Posted on Mar 28, 2023Read on

Introducing Sound Swap

We’re excited to launch Sound Swap.

Sound Swap is a new feature that allows you to one-click collect and sell editions of your favorite songs.

Now, you can mint editions of a song at any time for new Sound Swap drops, even after the primary sale ends.

As new editions are collected after the primary sale, funds are stored in a liquidity pool.

As the pool grows, you can instantly sell your editions at the current market price.

Sound Swap automatically determines the price based on how many editions have been collected, serving as a price discovery mechanism between supply and demand.

Read on for more details.

Why we’re launching Sound Swap

Our two main goals at Sound have always been 1) to help artists make money on their music and 2) to reach as many people as possible.

Today, artists are limited to accomplishing that within a fixed timeframe (Open Edition) or a fixed supply (Fixed Edition). In order to take Sound to the next level, we needed to align incentives between artists - who often want to reach as many people as possible with their music – and collectors – who want to bet on a song or artist and be rewarded for being early.

Specifically, there were three issues we wanted to solve with Sound Swap.

  • Supply - Even if a song goes viral after the initial drop, the edition count is frozen and the community cannot expand. A song with 25 editions is forever capped at a maximum of 25 collectors, and new fans can only collect if and when existing collectors decide to list.

  • Price - Artists are pressured to pick the perfect price for their drop and its success is defined by whether it “sells out” or hits a certain number of mints within a short time frame. With Sound Swap, collectors control the market price and supply once the primary sale ends.

  • Liquidity - It takes time to match buyers to sellers, particularly for songs with a lower edition count. Additional liquidity has the potential to unlock more value for music that is otherwise discounted by an illiquid secondary market.

Sound Swap alleviates pressure from artists needing to pick quantity & price, enables more collectors to mint over time, and rewards collectors for being first.

How it works

1. Primary sale

Songs using Sound Swap will start with a 24 hour Open Edition at 0.005 ETH per edition.

Music is meant to be inclusive, and a more approachable mint price in the primary means that more collectors can afford to participate.

The Golden Egg is revealed after the primary sale ends – meaning you had to be there early to win.

During the primary sale, artists earn 95% of the proceeds.

2. Collect after the primary sale.

Now, you can mint after the primary sale ends, giving you more opportunities to collect your favorite songs.

With each edition collected, the price of the next edition increases.

As new editions are collected on Sound Swap:

  • 7.5% goes to the artist (similar to what happens today on secondary marketplaces)

  • 2.5% goes to Sound

  • 90% is stored in a liquidity pool

As the pool grows, you can instantly sell your editions at the current market price.

3. Instantly sell your editions.

As editions are collected on Sound Swap, a portion of the proceeds are reserved as liquidity for existing collectors if and when they decide to sell.

Example: If 50 editions are collected in the primary and 10 editions are collected on Sound Swap, then only 10 editions can be sold. Once 10 editions are sold, you can no longer sell on Sound Swap unless additional editions are collected.

When you sell editions, you’re instantly paid based on the current market price from the liquidity pool.

The price per edition decreases with each edition sold. Once the liquidity pool is depleted, no further editions can be sold on Sound Swap (but you can continue to list on Sound Market and other secondary marketplaces).

Debuting Sound Swap with Reo Cragun.

We’re excited to debut the first Sound Swap drop with Reo Cragun for his new song, “Spent”.

The primary sale starts on March 28th at 4:00PM EST and will be a 24-hour open edition at 0.005 ETH per edition.

Sound Swap activates when the open edition ends on March 29th at 4:00PM EST.

Closing Thoughts

We’re excited to continue building tools for artists that help them get paid for their music and reach as many people as possible, while simultaneously creating an ecosystem where collectors can mint their favorite songs, support their favorite artists, and be rewarded for being there first.

Each song has its own unique lifecycle that ebbs and flows with the influence from artists and their fans.

Instead of limiting songs to a supply of 25 editions or a 24-hour open edition, Sound Swap enables songs to grow over time while continuing to reward early collectors.

It’s the first of many features aimed towards making Sound accessible to the mainstream.

We’d love to hear your thoughts on Sound Swap. Join the discussion on Twitter or Discord.