The Big Idea: Audius
When I first thought about decentralized applications, my mind immediately went to music streaming services. This industry has had its fair share of regulatory control, legal issues, and tech-backed rebellions. It feels like a very easy industry for the mind to drift to when one thinks about decentralization generically. That leads me to Audius, which is a decentralized blockchain based music streaming service. Audius is one of the largest non-financial crypto applications with a very large user base but I’m not quite sold on the way it has been described…
How does Audius work?
Audius is a “decentralized, community-owned and artist-controlled music-sharing protocol”. Think of it as the blockchain equivalent to a SoundCloud. Audius inherently has it’s own cryptocurrency, the Ethereum based ERC-20 token Audius (AUDIO). The Audius blockchain has two types of nodes — content nodes that host the content and discovery nodes that index the content. The AUDIO token has three main functions:
- AUDIO has to be staked in order for one to run a node and earn rewards.
- Staked AUDIO tokens are used for governance and enable voting rights on proposals and the ability to raise new proposals.
- Artists can be rewarded by staking the token with premium features
Artists can exhibit additional control over their music by becoming nodes themselves but that isn’t a requirement to upload music. Artists are also rewarded with AUDIO tokens by reaching certain achievements (categories of these achievements vary). There is no vetting / label based approval process for artists, they can upload music right away on the platform. It is free to upload for artists and free to use for fans with multiple layers of incentives. It operates similar to any other music streaming platform with uploaded music being logged on a blockchain ledger.
What are the benefits to this platform?
Firstly, it is easy to upload to the platform. It has a solid UI that is convenient to use (no real knowledge of anything crypto-related required) and is not dissimilar to other music platforms. Secondly, as a smaller artists there are opportunities in a community like this one to have substantial fan interactions. You are, in fact, rewarded for doing this. For up and coming musicians this could be a unique space to develop a brand and reputation while also being rewarded for it with AUDIO tokens. Thirdly, the music is very high quality on this platform versus competitors like Soundcloud or even other large streamers. Streaming and downloading is supported at 320kbps. Other crypto based decentralized applications can be built on this platform using music from this application in their own projects. I think this utility as the music platform for decentralized applications holds some value and is not to be underestimated.
What are the downsides to this platform?
I actually think the downsides outweigh the positives all things considered. Currently, there is no per-stream revenue payment options available for the artists. You are only able to earn AUDIO tokens by reaching specific achievement thresholds that seem difficult to reach for smaller artists. The value for AUDIO tokens is obviously fluid given it is a live tradable token so overall rewards on the platform could be lower than expected if you hold on to the token (especially given the tokenomics / inflation aspect of this particular token). There is also, by nature of the product, no copyright protection at all. Eventually in the future there is intended to be some form of community guidance on music that can be taken down on the platform but that isn’t in place yet. Pirated material can be easily uploaded and this could cause extreme copyright headaches for everyone involved. If a particular user uploaded a song from another artist, is there any real way to stop that? It doesn’t appear so. If you are an existing artist, I can’t imagine that you would necessarily leave a larger streaming service to potentially own tokens by reaching specific achievements if your reach would be smaller at this point in time. I also imagine the issues with copyright protections and uploading music would cause some hesitation in getting certain artists that are signed to larger labels onboarded.
Overall, while I do think the idea is interesting and we will see plenty of development in the music side of the crypto-world, I think Audius is a bit of a fundamentally flawed product at the moment. Social interaction is an interesting facet that comes from this product that I think is valuable. I also believe that providing an application that can be built on to provide music to other decentralized apps is very valuable. I do think we’ll see more projects that have rewards based on interactions with musicians or athletes. That being said, the token reward system doesn’t seem enticing enough to me to draw artists in to Audius and there is no established reward system for the artists beyond that. The copyright implications from this application bring up interesting questions about the space as a whole but it seems like a very difficult legal nightmare in the long-term. I’m curious to see how that plays out.