Intro

With the emergence of web3 we are seeing a transition where the average person is able to invest in culture, where their expertise is, instead of being forced to play the increasingly complex wall street game that is foreign to them.

People are now able to invest in online communities, memes, visual art, music, and more.

An entire financial industry will blossom around these new types of assets, but the thesis behind Audio Guild is that those who were experts in handling other types of assets such as commodities and stocks will likely be completely unqualified to work with these types of assets. Leaving large opportunities for those who are.

Specifically, Audio Guild is focused on investing in music. After gaming and visual art have done so this year, music is likely the next asset class to boom in web3 and it has a multitude of ways that it could take shape, with offerings such as 1/1 songs and on-chain royalties, among others.

Mission

The goal of Audio Guild is to connect people who have demonstrated world class skill in picking successful artists early in their careers with the capital they need to meaningfully invest in them in a way that is profitable for both those involved on the inside as well as outside investors.

But what exactly does that mean? Let’s take a step back and look at what a record label is. A record label is basically an investment fund that is focused on investments in musical artists. However, where they make their actual money is acting as gatekeepers to the music industry. What this means is that they don’t actually have to be very good at picking their investments, because whoever they pick, they just use their position in the industry to make sure the artist they’ve picked is the one that breaks through, regardless of whether they’re actually the most talented.

This is why they can afford to have talent scouts who are business school graduates that are experts in marketing instead of people who have been writing music blogs since they were 15.

We believe that as music becomes a genuine investable asset this gatekeeping dynamic is not going to last. The fact that people will be financially incentivized to find up and coming artists means that it will be much more collectively decided which artists get big. When people have money on an artist's career, that will act as a much stronger marketing campaign than a record label can provide.

A way of looking at this transition is similar to how the hedge fund space grew from the 1980s to the 2000s. The 1980s was all about inside information, who knew who, and really had nothing to do with data and advanced mathematics.

Flash forward a couple decades and the markets are run by mathematics and physics graduates, and the type of person who succeeded in the previous markets is likely struggling to find their edge in today's version of the game.

The thesis behind Audio Guild is that a similar transition will happen very soon in the music industry. Except instead of quantitatively gifted people becoming the drivers of the industry it will be those who have their fingers on the pulse of what the trends are in music. This kind of person we will refer to as a “tastemaker”, those who can spot talent early because of how embedded they are in the culture will become valuable similar to how mathematics graduates became very valuable to hedge funds.

What Audio Guild aims to do is connect these people with the capital they need to succeed in a way that is decentralized, open to all, and in coherence with the basic principles of Web3. Without Audio Guild these people would likely not have the capital necessary to make big bets. Similar to how most traders on wall street could not make bets with millions of dollars if a hedge fund didn’t allow them access to their capital.

How It Works

The Guild could use a combination of tokens and NFTs to serve various functions and roles throughout the organization.

There could be two levels of NFTs, one representing council members and one representing tastemakers.

Council Members would be composed of dedicated early community members as well as others along the way who provide key values to the guild. The council would act similar to “the board” of a traditional corporation. The council members would vote on all important decisions of the guild, including inducting new tastemakers.

Tastemakers would hold their own NFT given to them by the council for displaying a true ability to pick ultra talented artists out early in their career. As time goes on, it will get easier to reliably identify quality tastemakers at scale as there will be an on-chain record of who supported an artist and when.

Additionally the role of tokens would be to represent shares of the underlying value of the guild. The reason for holding the token is it would basically act as a very well managed index on music royalties. This would be attractive to outside investors because if they buy individual songs instead, unless the songs are absolute classics they run the risk of fading to zero streams over time, whereas with the DAO they will have exposure to a multitude of songs that are in various stages of their lifecycle.

A system could be constructed so a certain percentage of the value generated by the guild gets distributed to the council members, tastemakers, token holders and the guild treasury respectively.

Roadmap

Due to the early stages of the web3 music industry, it would likely be best to try and grow with the industry instead of going zero to one hundred all at once.

The guild could move forward in three phases.

Phase 1: Build something along the lines of the Pleasr DAO or Flamingo DAO with a focus on the web3 music industry. A community that works together to curate and invest in pieces that are part of the spaces history.

Phase 2: Once we have a strong core community, start scouting and recruiting potential tastemakers. Build connections with individuals in the space as well as establish Audio Guild as a part of the ecosystem.

Phase 3: Have everything set up so that we have people on both the finances, management, and marketing sides of the DAO that are elite at their roles.

It’s Time To Build

If you are someone who is passionate about music and crypto, and want to be an early part of a project that is seeking to be a major force in the new paradigm of the music industry, you would be a great fit at Audio Guild and we look forward to welcoming you.

Feel free to contact me on twitter @rohaan_0x if you have any questions about the project in it’s initial phase.