Tag: DAOs

Under the loop: tokenized music communities in Seed Club’s 4th acceleration cohort šŸ•µļø

Posted on | by Bas Grasmayer

Weā€™re at a unique moment for innovation in music. This moment stands shoulder to shoulder with the Napster moment and the early web2 moment that gave rise to Music Hack Days, Spotify, SoundCloud and pushed into prominence music distributors as startups.

Themes of this moment include all things ā€˜metaverseā€™ (whatever that means nowadays), livestreaming and other virtual interaction models, and the realities of web3 creating community empowerment and opening new sources of revenue for artists which can knock a 0 off of the old 1,000 True Fans adage.

Today I will focus on the latter: web3, which should come as no surprise to regular readers. The web3 can be noisy, especially if you havenā€™t found your niche yet. Some of the smartest teams Iā€™ve ever interacted with are operating in this space, whether thatā€™s through NFT marketplaces like Catalog, Mint Songs or Sound.xyz, to communities like Water & Music, Songcamp and Friends With Benefits, to organisations that create infrastructure for a much wider space, like Zora and Mirror.

If you wanted to stay up to date with the latest ideas 10ish years ago, youā€™d follow blogs like Hypebot, MusicThinkTank and TechCrunch and learn about the latest music startups. Youā€™d scroll through the wikis of Music Hack Day to see what developers had been creating by mashing together APIs – maybe even giving them a follow on Twitter.

Another great way is following what startup accelerators are picking for their batches. Specialized accelerators like Techstars Music make this especially easy. If youā€™re interested in web3, you have many accelerators to pick from, though there are few as approachable and easy-to-understand as Seed Club. Seed Club specializes in tokenised communities. Instead of investing in communities with money, it swaps its token for a % of an accelerated community ā€” in exchange, communities learn about tooling, tokenomics, community building, incentivization structures, DeFi, and get network and visibility in the web3 space, plus are introduced to the club of alumni. Itā€™s an interesting model and Iā€™m fairly convinced weā€™ll see versions of this swap-model in many accelerators, since it aligns long-term incentives so well. Whatever emerges to be the YCombinator of this generation (maybe thatā€™s Seed Club), will have some form of this model.

Before I continue a disclosure: through past participation in Seed Clubā€™s community, I hold some of their tokens. I also hold a Zora Zorb, am in Mirrorā€™s DAO, hold Friends With Benefits tokens, hold Water & Musicā€™s tokens, hold Songcampā€™s Elektra tokens, and have purchased a music NFT through Sound.xyz. I also wish to participate in some of the projects mentioned below. I hope this also illustrates how interconnected, supportive and community-driven the space is.

What should the music biz know about Seed Clubā€™s cohort 04?

Seed Club just announced their latest cohort. It provides an excellent snapshot of this moment in time, so I would like to highlight the ones that I think are especially relevant to the music business, though I highly recommend browsing through them all. A project Iā€™m spending the majority of my time on is also in there, which Iā€™ll save until last.

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You can find the full announcementĀ hereĀ and tweet threadĀ here.

šŸ’¾ FLOPPY

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Floppy is a web3 based decentralized audio workstation (DAW) and first person sampler (FPS). I donā€™t know how and when, but they arose out of the Songcamp community when I missed two or three calls when I was on holiday last year. You can read more about the project here.

šŸ§¬ GROW YOUR OWN CLOUD

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GYOC wants to let artists launch their works in the data format of the future, DNA. Their mission is to transform data centres from carbon creators to carbon absorbers using DNA data storage technology.

šŸ’¬ IMPSSBL

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IMPSSBLā€™s Proof of Story project develops characters with AI-written stories. Over the past years, world-building and narrative creation have become ever more important assets and skillsets for artist teams. Things like this can help, or perhaps even spawn AI-based virtual pop stars (also read: your own personal AI-music star).

šŸ§° METALABEL

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ā€œMetalabels are a new kind of label. Metalabels are groups of people working under a common identity for a common purpose with a focus on releases ā€” distinct public works that reflect and manifest their views.ā€

Metalabel aims to provide the tools, resources, funding, community and support for culture labels that extend beyond music. Their founding team includes the founders of Kickstarter, Ampled and Etsy.

šŸŽ» MuseDAO

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Iā€™m excited about this community bringing classical, historical and roots music into the web3. Thereā€™s definitely a very loosely connected network of people from these domains of music active in the space, however this area of music, with centuries-old institutions, could definitely do with more concentrated collaboration and it looks like MuseDAO intends to carry that torch.

šŸŽ› MUSIC OS

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MusicOS aims to make use of the open nature of data, protocols tooling in web3 and build a dashboard for fans and musicians to use. At least, thatā€™s how this reads. Phenomenal team, by the way. Stay tuned.

šŸ“† SONGADAO

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SongADAO, for now, is the story of Jonathan Mann, whoā€™s been recording and posting one song per day since 2009. Thereā€™s a fascinating backstory to the DAO, which was crowdfunded by selling all the ā€˜Song A Daysā€™ as NFTs, so I highly recommend you check out Jonathan on the Bankless podcast.

And yes, as said, Iā€™m also building a community thatā€™s going through Seed Club – read about it here and follow us on Twitter.

What’s cooking in Music DAOs? MusicFund, Dreams Never Die, Water & Music, FWB Gatekeeper, Polly, XYZ & Club BPM

Posted on | by Bas Grasmayer

The Web3 is about the “fundamental reorganisation of the internet towards ownership, data portability & being able to ascribe value to our digital assets.” This quote, by Zoe Scaman who’s also behind the New Creator Manifesto, perfectly describes what has so many people so excited to work with DAOs, NFTs and tokens.

At this point in time, it takes quite a lot of onboarding to make the web3 click for most people. Until it clicks, a lot of what’s happening understandably looks like a grift. Or, to be more accurate, it’s hard to distinguish the grifts from the genuine attempts to reorganise the internet towards something less extractive. For some people, the moment it clicks is when they start using crypto wallets to login to services and take their decentralized username along for the ride, which is why I’ve recorded a primer to get folks set up to do exactly that.

What may also help make things click is hearing about relevant examples of this reorganisation of the internet. Currently, there are probably a dozen or two experiments every month that may contribute to the reorganising of music’s digital value chain in a way that benefits creators, fans and their surrounding communities more directly. Here are some of the ones I’ve come across recently.

MusicFund

The MusicFund is a community for discovering, funding and curating music. People can join by minting one of a total of 10,000 generative NFTs. The funds raised are used to create grants for artists and to support the community. Currently, these grants are distributed by allocating 1 ETH to a batch of three curated artists, which is then split based on how the community votes, with the top contender taking 0.6, and the runner-ups 0.25 and 0.15 ETH (at time of writing, 1 ETH is about $4300 USD). In order to vote, one must log in with their wallet which must hold a MusicFund NFT. Its latest line-up is curated by Before The Data, successor to music blog Hillydilly, which is also running a DAO of its own.

Disclosure: I was airdropped a MusicFund NFT.

Dreams Never Die Records DAO

Dreams Never Die is a label by the same crew as Before The Data & Hillydilly. It aims to help artists at their earlier stages. Now, by organising itself as a DAO, it intends to “become an incubator for brand-new artists and aspiring music business talent alike, built around an incentivized and aligned community that participates in discovering, developing, distributing, and promoting the roster.”

It’s in its earliest stage, having only just done its first town hall discussion on Discord and hasn’t raised funding yet. If you’re new, this is a great stage to get involved or just go along for the ride and see how the organisation evolves by idling in their Discord.

Water & Music

If you’re not familiar with the phenomenal publication and community Cherie Hu has set up, and I occasionally contribute to, you should check out Water & Music and consider subscribing. They’re now being accelerated by Seed Club, which specializes in tokenized communities, in order to develop a ‘new collaborative research model’ which I assume will see token distribution based on community contributions. Its first collaborative research report covers spatial audio and just before Halloween the community kicked off a large collaboration to document music & web3.

Again, early stage, so it’s a good time to get involved.

FWB & Web3 Ticketing

Blockchain-based ticketing isn’t new (GUTS Tickets comes to mind), but this initiative is notable because it originates from a DAO. The Friends With Benefits DAO is a social community of creatives and builders. When, post-pandemic, it was possible to start meeting IRL again, the DAO started throwing token-gated events.

Token-gating is a common practice in DAOs, it’s used in the above example from MusicFund to restrict voting to members only and is also commonly used to close off certain Discord channels to the community. FWB wanted to be able to token gate live events and developed its own tool for it called Gatekeeper.

They’re making the app available to organisers and other DAOs to experiment with it.

I think examples like this are exciting, because anyone can build something on top of anyone’s token. If I want to organise a music conference in Berlin and I want to give free attendance to people who have earned a lot of tokens by contributing to FWB or Water & Music, I can set that up (of course, I recommend being diplomatic about it). No central body owns the community or the relations between community members: the token is held by the participants of the network. It’s an empowering type of decentralization.

Disclosure: I hold FWB tokens.

Polly

One of the most creative technologists & musicians I see experimenting in the web3 right now is Troels Abrahamsen, who I know from Songcamp. He runs a number of projects, which you can read about in this thread, but I want to highlight a specific one called Polly, a tool (or smart contract) that is just entering development. It’s “a proof of concept label backend for releasing simple semi-on-chain singles as collectibles.

XYZ

Another musician I know from Songcamp is Colt, who has just announced a new DAO called XYZ which aims to “continuously and sustainably release original, high-quality music onto web3 and web2 channels, building expertise in music distribution in the crypto era.”

The project just raised 4.5 ETH ($20k at time of writing) in funds by selling NFTs & dropping its own $WAV token to the community, which will be used for governance.

“In the future, participants will earn $WAV for participating in the production and sale of music NFT releases. Each release is an event that brings more token holders into the DAO.”

Club BPM’s BPM Bot

To round things up, I wanted to highlightĀ BPM Bot. WhenĀ YouTubeĀ started shutting down music bots, the Songcamp community wanted a way to keep playing music on Discord, so theyĀ raised fundsĀ for the development of a bot that plays music fromĀ CatalogĀ NFTs. To me that’s exciting, because it brings more visibility to these songs, thus increasing the value of being the owner of their NFT. It’s web3 communities linking and utilizing open data and interoperability to build tools to create value and utility together. Itā€™s currently used on 47 Discord servers.

Disclosure: I participated in the BPM crowdfund and hold some tokens.

This list is not meant to be exhaustive. I think it’s currently possible to set up a daily newsletter to document everything that’s happening in music x web3 (I’ll consider serious sponsorship / bankroll offers, DM me). A great daily read about DAOs in general is ForeFront‘s #ff-daily channel on Discord.

I hope this communicates the energy, excitement and creativity in the space. I also hope it shows that people who are working on projects that, traditionally, would be competing are now figuring out ways to make their projects interoperable, because everyone stands to win from that.

Regardless of tokens, NFTs and cryptocurrency, these are amazing, vibrant and supportive communities of people who want to create new things together in order to support musicians. You can bring your skills to the table without knowing how any of this web3 stuff works. That’s how you start learning and that’s how you eventually start seeing the value of communities owning the value they generate.

3 levels of DAO involvement for musicians (and those who love music)

Posted on | by Bas Grasmayer

The internet is entering a new era of community. The web3 has unlocked the possibility for communities to easily come together across platforms, which gives communities a sense of ā€˜realnessā€™ that doesnā€™t feel the same as being on a web2 platform. Web3 gives people collective ownership of their community by holding tokens in their web3 wallets like MetaMask or Rainbow. This means itā€™s not the tech giants owning your data and the actual community; itā€™s the community that owns itself.

Digital products are trying to service these communities by letting them sign in with their own wallets, utilizing and keeping their own data. Thatā€™s a big departure from the walled garden approach of app stores and contemporary social media giants. This gives many of these communities, also called DAOs or decentralized autonomous organisations, a feeling of actual agency. Besides the fact that the space is ā€˜earlyā€™ and loads of rails still have to be built out, I think itā€™s this unspoken sentiment of agency which is energizing the people moving into community-based social media rather than social feed-based social media.

So how do you participate?

Level 1 – observe & support

Almost everyone starts here. When joining communities, just take some time to get a feel of whatā€™s going on, whatā€™s being shared, what are the values, who are the key people involved, etc. You might learn about adjacent communities and may have a look at them too. If a community is not your cup of tea; move on.

If you find a community that you do resonate with, the easiest thing you can do is support. Show love, be part of celebrating, amplify what members are doing (e.g. by spreading the word). Anyone can do this and it hardly requires any onboarding or understanding of the intricacies of the DAO.

Level 2 – advisory, component-building & storytelling

Once youā€™re actually part of a community, it will be easier to start chiming in when it comes to topics you have specific expertise about. For many reading, thatā€™s music or the music business. In a creative community, ā€˜chiming inā€™ doesnā€™t just mean speaking up occasionally; it also includes making things.

What shape that takes really depends on the way the community is set up. One example is a recent contest Songcamp ran in which musicians could submit intros for Seed Clubā€™s new podcast.

Things can also be more organic. Once youā€™re part of the community and see something that can be improved, do it or organise to do it. Itā€™s a similar mentality as what you see in the free party scene where visitors are expected to contribute to the party, which sometimes means dozens of soundsystems from all over the continent gathering to throw an event open to participants for free.

This is the stage where ideas and proposals start to take shape:

  • We should have a landing page, so people can get an idea of what weā€™re about;
  • We should have local chapters;
  • We should create better ways to onboard new people to the community;
  • What if we had generative PFPs for all members?

Etc.

Even with a few hours per week or per month of writing, organising, developing, or making, you can achieve a lot together with a community.

Level 3 – governance

If youā€™re interested in a larger commitment, you can get involved in governance, which is something youā€™ll find natural paths towards through active contribution in most DAOs. This usually requires a pretty decent understanding of most web3 dynamics, such as tokenomics and tooling, or at least the willingness to learn. (DAOs tend to figure things out along the way and good new tools enter the sphere on a weekly basis)

However, governance is not about technology. The technology enables us to deal with existing problems in better ways than we have before. Just to name two examples of non-technical topics for DAOS:

  1. Moderation and community guidelines.
  2. Onboarding members.

In my opinion, more DAOs should think about how they onboard new people, so that these communities can be more inclusive of people currently underrepresented in the space.

How to find DAOs

The easiest way is to install Discord and join every server of communities, tools and marketplaces that seem interesting to you. Check in on a few channels regularly and ignore or mute the rest. If youā€™re enjoying a community, start unmuting channels. If you hear about a community, consider checking it out.

Here are some great Discords to start with:

See you in the metaverse.

The web3ā€™s user-friendliness barrier for music

Posted on | by Bas Grasmayer

Setting up a Decentralized Autonomous Organisation (DAO) is a clunky affair when compared to more centralized variants. But maybe that’s the point?

I was recently asked when DAOs will feel more like installing an app and there are definitely accessibility hurdles to be overcome for these organisations to become a common phenomenon in music. Here’s my thoughts.

Firstly, I do think we’ll see DAOs become mainstream, but not until some of the least user-friendly aspects are resolved. Setting up wallets, gas costs and treating mobile as an afterthought are 3 points of friction that come to mind. I’ll dive into them here.

Secondly, the point of a DAO is to organise as a group on your own terms, using your own tools, and participating in the value you generate together. Part of that value may be represented as shares in the project (in the form of tokens) and part of it may be cash (in the form of cryptocurrency). That’s complex and usually requires all sorts of documents, contracts and perhaps even notaries. So in that sense,Ā the expectation to make DAOs as simple as installing an app is unrealistic, but further maturing of tooling will definitely make things easier.

Wallets

In order to participate in DAOs you’ll need a ‘wallet’. I recently recorded aĀ 10 minute how-to, that actually turned out to be 30 minutes long, which highlights some of the complexity well.

This wallet allows you to participate on the blockchain utilized by the DAO. It lets you make transactions, interact with smart contracts, send and receive tokens (incl. NFTs), as well as cryptocurrency. It also functions like a single sign-on that you can use to interact with blockchain-based tools, platforms, and communities.

There’s a way around the wallet requirement: you could do things ‘off-chain’ for people without a wallet, which means the organisation centrally records transactions & what people are owed without writing it to a blockchain. Whoever has a wallet can move all their assets ‘on-chain’. Many tools, like Collab.land, already do this by recording your tokens alongside a user ID such as your Discord account until you withdraw them to a wallet that has a blockchain address.

šŸ”® I expect Facebook to eventually integrate wallets into their offering. This means that people would be able to open a wallet on the social network and be able to use Facebook’s one-click login on web3 platforms too. This will remove a lot of friction from the space (although I really don’t think you should be using Facebook).

šŸ”® I also expect banks and financial tools like PayPal & Cash App to eventually have wallets for Ethereum & other popular blockchains. They’re already doing Bitcoin.

Gas costs

Shortly after I published my video about how to set up a cryptowallet, the transaction fees (gas costs) on the Ethereum network climbed to around $50. That means that even if you’re trying to perform something that’s free of charge, you may still have to pay $50.

Gas costs have recently been a lot lower, but no matter the sum, it will take education to explain to people why certain interactions require money on an internet where everything has always felt like free. It depends who I’m explaining it to, but I tend to explain that instead of selling your data to advertisers in exchange for a service, you pay the network directly to process your transaction and host all the data. But how does a musician explain this to their fans?

Here, too, doing certain things ‘off-chain’ can help cut costs, but decentralization gets sacrificed.

šŸ”® Ethereum’s transition toĀ Proof of StakeĀ will help a lot. I also expect ecosystems around other blockchains likeĀ TezosĀ andĀ FlowĀ to mature, which have both found their own ways to keep gas costs low.

Mobile as an afterthought

Mobile phones are the world’s most important personal computer. For most people around the world, they’re the only real personal computer they have access to; that’s just theirs and doesn’t have to be shared.

Unfortunately, many web3 projects highly prioritize the desktop experience. It’s understandable why: that’s the environment in which builders are creating, so especially in this early stage it’s hard to expect everything to be perfect on mobile phones. There’s a thin line between afterthought and neglect however and if we’re serious about onboarding people to web3, we have to do a lot better on mobile.

šŸ”® The size of the opportunity of making the web3 accessible to the mainstream will drive organisations to prioritize mobile. Currently, a lot of the pieces are still being put in place, but I expect a period of growth to follow especially once some of the other clunky aspects mentioned in this article get ironed out. That’s when the web3 goes mobile.

What does it mean for music?

My guess is we’re about 1.5 to 2 years away from things like NFTs and DAOs going mainstream. The biggest obstacle is user-friendliness. DAOs don’t have to be as easy to install as an app, but right now it will be hard for artists to onboard their audience to a fanbase DAO. While artists with ‘crypto native’ fanbases may be able to gain traction with a DAO, the barriers will remain high for most other artists. What those artists could do is tap into creator economy trends and tooling in order to set up the foundation of their community in a more centralized way and then extend it with web3 aspects that may not appeal to everyone straight away. The same goes for event organisers.

Why Iā€™m participating in Songcamp Elektra āš”ļø

Posted on | by Bas Grasmayer

Songcamp started late March with a simple idea by Matthew Chaim:

This is a place for music and the new internet to crash into each other.

5 weeks later, 13 strangers had made roughly $34,000 USD through their creative collaboration which they sold as NFTs.

I watched from the sidelines excited to see artists find new ways to collaborate, be onboarded to Web3 tools, terminology, and mindset, and make money along the way. This was exactly the mentality I was referring to in my piece Thinking small: a meditation on scale vs success for artists which encouraged musicians to consider options beyond the rat race of streaming, charts, playlist pitching, and constant touring.

Now, the second season of Songcamp has kicked off and I’m glad to be able to help out the music teams in a strategic capacity. Season 2 is called Songcamp Elektra.

Steep learning curves

Once you have some basic experience with web3, many interactions become fairly easy. You’ve bought some cryptocurrency, transferred it to your wallet, acquired some tokens, maybe bought an NFT, registered your name on ENS (also an NFT, by the way), and joined a DAO where you vote on community proposals. From here on out you’re fairly familiar with some of the topics, they become easier to research, and every next step is less daunting than the previous one. It makes it easy to forget about the steep barriers to entry.

There are two barriers to entering the space: one is tech literacy and the other is economical.Ā As I was onboarding a friend the other day, so they could register their ENS domain, I was actually shocked how much work getting set up was. I spread that out over months, but doing it all in one go was a lot.

We went through:

  • TheĀ MetamaskĀ sign up process, which is unconventional for many web users, since it requires people to securely store a phrase they need in order to access their wallet. That comes on top of a password. This practice is more common in banking than in most web services – very logical once you’re onboarded, but perhaps less so if you’re ‘just signing up for a thing’.
  • An issue adding funds to the wallet, since Metamask’s partner that allows you to buy ETH (Wyre) seemed incompatible with their bank. Maybe it was another issue, but in any case: repeated errors.
  • Registering atĀ CoinbaseĀ to acquire ETH. Coinbase requires ID verification, so you have to upload a photo and wait for review. (if you have tips for easier methods, let me know)
  • Me sending them ETH instead.
  • Being quoted a price on ENS and then having to pay ‘gas fees’ on top.
  • When registering their name on ENS: needing to wait for minutes in order for the transactions to clear. This can make people who are used to a fast web, and fast URL registration, quite nervous.

This is tough and requires a serious commitment from people. Suddenly, the streamlined UX landscape of the internet breaks down and things get clunky. For most people, that’s daunting, which is why I wrote a piece clarifying all these terms recently for my newsletter.

What I like about Songcamp is that it helps onboard people. It is really helpful to do these things as a group and to have a trusted group of peers you’re collaborating with in case you run into trouble or have questions.

Financial barriers

I’m concerned about how hard the web3 can be to participate in if you don’t have much disposable income. The way things work right now, it feels very much like pay-to-play. I’m glad there are projects like The Mint Fund which helps underrepresented creators mint their first NFT by covering their gas fees and offering additional support, however people shouldn’t have to rely on funds in order to be able to meaningfully participate.

The way around is participating in a DAO. You can collectively raise funds and then grant participants tokens, which they can convert to cryptocurrency or fiat in order to accomplish their goals.

Songcamp did a version of this for their first season when they sold an NFT in order to raise funds to cover the camp’s costs.

Group experimentation

Together, we’ll be doing a lot of firsts. I haven’t minted an NFT, I haven’t been part of a split, and as a matter of fact it’s been a while since I could lend support to artists from the very beginning of their creative process until post-release.

Songcamp is about firsts: both on an individual level, a collective level, as well as in a more general sense. The general firsts are that the creative experiments Songcamp is running haven’t been done yet before. As a collective, it’s our first time collaborating and many people inside the collective have never met each other before. On an individual level, this is a first for the aforementioned reasons, but also because there may be web3 firsts like those I mentioned in the intro paragraph of this section.

Fun & valuable

Most of all, it’s fun. I started the article with a sum of money to get your attention, but nobody is in this for the money. We have no idea what the outcome will be. Instead, it’s about collaboration, learning, experimenting, creating, socialising, and inspiring.

It’s exciting to be able to participate. I think the time commitment may even be similar to a well-prepared conference keynote about a topic I haven’t spoken about before. But in that same amount of time, I directly help creatives (and myself) with everything I’ve described above.

The most valuable thing we’ll get out of this is that we’ll learn skills, tools, and ways of organising. We’ll develop new perspectives. All of this will compound with previous experience and make it easier to start or participate in any subsequent web3 projects thereafter.

–

MUSIC x is a regularĀ newsletterĀ about innovation in music.
Follow us on TwitterĀ @musicxnetwork.

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Blockchain basics: how to start a DAO

Posted on | by Bas Grasmayer

My recent writing has focused on the community dynamics of blockchain-based ‘Decentralized Autonomous Organisations’ (DAOs). I’ve explored:

In this article I will attempt to explain some of the more technical aspects in clear terms for people with little to no experience with these topics. I’ll be diving into the steps outlined in a tweet by Jess Sloss of Seed Club, a DAO that builds and invests in communities.

There’s a comment section below. If anything is unclear or could be worded better: let me know either with a question or by spelling things out more clearly yourself.

How to bootstrap a DAO

People familiar with English-language startup terminology will be familiar with the term bootstrapping: to start something using nothing but your own funds (or in some cases: zero funds). Continue reading to learn how a DAO might do that.

You can’t have a DAO without a great community. I won’t go into that for this piece, but recommend reading How to grow decentralized communities by pet3rpan (before you click out of this website, consider joining the newsletter, so we can reach you in case you get lost in a rabbit hole ;-)).

šŸ“„ Drop an NFT or series (on chain revenue)

I think by now, for many people, non-fungible tokens or NFTs have become synonymous with auctionable digital artworks. This is not incorrect, but it’s a little bit like saying MP3s are music, while actually it’s a technology that has lots of uses in terms of audio encryption. A slightly better way of thinking about NFTs is as collectibles.

Non-fungible tokens allow for tracking ownership, as well as functionality like ‘splits‘ which are commonly used to make sure the original author gets money (in the form of cryptocurrency) every time their NFT is resold. This is done through smart contracts: little computer programs linked to a blockchain database that run whenever certain actions are performed or conditions are met.

Although the most publicised use case is 1 NFT of a unique artwork being sold, there are also countless examples of collectibles where 10 people can buy NFTs that represent identical artworks (e.g. this NFT by musician Sevdaliza). The former case would be described as a 1/1 and the latter as a 10/10 run, like a collectible. A series could be a set of NFTs, like a bunch of 1/1s, multiple 10/10s, or any mix like a 1/1 and a 5/5 drop.

This creates on-chain revenue: value stored on the blockchain that the DAO will use to let the community participate and distribute ownership. That revenue is stored in cryptocurrency.

A recent music-related example of a DAO that funded itself with an NFT sale is Songcamp. With the on-chain revenue, it could afford to cover the fees associated with ‘minting’ (creating) an NFT for the participating artists in its first songwriting batch.

šŸŽ Give NFTs to dope people (on chain community)

On chain community means that you have a way to track, via blockchain, who are the people in your community. Since tokens like NFTs allow people to see who owns them, it’s an easy way to trace ownership back to a DAO (the link between the DAO and the recipient is forever recorded).

  • Step 1: create an address for your DAO on a blockchain by setting up a wallet which allows for transactions and storage.
  • Step 2: create NFTs with that address.
  • Step 3: send the NFTs to addresses of people you want to add to your community.

Now there is a link between your address and theirs, through the NFT. You can see this happening in the above screenshot, but strip away the interface of the auction house and you get something like this.

Here you can see the transfer of a token from one address to another, here indicated as club.eth, which is the same @club from the Zora auction house screenshot and actually also the Seed Club referred to at the start of this post.

A community or service can let you sign in using your wallet (e.g. Metamask) which is a little bit like the type of ‘Single Sign-On’ you’re used to around the web from Google, Facebook, and Twitter. It can then check your wallet for any NFTs or other tokens (I’ll get into this) and grant you special privileges, ranging from simple access to more advanced features.

I was recently lucky enough to get voted into Mirror, a kind of crypto version of Medium, but way more interesting (thanks for the votes!). To participate in the vote, you have to connect your wallet. If you win, Mirror transfers an access token to your wallet. On Twitter that looks like this:

On Etherscan, a tool to read about transactions on the Ethereum blockchain, the above looks like this:

Here you can see 1 address sending 10 tokens to 10 addresses through the execution of 1 smart contract (you can read the code of that contract here). Bonus points if you can figure out which address I hold. šŸ˜‰

Overwhelming? No worries, the user experience is easier than setting up an internet connection or email in the 90s. In the end you just need a browser extension like Metamask’s to log in to Mirror and when it sees you hold the correct token it presents you this simple interface for creating your account:

šŸ›« Launch Snapshot + token gated Discord (gov. infra)

To set up the DAOs ‘governance infrastructure’, you can use a tool like Snapshot to let people submit and vote on proposals, plus you create a community for token holders (I’ve described token gating in the previous paragraphs). The latter is commonly done through Discord.

Here’s an example of a proposal for CabinDAO: a community that is creating a cabin residency program for select creators.

Here the community (or DAO) is voting on a linked proposal. It’s essentially deciding to commit a certain amount of funds (15 ETH) and community tokens to the program.

There’s a list of voters – 15 in total. They’re shown as addresses on the Ethereum blockchain and since Jon Gold has registered his name through ENS, I can recognize him and search for him elsewhere. For example, I can see he used his $WRITE token to join Mirror a few months ago. The votes are ranked by the number of community tokens someone holds (the bottom 13 are cut off). I haven’t looked into exactly how CabinDAO has distributed tokens so far, but usually they’re awarded to early community members and rewarded for participation, contribution, or in exchange for things (or cryptocurrency).

šŸŖ‚ Airdrop ERC-20 tokens (governance to the ppl)

I’ve explained non-fungible tokens already, but haven’t gone into detail about other types of tokens.

ERC-20 is basically the technical standard for token implementation on smart contracts on the Ethereum blockchain. Remember Mirror awarding 10 people with tokens to join their service? It happened in 1 transaction through the execution of a smart contract.

While no two NFTs are alike (and commonly use the ERC-721 standard), ERC-20 tokens are fungible, meaning that they can be interchanged with one another. In simple terms, if I send you 1 $WRITE token mentioned above and you send me 1 $WRITE token, we end up with the same in the end. Trading NFTs would typically leave us with two distinct items.

Through your community’s smart contract, these tokens can give you voting rights or participation rights in a DAO, e.g. access to a Discord server or the ability to vote on proposals on Snapshot or similar.

This is where you might award the buyers of the NFTs with a certain number of tokens created uniquely for your community through aforementioned smart contract, e.g. if it were for my newsletter’s community, I might call them $MUSICX tokens. You’d also give early community members and other supporters some tokens in your community. This incentivises them to get active and start participating in the governance.

This process of distributing tokens among your community is called ‘airdropping’. Now, there’s just one thing remaining:

Use ETH / Tokens to go do cool shit

Like the Friends With Benefits DAO, you could let people buy their way in through exchanging a cryptocurrency (ETH) for tokens ($FWB). This means as a DAO, you have a certain liquidity from token sales. So as a community, you can use tokens to incentivize certain actions (e.g. creating a residence program for artists in a cabin) and you can use ETH to cover certain costs, from renting the cabin, to infrastructure, to perhaps paying a few developers to build your website.

That’s it. All of the above is using the Ethereum blockchain, but there are other blockchains out there that support similar functionality.

Go organise your community and if you’d like to invite me – send me a token at basgras.eth or a tweet @basgras.