DAOs Primed to Play Key Role in Artist-Fan Relationship: ‘It’s Not About Remaking the Old Industry; It’s a Whole New Thing’

The relationship between artist and fan is ever evolving and how it will look in the years to come will not at all resemble its past. So as music and Web3 intersect, questions are being explored. Like, what drives music fans from a human perspective? With the majority of people accessing music through streaming platforms, do most artists even own the relationship with their fans? What are the first principles of music fandom, and what does that look like in the Metaverse?

Most of us have heard of the potential of Web3, but even beyond NFTs and the Metaverse, there is a new capability to organize communities around a common goal. Just as Web3 is rooted in a decentralized online experience, a Decentralized Autonomous Organization (DAO — pronounced like “dow”) applies similar principles to support this new method of establishing and incentivizing communities.

Think of DAOs like artist fan clubs with omnidirectional capability, meaning that the interaction is not just a broadcast from artist to fan. It is a deeper experience with all members providing value and participating in the results. Imagine one fan is a marketer, another a graphic designer and a third is an attorney all participating in a DAO created by their favorite artist. Through a thoughtful and equitable governance system, these contributors could be rewarded for applying their skills to the DAO, all while helping their favorite artist.

Which brings up a key misconception about DAOs: that they are fully automated or algorithmically-driven entities that require little human interaction. While smart contracts are typically incorporated to automate decision-making and operations, success still depends on people. At inception, the founders of a DAO are deeply involved in building the philosophies that will eventually drive automation. For example, every DAO needs a framework that gives the community its rules of the road, helping determine how new members can join, how they decide what to work on, and how to reward contributions.

According to Seed Club co-creator Jess Sloss, DAOs are sense-making organisms sparked by a call to adventure. Seed Club helps innovators build their own DAO. Twenty-five percent of Seed Club’s projects are music-related including Songcamp, which brings producers, writers and musicians together to incubate new methods of creation. With a rise in the desire for meaningful work, these communities offer a way to quickly connect with like minds, share experiences and collaborate on projects.

One fact about DAOs that is difficult to grasp is that they are more emergent than directed, but some of the most powerful systems on our planet are non-hierarchical. For instance, the activities of forest ecosystems thrive without board meetings and micromanagement. Communities, even music audiences, are composed of individuals with unique experience and particular skill sets. What if the superpowers of each community member could be harnessed with an equitable value exchange occurring between the community and that individual? Imagine music fans applying their skills to helping an artist grow and share in the benefits.

A trend to watch is the development of tools that reduce the technical complexities that can exist when creating a DAO. Syndicate is a decentralized investing protocol and social network that provides tools for starting and managing DAOs. Today, they announced their Web3 Investment Clubs, which are based on the concept of traditional investment clubs that initially gained popularity in the late 1800s. According to Syndicate, since investment clubs are member driven, virtually any community can create one — and they are generally not regulated by the SEC provided they follow certain guidelines.

Those guidelines include a limited number of members and ensuring all members have a say in the investment decisions. The regulatory and legal aspects are top of mind for the early adopters of DAOs, and Syndicate believes they have carefully navigated these concerns leaving their users with a clear peace of mind. Says Syndicate cofounder Ian Lee: “DAOs enable human and financial capital to organize and coordinate in entirely new ways natively on the internet. They empower communities with the tools to invest their time, talents, and money in the people, projects, and missions that matter to them — no matter how big or small in scope that mission may be. That will enable more creativity, as projects that might not have been funded before will now get the support they deserve to get into the world.”

Even those with a rich history in the music industry are developing DAO-based projects. Anthony Marshall, founder of Lyricist Lounge, is close to announcing a project in the DAO space. Some say DAOs provide an opportunity to reimagine old systems. Marshall says, “DAOs are a new model that just feels better. People have invested in hip-hop culture with great returns, but the lion share of those returns haven’t gone to the creators. It’s not about remaking the old industry. It’s about a whole new thing. We are not absorbing music the way we used to. Back then, music itself had a different level of value. Now the artists and creators deserve to benefit most with ownership, funding and access. Artists are way beyond their music. DAOs will allow artists to finally actualize whoever they want to be.”

If ConstitutionDAO could raise $47 million and galvanize a community of thousands in seven days to attempt to buy a copy of the U.S. Constitution, there have to be ways to apply similar concepts to music. Web3 is clearly in the nascent stage of development. We are witnessing captivating experiments, and while they may not be the ultimate solution, they will certainly inspire us and feed our collective understanding. The intersection of music and Web3 will be a playground of projects resulting in deeper and more meaningful connections between artist and fan.

Jeremy Gilbertson is a metaverse methodologist and the head of music at Infiniteworld.

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