Complete Audius Review And Thier Roadmap To Music Industry Disruption

8 min read

You’ve heard about Audius and its potential to change music streaming for both artists and fans. It’s been compared a lot to Spotify, only a music streaming service that treats the artists fairly.

Here Coin Bureau gives you the complete overview:

Matt Heaphy, guitarist, and vocalist of Trivium, received a royalty check in November 2011. Matt had apparently received payment for the band’s album, which had sold over 20 000 copies in its first week and topped billboards across the United States a few months earlier. Many musicians are familiar with this experience and it is one that has become more common as streaming giants like Spotify have become the main conduit between musicians and fans. 

WHAT IS AUDIUS?

Since its launch, Audius has managed to onboard over 100 000 artists, and 5 million monthly users, and recently integrated with TikTok to cut out all the middlemen in the music industry.

AUDIO has also seen some impressive growth over the last year, which has prompted many to wonder if Audius can become the next Spotify. Let me tell you everything you need to know about Audius, where it came from, how it works, and where it’s going. 

Audius was founded by Roneil Rumburg and Forrest Browning, both are seasoned computer scientists with ivy league degrees under their belts and they’ve been dabbling in crypto since 2011. They went on to start their own VC firms and make early investments into crypto companies like lightning labs, which develops bitcoin’s lightning network.

Both Roneil and Forest were huge fans of electronic music and most of the artists they followed were on SoundCloud. Back in 2014 Soundcloud was all the rage so much so that it signed a licensing deal with Warner music group in November that year as is the case with all monopolistic business practices the crackdown on competition duly began. 

In the months that followed many of Roneil and Forrest’s favorite musicians and tracks were wiped from SoundCloud, including some of their musician friends.  Much of this censorship was justified in the name of loosely defined copyright infringement and other problematic policy changes, that came in the wake of SoundCloud’s deal with Warner. 

Although SoundCloud had no subscription service or royalties model up until that point, the low barrier to entry for musicians and the randomized streaming algorithm for listeners, made it easy for up-and-coming artists to get noticed.  This allowed them to make money by playing live and selling merch at their shows. Touring is actually how most musicians make most of their money even those that are signed to a record label. This is because the number of middlemen involved in music production and distribution means the musicians themselves only get pennies on every dollar for every song that’s sold.

Roneil and Forrest realized that cryptocurrency could offer a solution to these problems but the technology didn’t exist at the time. There was no Ethereum for smart contracts between musicians and fans, nor an operational decentralized storage system to store all the content. By the end of 2017 however, it was clear that the foundations for a decentralized streaming protocol were there.

Ethereum had proven itself to be a functional smart contract cryptocurrency and protocol labs (the company behind IPFS) had just raised a record 257 million bucks with its file coin ICO. In early 2018 Roneil and Forrest got to work building Audius with the goal of giving musicians a censorship-resistant platform and a much bigger piece of the profit pie. In the summer Audius raised 5.5 million dollars from various venture capital firms to expand its operations and supercharge development.

in September 2019 Audius was complete and in October 2020 the audio token began trading on top-tier cryptocurrency exchanges.

HOW DOES AUDIUS WORK?

The Audius protocol consists of three layers:

  • The app layer 
  • The node layer 
  • The blockchain layer 

The app layer includes the audio website and the Audius app for android and apple devices if you’ve ever used either of these you’ll know that it doesn’t feel like you’re using a decentralized application at all. This is primarily because of a special non-custodial browser wallet created by Audius called hedgehog, which is embedded into Audius’s otherwise standard user login process.

Hedgehog works by automatically storing the private key of your wallet in your browser in the background, and it automatically completes any transactions you make without a prompt, unlike other browser wallets. The seed phrase to your browser wallet is sent to you via email when you sign up which is why it instructs you to save that email and not share it with anyone. To the untrained eye this just looks like another important email that speaks volumes to just how user-friendly hedgehog is. 

Obviously keeping your wallet seed phrased in your email is not very safe which is why Audius advises to keep only a small amount of crypto on the wallet at any given time.

FUN FACT

Audius named its wallets hedgehog because of the philosophical contrast it has with the fox,  which is of course Metamask’s logo. Hedgehogs tend to be simple-minded whereas foxes are more nuanced in their thinking, apparently. 

Hedgehog is not fully functional yet and this has to do with the recent changes Audius made to the node layer of its tech stack. The architecture of Audius’s node layer is almost the same as Polygons. Like Polygon, Audius’s node layer is a layer 2 blockchain that is used for improved scaling, i.e speed while remaining compatible with Ethereum.

Audius is in the process of swapping out its own layer 2 blockchain with Solana, something which began earlier this year. In other words, Audius is using Solana as a layer 2 for Ethereum. You may recall Polygons checkpoint nodes submit snapshots of the state of the plasma chain running Polygons smart contracts to Ethereum. This makes it possible for users to recover their tokens from Ethereum using the last snapshot on Ethereum if Polygon ever goes down. Similarly, Audius’s nodes submit snapshots of the state of the Audius protocol to Ethereum, specifically the section of the interplanetary file system or IPFS where Audius’s artists store their music.

This makes it possible for Audius artists to retrieve their music and content from IPFS using the last snapshot on Ethereum. If Audius ever goes down Audius actually uses a custom-made extension to IPFS called ‘ORD SP’ ‘to ensure that music can be quickly stored by musicians and retrieved by artists. 

AUDIUS STAKING

There are two kinds of Audius nodes involved in the storage and retrieval process. Content nodes and Discovery nodes respectively. To ensure that content nodes and discovery nodes do their job they must stake AUDIO tokens on the Ethereum blockchain which is the third layer in Audius’s architecture 

At present content nodes and discovery, nodes must take a minimum of two hundred thousand AUDIO to take on the role and earn fees from the Audius protocol. That’s well over three hundred thousand dollars at today’s prices which makes for a very high barrier to entry.  Now luckily it is possible to delegate AUDIO to content nodes and discovery nodes and this can be done using the Audius protocol dashboard in conjunction with Metamask.

The minimum stake for delegation is 100 AUDIO and the rewards you earn vary on the commission fee set by each node. Note that all AUDIO state is subject to a 7-day cooldown aka unlock period. Audius also does slash misbehaving nodes though this is something that is done manually via community governance, and not via blockchain code. 

AUDIO staking rewards are around 23 per year and this is partially due to audio’s annual inflation which Audius nodes also earn. 

AUDIO TOKENOMICS

AUDIO is an erc20 token on the Ethereum blockchain which began circulating in October last year.  It’s used for staking governance and to unlock rewards on Audius. AUDIO has an initial supply of one billion and just five percent of it was airdropped to Audius’s most active artists and listeners. That said 18 percent of AUDIOS initial supply was allocated to the community treasury, while 40 went to the Audius team and its advisors who include famous musicians, and the remaining 36 percent went to Audius’s investors which later included Binance labs and Coinbase ventures. 

The overwhelming majority of AUDIO supply at any given time is held by the Audius team and its investors. Audius’s annual inflation rate of seven percent will be distributed to the most active users of Audius but for the time being these newly minted AUDIO tokens are going to stakers. 

NEW FEATURES

Audius announced a flurry of new features for its platform, notably AUDIO badges, which give users additional perks for staking various amounts of AUDIO.

TIKTOK AND AUDIUS INTEGRATION

Audius also recently integrated with TikTok making it possible to use music from Audius in TikTok videos. This is the cause of the recent pump which saw Audius double in price overnight. 

THE AUDIUS ROADMAP

Although Audius does not have a concrete road map, recent interviews with its founders shed some light on what’s on the horizon. You’ll hopefully recall that Audius decided to swap out its own permissioned layer 2 blockchain with Solana in October last year. This is because Audius’s reported user base is growing so quickly that it needs an even more scalable solution for its final development hurdle, which is the implementation of stable coin payments.

To put things into perspective Audius has reportedly grown from 500,000 monthly users to over 5 million monthly users in less than a year. This growth is likely to continue and Solana is currently the only cryptocurrency on the market that can support the equally exponential amount of stablecoin transactions coming from Audius’s users. 

For those who don’t know Audius is currently free and all the artists on there are making their money from AUDIO token incentives and stuff like Solana’s recently announced creator fund. When Audius finally introduces monetization this could be insanely bullish for AUDIO.

What’s interesting is that audience co-founder Roneil Rumburg mentioned back in May that Audius will not have a monthly subscription model like other music streaming platforms. Instead, Audius will give artists complete control over how their content is monetized. Roneil noted that one artist is thinking of making his music possible to listen to above a certain altitude meaning you’d only be able to listen to it when traveling on planes or hiking in high mountains

Other possibilities include giving exclusive content to any fans who purchase specific NFT’s like AUDIO badges or even require a one-time payment of a thousand dollars to access all current and future music. The possibilities here are endless and Audius hopes that the competition between different subscription and revenue models between artists, will result in the best ones being developed, not just for Audius but the entire music industry.

This is similar to what we’re seeing now in cryptocurrency when it comes to governance, and Audius is one of the projects involved in this race for the optimal debate space. Audius’s governance dashboard is where you can go to get a sense of any other developments coming down the pipe. So far most of these have been technical. Each of these proposals must be voted on by at least five percent of all staked aAUDIOudio and fifty percent of this five percent must vote in favor for the proposal to pass. 

Once passed funds are taken from the community treasury to pay for the project in question and this can be vetoed by six of nine audience community members who hold keys to the treasury wallet. This all sounds pretty legit but it’s worth pointing out that Audius’s master plan assumes that stable coins don’t get wrecked by regulators, which is a possibility. 

My second concern is there are huge gaps in Audius’s timeline. There were no blog posts made by Audius between September 2018 and May 2019 and again between August 2019 and July 2020. While i’m not sure what happened with the second gap I suspect that the first gap was related to some sort of fallout which has since been scrubbed from Audius’s online presence.

Audius’s final blog post in September 2018 was about the release of its white paper if you go there today you’ll find the same white paper it released in October 2020. However, if you go back in time you find a completely different white paper with different authors this white paper details a completely different architecture for Audius as well as another token called loud, which would serve as the platform’s stable coin. The loud token was actually mentioned in a Coindesk article which came out around that time now there are even bigger questions around Audius’s operations today.  

According to the Audius dashboard it has over 5.3 million active users however all the metrics for Audius’s social media channels app downloads and even the song listens on its platform are a fraction of that number. The dead giveaway  was the airdrop of the AUDIO token which only went to 10000 of Audius’s most active users even though Audius claimed to have over 700000 users at the time, in an interview earlier this year Audius co-founder Roneil Rumburg said that most of the tokens allocated for the airdrop went unclaimed and were consequently allocated to the community treasury.  

In conclusion, while there are some question marks for Audius, the TikTok integration promises to be very exciting.

View the full video on the Coin Bureau Youtube channel

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