV’s Tokenomics 101
For the purpose of this walkthrough, we will be using a theoretical independent music label called The Label with its native token called INDIE.
STEP 1: Generate INDIE Tokens
A total of 20,000,000 INDIE tokens are created through Tokit’s multi-smart contract application.
STEP 2: Designate Tokens Purpose
10,000,000 INDIE are designated as Project Creation tokens and 10,000,000 INDIE are designated as Economic Sustainability tokens.
STEP 3: Create Year 1 Fund
The 10,000,000 INDIE allocated towards Project Creation will be used for multiple token launches on Tokit.io, with the Year 1 Fund being most crucial towards INDIE’s success.
STEP 4: Supply Year 1 Fund w/ INDIE & Create Reserve
The Year 1 fund is designated 1,000,000 INDIE tokens from the 10,000,000 Project Creation tokens. The remaining 9,000,000 Project Creation tokens will be held in “Reserve” for the purpose of future token launches, which can be held at any interval of time.
1,000,000 Economic Sustainability tokens are also designated towards the Year 1 fund, but not sold. These tokens will instead be distributed to the artists according to the Intellectual Property (IP) produced. As rule of thumb, when artists are funded with USD by The Label, they are also awarded that dollar amount in INDIE tokens. The remaining 9,000,000 Economic Sustainability tokens will be held in “Reserve” for the purpose of future token distribution.
Artists are incentivized to continue creating value for The Label in order to create additional demand for INDIE, thus appreciating their dollar value holdings of INDIE.
STEP 5: Set the Theoretical Market Cap
The first token launch (to finance the Year 1 Fund) will include 1,000,000 INDIE being sold for ETH at a valuation of 1 INDIE = $1 USD (in ETH). Thus, after a successful token launch, The Label will have been funded $1,000,000 of ETH by their fans for 5% of the total supply of INDIE. This sets the market cap of INDIE at $20,000,000.
STEP 6: Private/Public INDIE Token Launch
The 1,000,000 INDIE tokens can be sold in either a private or public token launch. If everything goes as planned, The Label will be the recipient of $1,000,000 worth of ETH in exchange for 1,000,000 of their INDIE tokens.
STEP 7: Successful funding of Y1 Fund
After a successful INDIE token launch in Step 6, the Y1 Fund will be home to $1,000,000 in ETH and 1,000,000 INDIE tokens. The Y1 Fund will be utilized to fund the creation of content from artists on The Label.
My Design on the AC Model’s Y1 Funding Flow Process
How INDIE Creates a Sustainable Funding Ecosystem
After the successful token launch of INDIE, the Y1 Fund will be ready to fund artists with USD and ETH. This funding will equip the artists with the necessary capital to create their content.
The essential flow that allows the AC model to be sustainable can be followed by 7 easy steps:
STEP 1: Distribute USD and INDIE to Artists
The Label, owner of the Y1 Fund, allocates USD and INDIE to all artists within their label. If funds allow, new artists that will increase the value of the INDIE Channel (the aggregation of all The Label content) can be funded with USD and INDIE.
STEP 2: Let the Artist do what they Love
With the necessary capital, artists are able to go out and create, collaborate, and innovate anything they see fit that will add value to the INDIE Channel. Whether it be a release of a single, a 2-hour mix, a documentary of their tour, or even a full album, artists will be generating content that fans will love, thus adding value to the INDIE Channel.
STEP 3: Fans Purchase INDIE through Exchanges
In order to access all of the awesome content that The Label artists created, fans must purchase INDIE on exchanges to pay for the content. Fans that participated in the token launch can skip this step, as they were early believers of The Label and were able to purchase INDIE at a discount (compared to the current price of INDIE on the exchanges).
STEP 4: Fans Spend their INDIE on the INDIE Channel
Now that fans own INDIE, they can spend the token on the INDIE Channel to unlock the artists’ content. The INDIE Channel has several different revenue models. The first model is a subscription model, where fans pay 5 INDIE a month to view all of the content on the channel. The second model is the per/transaction model where fans pay 0.01 INDIE for every play. The third model is the purchase model where fans will spend 10 INDIE on a full album and download the content as MP3 files.
In order to execute the correct revenue model, The Label will have to do a mix of the three in order to maximize their fan’s user experience.
STEP 5: Royalties are Paid to the Respective Artist Involved
Since the INDIE token can have more than 2 decimal spaces, it is possible that artists receive 0.009 INDIE for every time one of their songs are played. Smart contracts can be involved that instantly payout the INDIE to the correct artist. This is groundbreaking!
STEP 6: Artists can Liquidate their INDIE at any Time
Upon receiving their first allocation of INDIE, artists can choose to liquidate their INDIE to USD or any other form of cryptocurrency.
STEP 7: Artists Live Comfortably doing what they Love
In order to sustain their preferred lifestyle, artists will be liquidating their INDIE token for USD. A smart choice for the artists would be to liquidate enough to survive comfortably, while also holding (hodling) enough INDIE for future liquidation when the price per INDIE token increases comparatively to USD.
Note: The price of INDIE should be subject to the quality of content in the INDIE Channel and not speculation.
My Design on the How the AC Model Creates a Sustainable Ecosystem
How Fans can use their INDIE
INDIE is the key to unlocking everything The Label. Whether it be albums, concerts, or exclusive merchandise, the only way that fans can get their hands on The Label goods is through the purchase and transaction of INDIE. INDIE will be used to unlock everything on the INDIE channel, which is the central hub of everything INDIE. Therefore, the content created by the artists of The Label must be high enough to generate a growing fan base that will purchase INDIE. The growing demand for INDIE will appreciate the value of each artist’s INDIE (IP) and thus correctly compensate content creators for their artistry according to the demand for their music.
1. Unlocking/Purchasing Music
- Subscription Fee: Unlimited Streaming for 5 INDIE/month
- Fee Per Play: Charge 0.01 INDIE per play
- Purchase Fee: Charge 1 INDIE to purchase and download song as an MP3
2. Watching Tour and Concert Videos
- Ad-Free YouTube where the creators are compensated fairly for their content
- Can be tied to the revenue models above
3. Purchasing The Label Concert Tickets
- Concert tickets can be exclusively sold on the INDIE Channel for INDIE token
- Or with the existing model, concert tickets can be discounted 30% or so if purchased with INDIE
4. Accessing Fan-Only Content/Events
- The Label partners with another music label and offers an event that’s free for INDIE holders of more than 100 INDIE
- Free Private Parties are hosted for INDIE holders who have more than 100 INDIE
- Sneak Peaks are unveiled to subscribed INDIE holders
- Artist mixes are only available under the subscription model
5. Loading-Up on The Label Merchandise
- Exclusive The Label merchandise can only be purchased with INDIE
- Exclusive The Label collaboration merchandise with name brands can only be purchased with INDIE, with the location of the pop-up shop only disclosed to those who own 100 INDIE or more
- 10 INDIE for a T-Shirt, 15 INDIE for a hat, etc.
- 100,000 INDIE for a Private Event where The Label artists perform for you
6. Governing The Label as a Decentralized Music Label
- This is an interesting one and can only work if The Label wants to make itself a decentralized music label (a label not governed by a single person/group)
- With this model, INDIE holders get to decide which artists are funded based on their artistic abilities
- There could be a happy medium where The Label has half the power and the INDIE holding community has the other half (or a 51%/49% model to rule-out ties)
Examples of Independent Music Labels that can Thrive with their own Token
The following independent music labels have the correct vision to adopt and thrive with the Artist Consortium token model. Although I have no current relationship with any of the labels, I am big fans of each and would be happy to be in touch with them to further discuss tokenizing their label.
Simply comment below or DM me on Twitter @eamunoz_me ;)
FoFoFadi Records: FOFO Token
The FoFoFadi Crew at Broke LA
FoFoFadi Records is a collaborative group of artists with animal names such as Trippy Turtle, Cha Cha Chimp, and Pretty Panda. Through their creation and distribution of FOFO token, the AC tokenomic model will be created where fans fund the development of FoFoFadi content (music, videos, concerts, etc.) and access them on the FOFO channel through FOFO token.
Mind of a Genius Music Group: MOAG Token
The MOAG Logo
Mind of a Genius Music Group (MOAG) is an independent house record label founded in 2013 and home to big artists like ZHU, Gallant, and THEY. With the MOAG token, Mind of a Genius will be able to further expand their line of artists and create a hub where their vision is shared with the world.
Soulection: SOUL Token
A Soulection event in Berlin
Soulection is an independent music label, online radio show, and artist collective from LA who have a vision to bring smiles to everyone’s faces. They are a group of people with a worldwide audience powered by passion. Their quest to find the Sound of Tomorrow constantly raises eyebrows (in a good way) as they are a major cornerstone towards the development of new, experimental musical styles.
Their Sound of Tomorrow motto can be echoed through their SOUL token as they create a sustainable funding ecosystem for artists who love what they do.
Next Steps
The musical community the AC model is designed for, Liga de Artistas is having their token launch on November 12th.
Once again, big thanks to SingularDTV’s post about the Artist Consortium model for inspiring me to create this piece.
Thank you for your time :) Feel free to hit the clap button and share with friends! If you have any comments, feel free to mention them below!