Open Editions are back.
In the search for the perfect mint format, let’s explore this new mechanism and its implications.
What are Open Editions?
Open Editions are time-based drops.
Simply define a price per edition, a start time, and a duration.
So long as you show up during that defined time period, you mint at the same price as everyone else.
There is no upper bound, meaning that theoretically millions of editions can be minted if there is enough demand.
This format made its way to Sound last week, and we saw top-tier artists like Daniel Allan, RAC, Matthew Chaim, Reo Cragun, Oshi, Bloody White, San Holo, Mija and LATASHA all take it for a spin.
Nifty Gateway Open Editions
Open Editions have been around for years.
At its peak, these markets were extremely active, with open editions immediately trading on the secondary market following a 5 minute mint period.
For early traders, these drops were extremely lucrative.
There were dozens of examples of buying an open edition for $1000, and the floor trading at 5-10x the price just 10 minutes later.
This soon made its way to musicians, with many A-list artists experimenting with open edition drops on Nifty Gateway as their first entry in the space.
Examples of this included The Weekend, Grimes, Madeon, Illenium, Halsey and many more.
But here’s where it started to fall apart.
After minting anywhere from $100k - $1M following a 5 minute open edition, these creators had no clue what to do.
They were met with harsh reactions from fans who expected something of value, and were seemingly not delivered.
Open editions promised nothing more than a piece of art.
In practice - collectors expected creators to engage with their holders and help bring them value.
So - around the middle of 2021 - open editions started to fizzle out.
As the market started shifting to fixed-supply, quantifiably rare collectibles in the form of PFPs, open editions took a back seat.
Zora Open Editions
That is until recently.
Within the last 3 months, we’ve started to see a rebirth of the original open edition concept with new parameters.
Instead of $1000, these editions were being priced for less than $20.
In the case of collections like Checks by Jack Butcher - what started as a 0.0066 ETH mint has now soared to a floor of 0.68 ETH.
This is due in large part to the notion that there is no cap on supply - the audience defines the supply.
** **This has unlocked a new mentality.
What if supply was determined by the audience, rather than the creator.
Sound Open Editions
The hardest part of being an artist on Sound is having to choose your supply and price.
Artists are constantly surveying the market - trying to gauge what a good supply is for their songs, how many to assign for a presale and how many to a free mint.
These added variables take the focus away from what matters most - the music.
So, I’m personally very excited about the introduction of open editions on Sound.
It paints an accurate picture of an artists current reach, and allows them to easily onboard new collectors in the case of high-demand creators who consistently sell out with the first minute of a drop.
Here’s a look at how some of the early drops performed.
Now let’s look at the floor price on these collections:
On paper, all of these collections are trading at a significant premium to mint, despite no supply cap.*
*Note - while the floor price may be up, there is little to no volume on these collections.
The takeaway is that despite holders having conviction in the mints, open editions have decreased secondary market volume.
In rare examples - like San Holo - Don’t Look Down - we actually saw a decent amount of sales following the open edition closing.
This is where opinions start to change.
Bear Case for Open Editions
No supply cap can lead to very large primary sales.
More primary sales makes it harder for a secondary market to emerge and sustain.
In the case of Nifty Gateway, open editions resulted in creators making millions at the expense of the collectors getting fleeced.
The lack of a defined supply makes it difficult for bigger collectors to know how to get involved, since targeting an ownership percentage is no longer intuitive.
All that goes to say - people are skeptical about Open Editions.
Bull Case for Open Editions
Collecting needs to be simple.
Artists choosing a supply and price makes it difficult for minting to take place at scale.
Open Editions are a great way to test the waters. They remove the pressure of having to sell out while allowing the market to fairly determine the supply of a collection.
In the case of cheap mints, it's a great way to get people over the line.
RAC saw nearly 1000 editions minted in his first drop back since 2022 - a great way to incentivize him to keep dropping.
For newer creators, it's the most effective way for fans to prove that they were there first.
Rather than needing to make sure you beat someone in a gas war - simply show up anytime during the open edition and receive the same asset in return.
“In the grand scheme when you look back, it was open for 1 day. This is a very small amount of time in the history of the amount of content an artist will release over time” - BlockchainBrett
Anything less than 1000 items of something on the internet is pretty scarce, especially in the case that a creator goes on to have a viral moment years down the line.
Open vs Fixed Editions
The best way to think about Open Editions is another tool in the tool belt.
Creators in web3 can directly influence the value of their content through scarcity.
It's perfectly fine (and in fact encouraged) to have one song minted as an open edition for 0.01 ETH for 5 days, followed by another drop of 25 editions fixed at 0.05 ETH.
The variety gives collectors a good understanding of how to think about your music, as it creates a spectrum that separates different songs based on the final supply.
Open Editions are not the end all be all.
For collecting content to scale, we need always-on liquidity models.
There is no one right answer for this (yet), but it’s something to be on the lookout for.
Imagine if you could come to a song and always have a liquid price to purchase it as.
As a collector, you can always sell the song and have immediate liquidity.
This was the beauty of Uniswap and the AMM. There was always a market so long as there were liquidity providers.
The market is still search of the liquidity solution for Music NFTs.
Let’s see who cracks the code first.