Audius: The Spotify Killer
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Introducing Audius
In 2020 the music industry generated $43 billion in revenue, but only 12% went to content artists. Furthermore, artists have minimal control over how their music is distributed and little visibility into who is streaming it.
Audius allows artists to distribute to and get paid directly from their fans and is comprised of the following components:
An efficient token economy powered by the Audius platform token ($AUDIO), 3rd-party stablecoins, and artist tokens.
A decentralized storage solution and ledger for sharing audio and metadata.
A unique track encryption scheme paired with a programmable mechanism to unlock user-specific proxy re-encryption keys for content.
A discovery protocol for users to efficiently query metadata.
A decentralized governance protocol, whereby artists, node operators, and fans are individually and collectively enfranchised in decision making about protocol changes and upgrades.
Growth Narrative
Founded in 2018, Audius is a music platform on the border of Spotify and Souncloud. The company operates a decentralized music streaming service with a social networking component. It allows artists to share their tracks on the app and directly connect fans with artists.
From a technical perspective, it is a blockchain protocol that allows artists to produce immutable, time-stamped records of their work, secured by a decentralized network. Initially, Audius was based on a sidechain of Ethereum but migrated to Solana to take advantage of the network's performance. Audius launched its private alpha in 2019, followed by its testnet in August of the same year.
Then, the company opened its platform to the public in September 2019. Finally, Audius created iOS and Android apps in early 2020. These considerations (following the authors' rights, distributing income, facilitating the transactions) even concern the revenues since 90% of the platform's profits will go directly to the artists. In July 2021, the platform claimed to have surpassed 5.3 million users, up from 2.9 million in 2020. Users listened to tracks 7.5 million times during April 2021, the most active month for Audius to date.
This entire ecosystem is built on the AUDIO governance token, which is currently capitalized at $3.2 billion. In addition, AUDIO saw a strong gain in September, concomitant with Audius' latest fundraising announcement.
In August, Audius' AUDIO token nearly doubled in value in one day, thanks to the integration of TikTok. Audius was the first to use TikTok's Sound Kit feature to enable the transfer of songs into the app.
Innovation
Don't just own the album. Own the platform.
A refrain popularized by Audius summarizes both the project's philosophy and mode of operation.
Based on blockchain technology (initially Ethereum and now Solana), a distributed masternode approach, decentralized applications (dApps), as well as a range of smart contracts, oracles, and curation and indexing systems, the architecture that supports Audius aims to reduce the music industry equation to its simplest form.
The artist as a content producer.
The consumer of said content.
In the middle, the network allows the meeting between supply and demand, itself animated by the Audius community invested with various roles and functions, accompanied by rights, duties, privileges, and incentives.
A revolutionary new deal that naturally finds its audience! No more multiple, ever-greedy intermediaries and no more centralization. No more "it's either this or nothing" a real sword of Damocles hanging over the heads of artists in a world where the visibility brought by the giants of the global audience represents success or failure.
Basically, the Audius protocol is based on a network of nodes (or masternodes). Each of these nodes allows for the storage of a certain amount of an asset called $AUDIO, which we will come back to in a moment.
Audius has two different types of masternodes on its network:
Discovery nodes:
To index and hash data such as user profiles, playlists, and followers.Contents nodes:
To store and relay audio content (tracks, mixes, etc.) broadcast on Audius.
Anyone can operate a node. To do so, they must comply with a certain level of requirements. An operator can choose to run a Content Node, a Discovery Node, or a combination of both. The amount of $AUDIO tokens put into play for a given operator can be thought of as its economic bandwidth for running a combination of services on the network.
It is the sharing of the workload between 2 different masternodes that guarantee the availability of the media.
Content Nodes:
Content Nodes are a set of user-managed nodes that ensure the availability of audio content and metadata on the Audius streaming service. For this purpose, the network uses the AudSP protocol, its native extension.
AudSP is a decentralized and independent storage solution developed on the peer-to-peer network "IPFS" (Interplanetary File System).
In other words, AudSP allows checking the encrypted files sent by the content nodes and, as you may have understood, meets the fans' demand.
Note that these content nodes are, most of the time, users who want to contribute to the network but also artists who want to host their own content without going through intermediaries.
Discovery Nodes:
Discovery Nodes are a metadata indexing mechanism that allows fans to discover new content, as well as easily navigate the streaming service. According to their white paper, the system ensures that this indexing is decentralized, easy to use for customers, transparent, and highly flexible.
These discovery nodes allow the community to access the different interfaces and categories available on the site in simple terms.
To guarantee the reliability and maintenance of the protocol's content and services, node operators are required to tie up a certain amount of assets in staking. This is a form of security that guarantees the protocol's services.
Denominated in $AUDIO, it ensures that node operators have tokens that they are willing to risk and possibly lose in the event of malicious or poor behavior.
Thus, using $AUDIO as collateral, anyone with the required hardware (a computer or server and bandwidth) can become a node operator without needing any authorization. The more $AUDIO tokens pledged as collateral, the more secure the network is from outside attacks.
Operating a Discovery Node involves pledging a minimum of 200,000 $AUDIO tokens (and a maximum of 7,000,000). A Content Node requires $AUDIO 200,000 (and a maximum of 10,000,000 tokens).
It should be noted that it is possible to participate in the system with as little as 100 $AUDIO tokens, which can simply be delegated to the operators of larger nodes.
The status of the network (i.e., the number of active players, the amount of $AUDIO tokens locked in staking, etc.) can be consulted in real-time on the AUDIUS dashboard.
This is an opportunity to see that the project is growing rapidly, with 6.5 million active users, 311 million AUDIO tokens in staking, and 85 million requests over the last month at the time of writing this article.
Disruptiveness
Audius aims to address a variety of issues:
Lack of transparency regarding artists' payment processes.
Incomplete data on ownership of rights often prevents artists from properly compensating.
Several intermediary parties slow down the payment process for artists.
Publishing rights are complex, with no incentive for the industry to produce reliable and accurate data.
Due to rights management issues, remixes, covers, and other derivative content are censored.
Licensing issues prevent PSDs and content from being accessible worldwide.
Audius tries to solve these problems by:
Paying users in proportion to how much value they add to the project.
Making artists engage directly with their fans.
Through governance, which must be earned by adding value to Audius and shared consistently among the user groups contributing to the protocol.
Prices and revenues for participants must be consistent, predictable, and transparent.
Access should be democratized; anyone can contribute to Audius if they follow the protocol rules, and all information is publicly available.
Intermediaries should be eliminated where possible; if necessary, they should be algorithmic, transparent, and verifiable.
It should be noted that some of their solutions do not precisely address the point in question, such as the issue of intermediaries and democratized access to the protocol.
Audius is pioneering what it sees as the future's music distribution system, bringing human orientation into the music streaming industry. Artists can sign up and upload for free without having to sign with the platform, while fans can also use the platform for free (for the content that artists choose to share freely).
The platform has onboarded over 100,000 artists. Audius claims to offer the highest quality sound across free music platforms, supporting streaming and downloads at 320kbps.
Competition
Audius is competing in a difficult niche, with industry giants like Spotify, SoundCloud, YouTube Music, Apple Music, Tidal Hifi, and Amazon Music Unlimited already dominating artists and audiences. But while these platforms have the artists and brand recognition, they lack the decentralized nature of Audius.
As for players in the same blockchain-based league as Audius, the main competitors include: Song That Owns Itself (STOI), Songcamp, Catalog, and upcoming platform Royal.
Concerns
One of the main criticisms of Audius is that the platform cannot monitor copyright infringement due to the lack of a central operator. This raises concerns about the downloading of pirated material, to the point where some claim that the platform will be a copyright nightmare.
Audius announced on Twitter that it is implementing a community-based arbitration system based on a network of neutral, third-party arbitrators who will vote on moderation cases and copyright claims to address this issue.
The second challenge for Audius will likely be to integrate artists and listeners who are already on SoundCloud, Spotify, and other music streaming giants that have dominated the industry over the past decade.
How will Audius entice artists and their audiences away from the industry giants?
Team
RONEIL RUMBURG
Co-Founder & Chief Executive Officer
Roneil most recently co-founded Kleiner Perkins' early-stage seed fund. At KP, he was responsible for seed investments into Blockchain and AI companies, including Lightning Labs. Roneil attended Stanford University and previously co-founded a Bitcoin peer-to-peer payment company called Backslash.
FORREST BROWNING
Co-Founder & Chief Product Officer
Forrest is a Forbes 30 Under 30 recipient and most recently was a Co-Founder of StacksWare, an enterprise data center management platform started from a Stanford University research project. The company provided analytics at scale for Fortune 500 customers and was successfully acquired in late 2017.
CHRISTINA ROWLAND
Head of Operations
Previously head of operations at Kleiner Perkins Caufield & Byers (KPCB). She studied at UC Santa Cruz.
DHEERAJ MANJUNATH
Head of Engineering
Previously Co-Founder & Director of Engineering at Triblio. He studied computer engineering at VCU.
MICHAEL CULLEN
Community
Founder of music label Phuture Collective and previously an Account Manager at Uber Eats. He studied Business Management at Cascadia College.
In addition to these heads of departments, there are no less than 80 employees working on the Audius.
Partners & Backers
Advisors
Collaboration
Tiktok:
August 16, 2021, marks the beginning of a very promising collaboration with the famous Chinese application, TikTok. Indeed, the developers of this world-famous application have decided to integrate Audius into their ecosystem, dedicated to a brand new feature called "TikTok Sound".
In simple terms, this option will allow content creators to add musical sounds from the Audius streaming service directly to their TikTok videos with just a few clicks.
A very good way for artists to get known, but also for the community to discover new talents, still little known by the general public. This announcement marks a big step forward for the whole Audius project and its developers. It's worth remembering that only a few months after its arrival on the crypto market, it partnered with one of the most famous video-sharing applications of the moment, counting nearly 800 million active accounts worldwide.
The magnitude of this announcement has allowed the AUDIO crypto-currency to enter the top 100 crypto-currency rankings, rising 150% in just a few days. Indeed, the token price rose from $1.62 to nearly $3.96 before beginning a slight correction that was entirely legitimate.
Phantom Wallet:
In September 2021, the Audius team announced on their Twitter account a second collaboration, but this time with the wallet "Phantom".
Indeed, this new wallet developed on the Solana blockchain is mainly used by users wishing to get NFT (non-fungible tokens) through various marketplaces dedicated to that.
That's why the team decided to implement this famous wallet on their streaming service. While it doesn't serve as a launchpad for these unique coins, it does allow their community to display their NFT collections directly on their profile.
NFTs on Audius act more like engagement and social tokens, unlocking additional goodies and abilities.
Once again, a very good initiative allows people who haven't heard of this new sector to get interested and thus dive into this universe full of opportunities.
Fundraising Round:
Audius has secured $5 million in funding from leading names in the industry, including Katy Perry, rapper Little Nas X, The Chainsmokers, and Jason Derulo.
The Rolling Stone reported that Martin Bandier, the former CEO and Chairman of Sony/ATV Music Publishing, is also a backer. The funding was secured after the Spotify rival reached the six million user mark.
Investors:
Community
Communication
During the last month, Audius has been very active on Twitter. The community is constantly updated on the progress of the team behind the project by making AMAs on Twitter, video conferences on YouTube, giveaways as mentioned above, etc.
Size And Engagement
Price
Token Release Date
October 23, 2020
Product Release Date
Audio Mainnet was released on October 23, 2020
Market Capitalization
$659,274,752 – April 12, 2022
ATL
$0.07774 – November 03, 2020
ATH
$4.99 – March 27, 2021
TA Analysis
First, let's take a look at the monthly timeframe:
After the first impulse to the upside in March 2021, AUDIO has formed a major channel bound by the body of the impulse candle. Also, after the correction and with a decrease in volatility, it left two important monthly levels, among which a minor channel was created.
To this day, neither of the new monthly candles has closed outside of it. These levels remain significant. Therefore we can build our investing idea around them.
Now, let's take a look at the volume profile (same chart, daily timeframe):
It is pretty clear that POC (red line) and VAL and VAH (blue lines, marking boundaries of the volume area channel, low and high respectively) are very well respected, which adds a lot of confluence along with the previously mentioned monthly levels.
The most recent price action tells us: after a decrease, strong support was found at the VAL, where the price bounced to the POC and expectedly met significant resistance, which was eventually broken and went towards VAH, but with the last market correction, it took a step back and now retesting that same POC level which may act as strong support now.
However, there is also a chance if POC doesn't hold, AUDIO may revisit the VAL level once again.
So, by merging our candle analysis with volume analysis, we can conclude:
The asset in moving with a well-defined range, bound by MONTHLY levels and VA levels within ~$0.7 to ~$2.5-$3.2, and having some important levels in between.
All of these levels are significant, and we can expect some price action to form back and forth around them. Therefore, we can identify our investment/trading plan:
If BTC shows a positive dynamic to the upside, POC will most likely act as good support and help AUDIO to move upwards; however, we also need to consider a negative scenario of a deeper correction (down to VAL again), so it would be wise to split buy orders into two parts (POC and VAL), getting an average entry around $0.85 if both orders are triggered.
Based o that, we can take a few different options:
Trade VAL - POC - VAH back and forth with some take profits in between (POC, higher range VAL, monthly) for more active market players.
DCA into an investment, secure ⅓ of our tokens within VAH - channel TOP, and hold the remaining “free” tokens, expecting this channel to break to the upside (which is very likely given the long term fundamentals) and eventually taking profits at $5 and higher, given that the potential for this project is very underestimated.
Markets
Tokenomics
The total supply of AUDIO is 1 billion tokens, with a current circulating supply of 615m AUDIO. The yearly inflation is 7%, and 50 million AUDIO were distributed to the top 10 artists and fans, with 75% going to artists based on stream count.
The token distribution is as follows:
23% to pre-mined rewards and airdrops.
36% to investors
41% to founders and the protocol itself.
Incentives To Hold
In October 2020, Audius dropped $8M worth of its token to the top 10,000 users on the platform. Just recently, they've announced more systematic plans to award $AUDIO tokens to users.
Here's how users can start gaining a stake in Audius:
Have A Top 5 Weekly Trending Track On Audius: Each Friday at 12:00 pm Pacific Time. The top 5 trending tracks will each receive an on-chain reward of 100 $AUDIO sent to their Audius wallet. They've updated the Trending page to show a crown next to the top tracks.
Have A Top 5 Weekly Trending Playlist: As with Trending Tracks, the top 5 trending playlists as of 12:00 pm Pacific Time on Friday afternoon will each receive an on-chain reward of 100 $AUDIO sent to your Audius wallet.
Be a top 10 Monthly API App: If we drive traffic to Audius, starting in May 2021, we'll receive an on-chain reward of 500 $AUDIO to our Audius wallet.
First Verified Account Upload: If we're verified on Twitter or Instagram, Audius will verify our account on their platform as well. Simply upload our first track and tag @audiusproject on Twitter and/or @audiusmusic on Instagram, and a member of the Audius team will reach out to us to confirm our reward. Once we're eligible for these rewards, a member of the Audius team will reach out and ask us to verify our phone number either through Twitter, Instagram, or email. Once we're verified, we'll receive $AUDIO directly into our Audius account.
25000 holders share $AUDIO tokens, a significant number in the crypto environment, as well as a mere beginning for a project that is currently approaching $1 billion in market capitalization.
Currently, $AUDIO is evolving at the 106th place in the market. The status of the network (i.e., the number of active players, the amount of $AUDIO tokens locked in staking, etc.) can be consulted in real-time on the AUDIUS dashboard.
This is an opportunity to see that the project is growing rapidly, with 6.5 million active users, 311 million $AUDIO tokens in staking, and 85 million requests over the last month, at the time of writing this article, generating a 22% ARR.
Not financial advice. The Crypto Intelligence Report is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Do your own research and make an informed decision.
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