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Music NFTs: there is almost no other chart in crypto that looks like this in 2022
Music NFTs in 2022: Part 1
2022 was one of the worst years ever for crypto, and NFT volume dropped 90%.
And yet somehow the growth of music NFT collectors looks like this.
Web3 music definitely had a “moment” this year.
But how did this happen, and what’s coming next?
In this two-part recap, we take a look back at the story of music NFTs in 2022.
Part 1: Sound.xyz
Part 1 will focus on independent artists on Sound.xyz.
Of course, it’s not the only platform, but it’s the only one I have clear data for and it tells the story well. Part 2 will focus on all the other major events in Web3 music this year.
All the data comes from Nico Elzer’s Dune Dashboard.
Disclosures: I own many of the NFTs mentioned in this article. They are marked with an asterix.
January - February
Sound.xyz entered the new year with early drops from Pussy Riot, Latasha* and Iman Europe*.
Things were different back then.
It was still a bull market and music NFT drops were following the crypto-art model.
Ultra scarce, exclusive and expensive.
The first drops on Sound were limited to 25 editions.
Priced at 0.1 ETH (~$400 at the time).
The narrative at this time was like owning a piece of art.
There were only a few drops per week and it was accessible only to a few wealthy collectors.
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Snoop Dogg* drops on Sound.
This was a huge moment and the first big edition (1,000 NFTs).
It also marked the peak of secondary volume and we’ve never even got close to that level since.
Salem Elise drops ‘Crypto Boy’ on Sound.
864 editions, all the money raised for The Center for Reproductive Rights.
It was another big boost for collector numbers - but this song was also the pico-top of the NFT bull run.
The Terra Luna collapse happened in May and killed all activity across the entire industry.
Although “Crypto Boy” boosted the collector numbers in May, you can see the real impact of Luna on the secondary volume chart.
It just vanished.
June - August
Everything flatlined in the next three months.
Collector growth was flat and volume was almost non-existent.
There were just 10 drops on Sound in June.
Artists began setting lower price points to see if there was any appetite out there.
At the end of September, Reo Cragun launched Frameworks*.
It was the biggest collection in months (~330 editions).
And a much lower price point (0.033 ETH / ~$40)
The new ‘meta’ was born.
Music NFTs were no longer ultra scarce and ultra exclusive.
It was all about low-priced drops and high editions.
This is a good thing… for all the reasons I wrote in this thread previously.
More artists onboarded.
Network effects = momentum.
More accessible for fans
Artists develop a bigger community of collectors.
Sound Protocol also launched at the end of September.
This signalled that Sound would soon be open to all artists.
… And that an entire ecosystem of other music apps could be built here. It also meant that artists could host their drops on their own website.
This all played a part in the wave of music NFTs that came next.
October - November
All of a sudden Sound ramped up the number of drops.
You can see the spike in the chart.
From 10 drops in July to 138 in October.
Almost all of them were very low prices (free or 0.01 - 0.05 ETH)
In late October through November, Mija* drops 18 tracks in a month which really confirms the new strategy.
Artists start dropping free mints with hundreds of editions.
You can see that spike in the total number of song NFTs minted.
TK drops 700 NFTs
Getting close to the end of the year we saw another big, ambitious project.
TK* sold out 700 NFTs at 0.05 each. It was the biggest drop since Snoop, Salem Elise and the crypto crash.
Monthly collector growth hits a new monthly high.
Record new collectors
This new meta drew thousands of new wallets to the space.
And the average wallet now holds 6 music NFTs (which is very cool to see).
It’s more accessible, more inclusive.
What about sales volume?
Sales volume trended higher into the end of the year but it’s still way down from the highs.
Sales volume isn’t everyone’s favourite metric but it’s really important context.
Despite lots of new drops and collectors, there is still less money in the ecosystem.
We ended the year on a high note with a huge drop from Daniel Allan* and Reo Cragun*.
Sold out in less than an hour.
This sent active wallets to another record high.
I think we probably just hit a local top for music NFTs.
Daniel and Reo are the two biggest independent artists in Web3 music so it’s hard to see something topping that in January or February.
I could be wrong!
Why are music NFTs holding up so well?
It’s the same reason that cryptoart is also holding up through the bear market.
This is not about quick flips and trading (of course there is some of that). But it’s more of a long-term vision in the artists and the space itself.
These are not PFPs or speculative access passes. They’re not projects built by opportunistic founders.
They are artists who will be here creating no matter what.
Good music is timeless.
It’s important to look at the collectors, too. Almost all of the biggest collectors are crypto veterans. They’ve been through the cycles before so they’re not panic selling.
What could be improved in 2023?
The trend towards more collectors is great but this needs to grow even bigger in 2023.
The music NFT market is still reliant on a small number of collectors (no shade - they have single-handedly built an entire new market for music). I would love to see even more whales come in with new perspectives, new artists.
Sound gets a lot of criticism for being a curated platform so I hope to see it open up to even more artists next year and see developers use the Sound Protocol to build new applications.
Curation will also be key in 2023.
If this ‘meta’ continues with hundreds of new artists entering the space, we’ll need more curation.
We need the equivalent of blogs, playlists, tastemakers, radio to sift through all this music. This will be my biggest focus with Ziggy Ziggy Music. Stay tuned :)
That’s a wrap on Part 1.
I’ll be back soon with Part 2 which will dive into some of the bigger Web3 music projects like WarpSound and the major label efforts like KINGSHIP and Probably a Label.
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