Exploring Gala Music: The Road to Decentralized Music Platform

Although Gala Music adopts a supply and demand mechanism to alleviate the imbalance in the ecosystem, it still relies on the purchasing power of music by artist fans.

Author: @EdisonHuu

Advisor: @CryptoScott_ETH

1. Introduction

Languages vary across the world, but music, through its melody, can resonate with all listeners. Music is the common language of humanity and a shared wealth. Following the analysis of the music track on Gryhsis in the previous article, this research report will analyze Gala Music.

2. Project Introduction

2.1 Overview

Gala Music is a decentralized music platform built using blockchain technology, enabling music artists to enhance control over their music and increase the transparency of the industry. It also allows fans to have closer contact and connection with music artists.

Gala Music is an important part of the Gala ecosystem, along with Gala Games and Gala Movies, forming the cornerstone of the Gala ecosystem.

2.2 Team Information

The core team of Gala has been introduced in our previous report on Gala.

Leila Steinberg serves as the CEO of Gala Music. She has worked as a marketing executive at Atlantic Records, Sony, Def Jam, Tommy Boy, Interscope, and Relativity. She is also widely known for her role as the artistic mentor and first manager of the legendary American rapper, 2PAC. 2PAC is not only a legend in the hip-hop community but is also widely recognized as one of the most influential and successful rappers in history.

(Legendary rapper Tupac)

2.3 Financing Situation

Similar to Gala Games, Gala Music has not disclosed its financing externally. As mentioned in our Gala Games report, perhaps due to pressure from U.S. regulations, Gala Music also treats node sales as a form of disguised financing.

2.4 Detailed Operation Logic of Gala Music

There are 4 basic roles on the Gala Music platform:

1. Artist

Artists are at the core of the Gala Music ecosystem. Currently, Gala Music has listed 93 artists on its official website, including the rapper Snoop Dogg, who has deep collaboration with Gala Music. They create and release music NFT works on the platform, earning income through the sale of NFTs and selling peripheral products in the All Access store.

2. NFT Owners

By purchasing a song NFT, one becomes the owner of that song, also known as an NFT holder. Song owners need to host the NFT on a node to earn $MUSIC.

3. Node Operators

Purchasing nodes on the Gala Music platform allows one to become a node operator. The current node price is 11,704 $MUSIC, approximately $2,000 based on the current market price of $MUSIC. Nodes require 20 hours of normal operation and can currently host 10 tracks, with the option to increase the number of hosted tracks using $MUSIC.

4. Fans

Fans can listen to their favorite artists' songs for free and earn $MUSIC by listening. They can also purchase artists' peripherals, albums, concert tickets, etc., making them the main consumer group in the Gala Music ecosystem.

3. $MUSIC Token

3.1 Token Utility

$MUSIC is the core token in the Gala Music ecosystem, endowed with powerful utility by the official. $MUSIC is mainly used to purchase music NFTs, buy artist-related peripherals in the All Access store, and node purchases. Additionally, it can be used to upgrade node-hosted tracks and incentivize the ecosystem.

3.2 Token Economic Model

The maximum supply of $MUSIC is 1 billion, with an initial circulation of 150 million. The initial 75 million $MUSIC comes from test tokens, and an equal amount of 75 million $MUSIC tokens are officially minted and given to ecosystem operators for ecosystem partnerships and platform participation activities, including platform development, its functions, and related products.

$MUSIC tokens will follow a dynamic supply controlled by a mathematical formula similar to a bonding curve. The creation (minting) of new music is analogized to ecosystem parameters in this formula, which depends on the input of ecosystem activity parameters.

Its design aims to ensure that the supply of $MUSIC is directly proportional to the platform's growth and the increasing utility of the token, mitigating potential issues of oversupply and undersupply in a fixed supply plan. By tracking the number of music created on the blockchain, it ensures a transparent and genuine measure of demand, growth, and expansion.

The curve in the figure below calculates the amount of minting rewards generated due to the creation of new tracks. This graph shows the $MUSIC rewards generated by minting 100 music tracks, ensuring that token supply increases only when token utility increases.

$MUSIC is burned through token utility (such as purchasing in the All Access store) and other ecosystem-related functions (such as STGE tips), reducing the circulating supply of $MUSIC. Minting rewards obtained from ecosystem activities increase, and this reciprocal minting and burning mechanism ensures the sustainable operation of the ecosystem.

The Minting Rewards Pool is the initial circulation of $MUSIC. 0.15% of the Minting Rewards Pool (150 million tokens) is released daily, with 50% obtained by the project party, and the remaining 50% allocated to Jukebox (nodes) at 35%, ecosystem at 25%, music NFT owners at 25%, artists at 10%, and founder nodes at 5%.

3.3 Token Holding Address Analysis

Source: Scopescan

According to Scopescan data, the top ten $MUSIC holding addresses account for 56.01% (35,385,689 $MUSIC) of the total $MUSIC. The top 50 holding addresses account for 72.88% of the total $MUSIC, and the top 100 holding addresses account for 80.99% of the total $MUSIC, indicating a high degree of concentration. The second holding address is the Huobi exchange address, and holdings of $MUSIC by major exchanges account for approximately 45% of the total supply.

Source: Nansen

According to Nansen data, large holders among the top rankings have been consistently buying $MUSIC in the past 7 days and 30 days, with fewer sellers, indicating that large holders have been continuously accumulating chips.

4. Advantage Analysis

4.1 Advantages of Web3 Music Compared to Traditional Music

This section was detailed in our previous report on the music industry, summarized here as follows:

Transparent and Decentralized Copyright Management:

Blockchain technology enables accurate tracking and management of music copyrights, ensuring that creators receive the income from their creations. This provides greater trust and transparency for music creators.

Automation of Smart Contracts:

The application of smart contracts automates royalty payments, reducing intermediaries and allowing creators to receive their rewards more quickly. This mechanism not only speeds up payment but also improves the efficiency of copyright distribution.

Driving Creator Economy:

Web3 music provides new impetus for the creator economy, emphasizing the independence and creativity of individual creators. Creators achieve economic value through unique content, works, or services, gaining more autonomy and economic opportunities.

Close Connection Between Creators and Fans:

Web3 music fosters closer connections between upstream creators and downstream fans and listeners. Fans can interact more closely with creators, provide feedback and suggestions, and creators can better understand audience needs, creating more popular works.

Innovative Music Service Models:

NFT-based music works not only have "listening value" but also tradability and composability. Through online stores, artist merchandise sales, and other forms, new music service models and scenarios can be derived, bringing more commercial opportunities to the music industry.

Combining these advantages, Web3 music is expected to bring a fairer, more transparent, automated, and innovative direction to the music industry, enhancing the ecosystem experience for creators and fans.

4.2 Advantages of Gala Music

In the Web3 music track, also known as MusicFi, projects such as Audius performed well in the last bull market, with $AUDIO reaching a market value of up to 5 billion USD. Now, $MUSIC is the project most likely to lead the next wave of MusicFi frenzy. Let's take a look at the highlights of $MUSIC.

Backed by Gala:

The success of Gala Games in the last bull market is evident, and we can fully trust the marketing capabilities of the Gala team. As one of the pillars of the Gala ecosystem, $MUSIC replicating the trend of $Gala is not impossible.

Top Signings:

Snoop Dogg is a long-term partner of Gala Music. Snoop Dogg, also known as the Doggfather, is not only highly recognized in the hip-hop music industry but also widely known throughout the United States and the world. Having Snoop Dogg as the face of Gala Music can give it higher market recognition.

High-Quality Team:

As mentioned earlier, the CEO of Gala Music is the first manager of 2PAC. We can imagine her network in the hip-hop music industry, laying a solid foundation for Gala Music to collaborate with more well-known artists in the future.

Newly Issued Tokens:

$MUSIC is a newly issued token in the Web3 music track, with a lower market value of only around 13 million USD compared to other targets in this track. It has not experienced a bull market and does not have as much overhang and selling pressure as $AUDIO. We expect $MUSIC to perform better in this bull market.

5. Project Risk Analysis

Although Gala Music has set up a mechanism to alleviate the imbalance in the ecosystem, it still relies on the purchasing power of $MUSIC by artist fans, which is the demand part of the ecosystem. Once demand sharply decreases, no mechanism can prevent the token price from falling (oversupply).

The platform needs to continuously monitor and improve the quality of music, sign contracts with more popular Web2 artists, bring their traffic to Gala Music, and enhance the utility of $MUSIC to ensure sufficient token demand.

6. Conclusion

Web3 music exhibits advantages such as transparent, decentralized copyright management, automated smart contracts, driving the creator economy, closer connections between creators and fans, and innovative music service models compared to traditional music. This brings a fairer, more transparent, automated, and innovative direction to the music industry, enhancing the ecosystem experience for creators and fans.

As a representative of Web3 music, Gala Music shows clear advantages in being backed by Gala Games, signing top figures like Snoop Dogg, having a high-quality team, and issuing new tokens. It is expected to lead the next wave of frenzy in the Web3 music track, especially through collaborations with well-known artists and the characteristics of newly issued tokens, with the potential for better performance in the bull market.

However, project risks also need to be noted. Although Gala Music has set up a mechanism to alleviate the imbalance in the ecosystem, it still relies on the purchasing power of $MUSIC by artist fans. If demand decreases, the token price may be affected. Therefore, the platform needs to continuously improve music quality, sign contracts with popular Web2 artists, bring their traffic to Gala Music, and enhance the utility of $MUSIC to ensure sufficient token demand and maintain the ecosystem balance.

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