When we built Sound, the vision and mission was to create a world where any artist has complete creative control of their art and career without compromising the ability to own the relationship with their audience. In order to do right by artists and their communities, we had to make careful product decisions that allowed us to test our hypotheses about the future of music in a way that would allow us to generate real insights without sacrificing the trust of musicians, listeners, and collectors. We’ve learned a massive amount in a relatively short period of time.

In less than a year, we’ve onboarded 165 artists who have collectively released 270 Sounds. Artists on Sound have earned over $3.4 million across primary sales and secondary royalties, and each dollar earned was paid out accurately, transparently, and instantly. In the traditional music industry, that equates to over a billion streams and most of the payouts would not yet have even occurred.

A new music industry that values music is upon us. As we like to say, we’re just getting started, but we remain deeply convicted that music NFTs are here to stay for the following four reasons

The foundational principles of Sound continue to ring true, but we want to continually push towards a world where artists can create freely, collectors can support the musicians they love, and listeners can find new ways of engaging with the music they love.

At Sound, we’re constantly re-examining the path ahead of us to make sure we’re doing what’s best for the ecosystem, not for Sound itself.

Right now, we onboard artists with a white-glove experience to help them reach new collectors.. We love what we get to do on a daily basis: creating the future of music with a community that truly cares about music.

But the time has come to expand the boundaries of what’s possible through Sound.

Introducing Sound Protocol

We’re opening the Sound Protocol and setting the stage for a rapid expansion of what’s possible with Music NFTs.

The Sound Protocol is a way for anyone to mint Music NFTs using our smart contracts.

It’s a permissionless base layer that is separate from the Sound Application (sound.xyz).

The Protocol facilitates the creation of artist-owned song contracts featuring permanent and decentralized metadata and modular architecture that allows for custom drop experiences. Designed with composability in mind, the Sound Protocol is a new canvas for artists and developers alike.

The contracts are available in our public repo, but let’s walk through the high-level details:

1. Permissionless base layer

Previously, Sound would add an artist’s wallet to an allowlist to grant a signature required to deploy their artist contract. Essentially, artists needed to be manually onboarded by Sound to use our smart contracts.

With the new Protocol, artists can freely deploy their own Sound contract. We want to support artists experimenting with their music at various points in their journey.

The Sound Protocol will be open source and free to use. There are no fees baked in at the contract level.

2. Add a 5% fee for primary sales on Sound.xyz

At launch, we opted to defer any platform fees until we were confident that we had an in-market product that created value to both artists and listeners.

Over the last 9 months, we’ve introduced range editions, collector presales, and song splits, redesigned our landing page, created new collector and artist profiles, and more. We’re just getting started and have many more exciting features to build.

We will begin taking a 5% fee on primary sales for contracts deployed on Sound.xyz to help fund ongoing development. This will not apply to the Sound Protocol, which has no fees baked in at the contract level, making it 100% free to remix and use for all artists and developers.

3. Fully artist-owned and non-upgradeable song contracts

Previously, artists on Sound deploy a single artist contract that was subsequently used to mint their songs. Each song therefore shares the same artist contract.

Advantages:

• Artists have a single collection page on secondary marketplaces like Opensea

• Inexpensive deployment costs for the artist contract and each song minted

Disadvantages:

• OpenSea doesn’t currently enforce the NFT Royalty Standard EIP-2981, and instead has a single payout address for secondary royalties per contract address (thus preventing true end-to-end royalties for songs with different splits)

• Artists may want to customize their own mint and metadata logic for a custom experience, but our contracts currently use the beacon proxy pattern meaning that artists and developers can’t easily augment with additional logic

• Token-gating by song is more complex since all songs share the same contract address. While solvable on sound.xyz, external systems and platforms won’t be compatible

With the new Protocol, we are moving from permission-gated artist contract deployments to individual non-upgradeable song contracts. Songs are ultimately the atomic unit of music.

To keep contract deployment costs as low as possible, we will use a factory that deploys minimal proxy contracts.

The new Sound contracts will no longer use the beacon proxy upgrade pattern. While critical at launch because it enabled us to remedy any unforeseen vulnerabilities and introduce new features, it came with known security risk and trust trade-offs.

All artists on Sound will continue to fully own their contracts as we stay true to our values that artists should have self-sovereignty, creative freedom, and provenance over their music.

4. Permanent, decentralized metadata

As we mentioned in our first engineering blog post, we originally decided to serve metadata from our API in order to maximize flexibility as we experimented with different creative mechanics like the 1-of-1 golden egg and additional metadata fields (like the genesis tag).

There has been a lot of healthy debate surrounding decentralized vs centralized metadata. The tradeoff is permanence — if Sound ceases to exist, the metadata, art, and media may be lost forever.

With the new Protocol, we’re moving to permanent and decentralized metadata. All metadata is uploaded to Arweave, a decentralized storage network that guarantees permanence. Artists have full control of their metadata and can choose to update or freeze the metadata for each song.

5. Custom minting formats

Current contracts support fixed quantity or range editions. All artist contracts share the same mint logic since the contract is at the artist level which makes it difficult to switch or add additional logic for minting formats or metadata pieces on a per song basis.

With the new Protocol, mint formats can be customized on a per song basis. Mints will be compatible with our existing minting formats (fixed and range editions), with the option to plug in additional features:

• Open editions

• Airdrop editions to a passed in list

• Reserve a certain amount of editions for manual transfers by the artist

• Set price discounts for a given list of users for a given song

• Set max mints per wallet (e.g. each address can only mint a maximum of 3 of this song)

• Backend signature for high traffic mints

6. Payments and end-to-end royalties

Music is inherently collaborative and every song contract can have multiple payees: artists, producers, songwriters, managers, and labels. Because each song is its own contract, our new  Protocol makes it easy to route payments for a song back to the contract and split proceeds amongst holders of that song.

Artists will have maximum flexibility over payments both on primary and secondary markets on a per song basis:

• Splits with any set of addresses (on Sound.xyz, splits are powered by our friends at 0xSplits which are also non-upgradeable and gas-efficient); or

• Single payment to any address the artist specifies

Up next is the ability to include music-specific payment terms like hurdles (fixed amount that needs to be recouped by a party, paid first) and expiration dates (receive x% of sales for a given time period).

7. Modular and composable by design

The protocol and service assumptions are separate. This means that artists and developers are free to remix and plugin custom logic to support their own unique minting formats.

• Metadata: Artists can experiment with BYOM (bring your own metadata) by plugging in custom tokenURI logic such as generative art, onchain svgs, custom apis, iFrames, and more if they want to override the default metadata service (uploading to Arweave) that Sound provides at the application layer.

• Minting Formats: Artists & developers can write a custom minting module to introduce a different format.

• Payments: Artists & developers can input any address or develop their own payment module to use a different splits protocol or experiment with different payment schemes.

Debuting Bespoke Drops

Last but certainly not least, decoupling the Protocol from the Sound Application means that drops can be hosted by the artist outside of sound.xyz (eg, on their own branded website).

These types of drops can leverage the new Sound Protocol in partnership with Bonfire to release the album on sound.xyz AND an artist-branded website… at the same time.

For example, an album release can take advantage of almost every new feature in the Sound Protocol.

1. Custom drop experience on a custom, artist-branded website.

2. Multiple songs with varying quantities. Collectors won't know which song they minted until reveal.

3. Several minting phases (free mint, presale mint, and public mint) to reward early backers.

4. After reveal, the songs will live on sound.xyz for playback and ease of discovery.

We will take the learnings from these types of drops and roll out the album feature to everyone in the coming months.

What Does This Mean For Sound.xyz?

The Sound Protocol is and always will be fully permissionless and open-source, and it represents the beginning of a series of changes that will be designed, built, and released to the entire music community and not just artists on Sound.

Over the coming months, the tools that you’ve come to know and love will open up to the community and any contracts utilizing the Sound Protocol will be integrated with the Sound Application (sound.xyz).

While we work on these finishing touches, the Sound Application (sound.xyz) will continue to curate and onboard artists. We will continue to listen to the community for ways that we can provide more value back to the ecosystem. This will enable us to deeply understand the pain points and give us time to build a product that could find a set of ears for every song.

We think differently about the role Sound.xyz plays in the future of music because our platform isn’t designed to siphon value out of the system. A more harmonious relationship is possible, one where our platform is one of many trusted portals through which musicians and fans can find their way through a new sonic landscape.

This is just the start of a long journey to bring web3 music to the forefront of how people discover and consume music. The magic in web3 is the composability, and we’re excited to announce the genesis partners building on top of the Sound Protocol: Bonfire, 0xSplits, Arpeggi, and Heds.