Did The Music NFT Bubble Just Pop?
And where do we go from here...
Music NFTs are having a moment—or should we say were?
In Q4 of 2022, they had been in their own mini-bull run while the rest of the NFT space went dry.
Just take a look at the chart below showing songs minted on a monthly basis across the top 3 Music NFT platforms. December was 🔥 but January isn’t looking so hot…
So, did the music stop (no pun intended), or is this just a blip in the road on the path to mainstream adoption and becoming the next big disruptor of the music industry?
These are the moments when the PRO team likes to take a look under the hood and see what’s happening on-chain! 👀🔛⛓️
Note: PRO members, please check the action steps at the bottom of this report to claim your PRO Pass (NFT). This pass will unlock various web3 perks and discounts for the year. FYI, going forward, we will always give you action steps at the bottom of the reports. Enjoy! 😁
In today's report, we’re diving into what’s going on across the Music NFT sector.
In case you missed it, we talked all about music NFTs a few weeks ago on the podcast with Austin Hurwitz, a leader in the web3 music space as well as the new head of biz dev for Doodles (congrats my man!).
Austin explained the hype going on in Music NFTs right now as well as their potential use cases. So make sure to have a read or take a listen to get up to speed on Music NFTs if you need a refresher.
To set some context here, the numbers in Music NFTs are still small, so it’s hard to say for sure if this is going to change the music industry
But let’s see what trends we can uncover with Music NFTs on-chain 👇
The Music NFT Ecosystem
A nascent ecosystem, but a vibrant one nonetheless.
The adoption of Music NFTs is exciting, especially when it's going against the grain of the rest of the NFT industry.
Before we try to answer the question about what’s going on with the numbers in January, let’s get the lay of the land across the Music NFT ecosystem first.
There are only a few web3 platforms live in the music NFT sector at the moment, such as:
Royal (founded by 3LAU)
Though there are a few smaller ones like Glass and others beginning to pop up on places like Lens Protocol.
You can see from the chart below that this current music NFT bull run is being led predominantly by Sound, which takes the bulk of the market share for new songs minted.
Though, 3LAU’s platform, Royal, also saw some solid adoption in December, especially in terms of bringing in new fans (aka. Music NFT collectors).
If we take a look at the action on secondary sales for these music NFTs however, we can see that Sound has quickly become the dominant marketplace, which was a title once held by OpenSea.
Sound has taken control of more than 85% of the total market share of secondary sales since launching its marketplace in October of 2022. Royal, on the other hand, does not yet have a marketplace, which is why Opensea had control of the market previously.
The Music NFT sector simply had nowhere else to go. 🤷
Keep in mind that we’re talking about a total market volume of < 200 ETH in secondary sales per month, so this is small and still anyone's territory to capture.
Not to mention that the total pie that has plenty of room for growth.
In terms of this current bull run in Music NFTs, it’s clear that Sound has been the main driver. With that in mind, I want to get a bit more granular and zoom into the data at the application level of Sound.
But before we do, let’s take a second and first try to answer the question: WTF is going on with Music NFTs in January? Did the bubble pop?