Detailed Analysis of Gala Music: The Journey of a Decentralized Music Platform

Introduction

Languages may differ across countries, but music can resonate with all listeners through its melodies. Music is a universal language and a shared treasure of humanity. Following Gryhsis’s analysis of the music sector, this report will delve into Gala Music.

2.Project Introduction

2.1 Overview

Gala Music is a decentralized music platform built using blockchain technology, enabling musicians to enhance control over their music and increase industry chain transparency. Fans can connect more closely with artists. Gala Music is a key component of the Gala ecosystem, alongside Gala Games and Gala Movies, forming the foundation of the ecosystem.

2.2 Team Information

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

Leila Steinberg, serving as the CEO of Gala Music, has worked in marketing roles at Atlantic Records, Sony, Def Jam, Tommy Boy, Interscope, and Relativity. She is perhaps better known as the artistic mentor and first manager of the legendary rapper 2PAC, who is a legendary figure not just in the Hip-Hop community but also across the United States and globally, widely regarded as one of the most influential and successful rappers ever.

(legendary rapper Tupac)

2.3 Financing Situation

Similar to Gala Games, Gala Music has not disclosed its financing. Possibly due to regulatory pressures in the United States, Gala Music also employs node sales as a form of indirect financing.

2.4 Operational Logic of Gala Music

The platform involves 4 key roles:

1. Artists:

The core of the Gala Music ecosystem, with 93 artists listed on its website, including Snoop Dogg, who has a deep collaboration with Gala Music. They create and publish music NFTs on the platform, earning revenue through NFT sales and merchandise in the All Access store.

1. NFT Owners:

By purchasing a song NFT, one becomes the owner of the song, or NFT holder. Song owners earn $MUSIC by hosting the NFT on a node.

1. Node Operators:

Purchasing a node on the Gala Music platform makes one 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 uptime and can currently host 10 tracks, with the option to host more tracks by using $MUSIC.

1. Fans

Fans can listen to their favorite artists for free and earn $MUSIC. They can purchase artist merchandise, albums, concert tickets, etc., forming the primary consumer base in the Gala Music ecosystem.

3.MUSIC Token

3.1 Token Utility

$MUSIC is the core token of the Gala Music ecosystem, endowed with significant utility. It is primarily used for purchasing music NFTs, artist merchandise in the All Access store, and nodes. Additionally, it can upgrade hosted tracks and incentivize ecosystem participation.

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 came from test tokens, and an equal amount was minted by the official and allocated for ecosystem operations, partnerships, platform development, its features, and related products.

$MUSIC supply follows a dynamic model controlled by a bonding curve-like mathematical formula, where the creation (minting) of new music is analogous to ecosystem parameters, depending on inputs from ecosystem activities. This design aims to align $MUSIC supply with platform growth and token utility, mitigating over-supply and under-supply issues in a fixed supply plan, ensuring transparency and accurate measurement of demand, growth, and scalability.

The curve below shows the number of Mint incentives generated by minting 100 music tracks, ensuring token supply increases only when token utility does.

$MUSIC is burned through utility actions (e.g., purchases in the All Access store) and other ecosystem-related functions, reducing circulating supply. The reciprocal minting and burning mechanism ensures the ecosystem’s sustainability. Mint incentives are initially distributed from a pool of 150 million $MUSIC, with daily releases of 0.15%, where 50% goes to the project, 35% to Jukebox (nodes), 25% to ecosystem distribution, 25% to music NFT owners, 10% to artists, and 5% to founder nodes.

3.3 Token Holder Analysis

Source: Scopescan

According to Scopescan, the top ten $MUSIC holders account for 56.01% of the total supply, indicating a high concentration of holdings. The second-largest holder is the Huobi exchange wallet, with major exchanges holding about 45% of the total supply.

Source: Nansen

Data from Nansen shows that top holders have been consistently buying $MUSIC over the last 7 and 30 days, with fewer sellers, indicating ongoing accumulation by large holders.

4. Advantage Analysis

4.1 Advantages of Web3 Music Over Traditional Music

This section was detailed in our previous research report on the music industry, and here it is summarized into the following points:

Transparent and Decentralized Copyright Management:

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

Automation through Smart Contracts:

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

Driving the Creator Economy:

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

Closer Creator-Fan Relationships:

Web3 music brings creators closer to their fans and listeners. Fans can interact more closely with creators, offering demands and suggestions, while creators can better understand audience needs, thus creating more popular works.

Innovative Music Service Models:

NFT-based music works offer more than just listening value; they also have tradability and composability. New music service models and scenarios can be derived through online stores, artist merchandise sales, etc., bringing more business 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, creating a better ecosystem for music creators and fans.

4.2 Gala Music Advantages

In the Web3 music sector, also known as MusicFi, projects like Audius have made remarkable performances in the last bull market, with $AUDIO reaching a market cap of up to $5 billion. Now, $MUSIC is the most promising project to lead the next wave of the MusicFi trend. Let’s look at what makes $MUSIC stand out.

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, it’s not impossible for $MUSIC to replicate the trend of $Gala.

Top-Tier Signings:

Snoop Dogg, a long-term partner of Gala Music, also known as “Dogg Father,” is not only a high-profile figure in the hip-hop music scene but also well-known across the US and the world. Having Snoop Dogg as the face of Gala Music can give it a higher market recognition.

Quality Team:

As mentioned earlier, Gala Music’s CEO was 2PAC’s first agent, which can give us an idea of his connections in the hip-hop music scene. This lays a solid foundation for Gala Music to collaborate with more renowned singers in the future.

Newly Issued Token:

$MUSIC is a newly issued token in the Web3 music sector, with a comparatively low market cap of around $13 million. It has not experienced a bull market, unlike $AUDIO, which faces more selling pressure from those who bought at higher prices. We expect $MUSIC to perform better in this bull market.

5. Project Risk Analysis

Despite Gala Music establishing a set of mechanisms to mitigate the issues of oversupply and undersupply within its ecosystem, the core of the platform’s survival and development still relies on the purchasing power of $MUSIC by artists’ fans, i.e., the demand side of the ecosystem. Once the demand significantly decreases, no adjustment of mechanisms can prevent the token price from falling (due to oversupply).

The platform needs to continuously monitor and improve the quality of its music while partnering with more popular Web2 artists to bring their Web2 traffic to Gala Music and enhance the empowerment of $MUSIC. This is crucial to ensure sufficient token demand.

6. Conclusion

Compared to traditional music, Web3 music exhibits multiple advantages, such as transparency, decentralized copyright management, automation through smart contracts, the driving of creator economies, closer relationships between creators and fans, and innovative music service models. These advantages bring a more fair, transparent, automated, and innovative direction to the music industry, enhancing the ecosystem experience for creators and fans.

Gala Music, as a representative of Web3 music, shows clear advantages by backing from Gala Games, signing contracts with top figures like Snoop Dogg, possessing a high-quality team, and issuing new tokens. It is expected to lead the next wave in the Web3 music track, especially through collaborations with renowned artists and the characteristics of newly issued tokens, potentially achieving better performance in a bull market.

However, project risks should also be noted. Although Gala Music has adopted a supply and demand mechanism to alleviate the imbalance in the ecosystem, it still depends on the purchasing power of artist fans towards $MUSIC. If demand falls, the token price may be affected. Therefore, the platform needs to continually improve music quality and sign contracts with popular Web2 artists, bringing their traffic to Gala Music and strengthening the empowerment of $MUSIC to ensure sufficient token demand and maintain the ecological balance of the platform.

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