Euterpe is an IP-powered copyright NFT platform with an embedded SocialFi ecosystem, adopting the business model of “IP-powered NFT as a Service “. The platform considers copyright as an enterprise in the meta-universe. With music copyright as the entry point, the platform will expand to include videos, games, books, concerts, stars and other broad areas of copyright.

In the traditional art industry, most creators usually release their works with gatekeepers (publishers, record labels, editing houses) which constrains talent. These gatekeepers will sell the IP copyright to big companies to collect copyright fees.

In the whole process, the artist only receives a sliver of the revenue generated, but also has to suffer a long period of waiting time as they are working hard to monetize their IP.

Usually their art is published on the traditional streaming media platforms to and acquire their fans from platforms like YouTube, Instagram, Spotify and Tiktok.

On the Euterpe platform, copyright holders and creators can auction their copyrights worldwide by publishing NFT. Copyright investors can obtain continuous copyright income or immediate realization through participating in the auction, secondary market, and copyright NFT. Fans now have ways to directly support their favorite artists/works, and get platform tokens through playing, promotion, voting and other ways.

In Q1 2022, Euterpe focused on enhancing functionality, stability and security of its products, ensuring a hassle-free environment for copyright auctions, transactions and SocialFi.

In the first quarter of 2022, project progress includes:

(1) In January 2022, Dr.Roland Vogl, Executive Director of Stanford CodeX, joined Euterpe as a consultant;

(2) In February 2022, Euterpe received investment from Huobi Ventures, which will be used for product development and marketing;

(3) In February 2022, Jo Zhu, MBA of Stanford Business School, former Product Manager of Uber and product leader of DoorDash, joined Euterpe as COO. Zeno Zhao, head of product design for Google TV and founder of NextGem Club, joined Euterpe as CPO.

(4) Completed a series of marketing activities and media matrix operations, including the Euterpe artist NFT album with signature gift event, etc.

(5) In March 2022, Euterpe announced the acquisition of investment from HKICEx(Hong Kong International Commodity Exchange), a subsidiary of HKFAEx (Hong Kong Financial Asset Trading group), to jointly develop the Asia-pacific market.

(6) Planned to launch more than 30 professional works of more than 20 stars in the first set of NFT.

The target business of Euterpe covers a wide range of sectors, including but not limited to ditigal assets such as music, art, literature, images and video. However, the core pain points of each segment are similar: the traditional copyright industry generates a lot of redundant transaction costs; The true creator does not receive the upside ; The fan base of the creator also does not get its due distribution of revenue. As the current business focus and the first entry point of Euterpe is the music copyright field, the following part will focus on the business analysis of the music copyright sector.

➢Traditional complex copyright licensing structures generate large redundant transaction costs and reduce creator incentives

In the traditional music industry, the “music” part is usually completed by the songwriter and the “recording” part is completed by the recording artist. A piece of music is usually created by several authors together, and they also jointly own the copyright of the work. In effect, original songwriters and recording artists give all or part of their copyright to record labels/publishers in exchange for promotion of their music and prepayments for their future creation. When music works are copied by record labels/publishers, performed in public or distributed online, various degrees of licensing are required under copyright law. As a result, traditional copyright licensing structures are messy and complex.

➢Decimation of marginal revenue for creators as music streaming companies crush the marketspace of traditional record download companies

The mainstream means of content transmission include streaming media transmission and download. In recent years, streaming media services have surged in comparison with download services, and their success is due to the fact that the method of streaming media transmission has greatly reduced the public’s royalty. In equivalent to the fee of downloading one album, users can watch 2,494 streams on Spotify and 13,379 on YouTube.

➢The benefits of the traditional music industry are not flowing to the fan base that really drives the industry

In the fan economy of the traditional music industry, the flow direction of income is one-way, and the copyright owner obtains the business income brought by the fan group through various ways. However, this kind of flow completely ignores the value of the traffic, valuable attention, storage space, computer processing power and so on. The supporting behavior of the fans does not get the due reward.

Through the music perspective, Euterpe will gradually build a complete set of solutions for most of the copyright industry segments. As can be seen from the current music copyright business logic diagram, EUT forms a series of gameplay and economic systems based on the circulation of music copyright works in this segmentation field.

Content consumers can participate in crowdfunding, secondary market, three Socialfi mining options, and other possible future community activities.

Content consumers are eligible to participate in the auction for the first release of new songs. Content consumers who own part of the copyright will reap profits every time their works are consumed in the future. Meanwhile, content consumers who have crowdfunded their share of ownership of any work are free to transfer that share in the secondary market.

• Playing as mining

Users can choose to participate in the playing-and-mining mechanism. At the same time that play works, they can get certain token rewards according to their own play market.

• Sharing as mining

Users who have downloaded a copy of the work can get a special link from the EUT community for that user, either on the EUT community or on other media platforms such as Twitter, Facebook or Telegram. If other users download or watch streaming content through this link, that user will be rewarded with tokens.

• Voting as mining

The EUT community publishes a series of weekly leaderboards that aggregate the most valuable titles in different genres, such as the Top 100, while introducing three evaluation dimensions to determine the final leaderboard ranking.

The first factor is the total value of streams and downloads in a week, which accounts for 35%.

Second, a user may vote for or against any work with regard to any weekly chart in which it may potentially appear. Each vote is weighted by the EUT tokens that the voter has spent to back her vote. The total weighted value of both positive and negative votes accounts for 35% of the ranking score. We may disregard the top 1% of positive and negative votes to minimize the risks of voting manipulation.

All the works are ranked in the weekly charts according to their ranking scores. If a work has moved upwards in a chart, the BCE tokens from the positive voters would not change hands, and the BCE tokens from the negative voters would be divided between the relevant artists (35%), the positive voters (35%), and the positive critics (30%). Similarly, if a work has moved downwards, the BCE tokens from the negative voters would not change hands, and the BCE tokens from the positive voters would be divided between the relevant artists (35%), the negative voters (35%), and the negative critics (30%). If a work has stayed put, the tiebreaker would be the change in the total value of streams and downloads, then the change in the total value of critic votes.

Third, a qualified artist may opt to vote for or against any work as a critic, rather than as a user. A critic vote would not cost any EUT tokens and therefore would not be weighted. The total value of positive and negative critic votes accounts for 30% of the rankings score in all the relevant charts.

Publishers such as artists or record companies will publish their works to the EUT community to initiate crowdfunding, and release NFT to obtain financial support for early creation while transferring part of their copyrights to fans who invested in the early stage. Publishers cannot crowdfund their work if it is not first published in the community.

Artists who are granted the right to participate in the evaluation by the community can participate in the evaluation of the list of works and influence the ranking of works. The evaluation does not cost EUT token, that is, each artist has the same weight of evaluation. If the music goes up in the rankings, the artist will get tokens from negative voters(30%), and vice versa.

If the voting system changes the ranking of a piece of music, the artist associated with that piece will receive passive cash flow income. Rising ranks earn EUT tokens from negative voters (35%), and vice versa.

Artists earn royalties of $0.01/stream and $1/download based on copyright percentages. EUT Ecology adopts a unified pricing strategy. After each stream of information is consumed, apart from Gas fee, users need to pay $0.01 worth of coupons/EUT tokens issued by EUT community (see the token application section), and a constant $0.01 income will flow to the copyright owner. Similarly, every time a work is downloaded, a constant $1 goes to the copyright owner.

Euterpe will revolutionize the copyright industry in many aspects and fields. However, at present, EUT ecology will revolutionize the music copyright industry in three aspects.

➢EUT Reinvigorated fan economy through traffic realization and crowdfunding

The EUT ecosystem reshapes the traditional fan economy of one-way income flow from fans to copyright owners, which makes the income incentives between artists and fans completely consistent. The higher the degree of fans’ support for artists, the greater the commercial value of artists themselves and their works will be, and the more fans can get real economic benefits from their traffic support for artists. In addition, the crowdfunding mode allows fans to directly screen the early works of artists in the market and bear corresponding investment risks, avoiding the investment risks of publishers caused by consumer preference fluctuations in the traditional music industry.

➢ Reducing transaction costs and unleashing market vitality

EUT Ecosystem expands the value of royalties by restoring the market value of streaming content and minimizing the transaction costs involved in copyright licensing. If artists take 100% ownership, EUT rewards artists three times as much royalty per stream as Spotify and 17 times as much as YouTube. In addition, Euterpe enhances the revenue generated by work downloads through quantified charges.

The EUT ecosystem greatly eliminates the cost that an artist must bear in the traditional industry by using blockchain technology with intelligent contracts on thousands of copyright rules, the license agreement and flow of coding. In other words, it allows artists to have 100% ownership. Traditionally deducting the transaction costs of the financing, marketing and licensing, the artists can only receive a 14.73% ownership.

➢ EUT ecological Optimization of copyright enforcement

First, the smart contract guarantees the copyright priority of the EUT community’s published works. Secondly, the approval mechanism of EUT simplifies the procedures of obtaining copyright licenses involved in the process of secondary creation. Third, EUT reinvents notification and removal procedures to resolve copyright disputes in a cost-effective manner; Fourth, EUT automatically searches and detects online infringement through blockchain-based search engines and bounty systems. Fifth, EUT Ecology solves the problem of piracy by providing economic incentives in the form of mining, crowdfunding, coupons and other community activities to stimulate users to consume and distribute legitimate content.

MediaMatrix

At present, Euterpe has established its own media matrix. In terms of traditional media, Euterpe has received extensive attention from top media in the blockchain industry in China and abroad, such as the Wall Street Journal, Financial Times of South China Morning Post, Cointelegraph, Coindesk, Golden Finance, Block Pulse, PAnews, Planet Blockchain, Wu Said Blockchain, etc. Among them, Golden Finance reported the relevant information of the project in the way of “quick news + column”, strengthened Euterpe’s “original copyright” and “NFT” attributes, and opened up its popularity. So far, a number of relevant publicity articles have reached more than 70,000 views.

In addition, by creating a comprehensive news media matrix including Twitter, Discord, Telegram, Medium, Mirror, etc., the linkage mode is formed to deepen the understanding and attention of fans/investors on the project. Currently, Euterpe’s Telegram community has reached 196,000 members, increasing project influence through interaction and group activity.

Partners

Euterpe’s strategic partners mainly include some famous investment institutions, law schools and service institutions. The widespread strategic partners are all highly relevant to the project business, which is beneficial to Euterpe’s global business development.

Strategic partners include Hong Kong Financial Asset Exchange (HKFAEx), Blockchain Valley Ventures, Starwin Group and other investment institutions. Other legal practice partners include Stanford’s CIS Institute, CODEX and Gunderson Dettmer.

The core team consists of 8 people. The core members all have senior qualifications in fields directly related to Euterpe, such as law, music, software development and blockchain. Most of the core members of the team have doctoral degrees, and the three co-founders all graduated from Stanford University.

On the whole, the team has strong legal research ability, good blockchain development ability, familiarity with the traditional music industry, and certain product operation and marketing ability.

On March 11, 2022, Euterpe announced the investment of HKICEx (Hong Kong International Commodity Exchange). HKICEx is a subsidiary of HKFAEx (Hong Kong Financial Asset Trading Group). At present, the two sides have reached a strategic partnership and will jointly develop the Asia-Pacific market.

On February 14, 2022, Euterpe announced an investment from Huobi Ventures. According to Euterpe, the funding will be used to develop a new, rule-breaking NFT market that not only provides users with a high level of fraud-free content, but also provides strong protection for creators’ IP.

On November 16, 2021, Euterpe announced the closing of a $3.6 million seed round. The round was led by Fenbushi Capital

Other institutional investors include LD Capital, Brightway Future Capital, UpHonest Capital, Titan Capital and other institutions. The money will be used for product development and marketing.

EUT is an ERC-20 token based on the Ethereum network, with an initial issuance total of 21 billion. The token allocation plan, lock-up plan and token release plan are as follows:

Most of the tokens flow to the community, accounting for 66.5%. If the tokens are issued according to the official release, the project is expected to have a good liquidity performance. The project reserves a reasonable 16% incentive for the team, with 3% for private investors. Initial offering of tokens is a six-month lockup period followed by 12 months of linear unlock; Tokens held by the team are also unlocked linearly for 30 months after a 6 month lockup period; The token distribution generated by mining is 50% tokens with no lockup period, which is an incentive for increased community and user engagement.

Currently, EUT tokens are mainly used in three directions in the music copyright business, but with the progress of the project team, tokens will be applied to more specific scenarios of the copyright industry, so as to capture higher value for tokens.

The first use of EUT tokens is to reward copyright holders. Copyright owners usually fall into two categories: artists and crowdfunded fan groups. When a content consumer downloads a copyright owner’s work or consumes a copyright owner’s streaming work, the copyright owner will receive $1/download and $0.01/stream.

The second use of EUT tokens is to reward content consumers, who can earn traffic benefits through Playing Mining, Sharing mining and Voting mining. See the business Logic section for details.

The consumption scenarios of EUT tokens include participating in community activities, such as Voting mining activities, where certain tokens are consumed to add weight to one’s choice; Artists need to consume tokens when uploading works, and users need to consume tokens when consuming music works.

The track Euterpe belongs to is NFT track. According to the music copyright field that Euterpe first entered into, it’s more direct competitors belong to NFT track, but with the expansion of the team’s business map, there will be competitors in the segmentation field of copyright industry.

NFT Track

The full name of NFT is non-fungible token, which is characterized by the unique nature of each NFT, that is, different NFT is different and can be verified. NFT tracks can be subdivided into collectibles NFT, art NFT, game NFT, metasomes NFT, land NFT, music NFT, and so on.

According to the data of Nonfungible.com, the current NFT active player address of the whole platform has stabilized over 3 million, with an annual growth rate of over 250%. According to the data of NFTGO, the daily active player address of the whole platform has also exceeded 50,000. The number of NFT transactions on the whole platform steadily exceeded 30 million, with an annual growth rate of over 700%. The deals totaled nearly $23 billion. Compared with the number of global accounts opened, the current active NFT addresses on the whole platform are insignificant, which shows that the future space of the NFT industry is broad.

Music NFT Track

A music NFT is a certificate of ownership of a unique audio or musical work that can be bought or sold. According to the International Federation of the Phonographic Industry (IFPI), the total revenue of the global recorded music market in 2020 was 21.6 billion US dollars, achieving six consecutive years of growth. According to MIDiA Research, the total number of music streaming subscribers reached 520 million in Q2 2021, up 26.4% from the same period last year. At the same time, the dominance of the music industry is shifting from the record companies that hold the copyrights to online platforms. Therefore, these big trends in the music industry have created a good breeding ground for the exponential growth of the music NFT track.

At present, according to NFTGO data, the liquidity of music NFT in one week accounts for 18.6% in the recent period (March 2022), which is similar to the liquidity of art NFT and practical NFT. It is worth noting that there are overlapping parts among various categories. However, regardless of the statistical dimension of transaction volume or transaction volume, and regardless of the statistical period of long or short period, the market share of music NFT ranks at the bottom of the whole NFT industry, far less than 1%.

In the short term, music NFT may not be able to fully solve the problem of artist income and the tokenization of fan traffic value. The track also needs a larger user base, the popularization of Web 3 concept and the maturity of technology. But the point of the track is to provide a better value distribution solution for artists and fan groups, avoiding layers of middlemen and preparing for structural changes in the music industry.

➢ Rarible

Rarible was founded in 2020 by Alexander Salnikov and Alexei Falin, with the main team members based in Moscow. Rarible was the first NFT trading platform to issue platform tokens, RARI, allowing users to participate in decision-making. Works published on Rarible can be seen on OpenSea, giving the work more exposure. Rarible currently has $274 million in transactions.

➢ Nifty Gateway

Nifty Gateway is an NFT trading platform, which was acquired by Gemini in 2019 and successfully introduced Pak, Beeple and other well-known artists. The Nifty Gateway has high requirements for creators, who must submit an application with a video introduction and an explanation of medium and long term goals. NFT will charge a 5% sales fee for both the first and second sales. The platform offers a variety of auctions, with each auction carefully planned and even with a different theme. The Nifty Gateway team has a strong network of celebrities and publishers including Steve Aoki, PlayBoy, Sotheby’s and others who publish NFT works, and auctions often generate buzz. The Nifty Gateway allows fiat to buy NFT transactions in addition to cryptocurrency transactions, and distributes the proceeds of the sale directly to bank accounts, but is currently only available to US users.

➢ Foundation

Foundation is an NFT trading platform that uses community-led and time-limited auctions to generate works that are also published on OpenSea. Each time the original 50 artists invited to the platform successfully sold an original work, they were given two slots to invite new artists to the platform, and so on. If an artist buys or sells invitation codes in bad faith, he or she will be deprived of permanent residency. There is also Community Upvote, which means that all members of the Twitter-verified Community can get 5 votes to support the 5 artists that can be registered, and the top 50 can join the trading platform to create an NFT. On the transaction side, Foundation’s artist users set a reserve price for NFT works, and after the first bid, the works are automatically auctioned in a 24-hour limited time. At present, the transaction volume of Foundation has exceeded 50,000 ETH and more than 300,000 Twitter followers.

➢ Audius Project

Founded in 2018, Audius is a decentralized music streaming agreement that aims to bring music creators and fans closer together. According to the information on the official website, the pledge amount of governance token $AUDIO currently reaches 294M, with an average annual pledge yield of 24% and monthly active users of 6.01 million. Audius’s token economy consists of three tokens: the governance token $AUDIO, the stablecoin, and the artist’s personal token. Content uploaded by artists is stored in AudSP, a separate network built by Audius on IPFS. Artists need to pledge $AUDIO in order to issue individual artist tokens, which can be issued for additional help from the platform, and fans need to purchase the tokens in order to watch the limited content of idols.

➢ Opulous

Opulous is the financing, lending and trading platform for music copyright NFT, offering buyers the opportunity to purchase a share of music rights that generate monthly royalties and grow in value over the course of an artist’s career. NFT owners can withdraw these revenues from their Opulous accounts and trade them on the Opulous NFT exchange.

1. At present, the mainstream NFT trading market is mainly based on the C2C model, while Euterpe is positioned as a B2C business model. The market entry threshold of the B2C model is higher, and the future valuation potential is broader.

2. At present, the mainstream NFT trading market is dominated by UGC with uneven quality. Euterpe focuses on professional and the most popular works instead of UGC. The reason for this is that the copyright industry itself is a head economy, and UGC itself brings limited traffic and value. Using top-quality works as an entry point can help Euterpe achieve a significant amount of traffic in a short period of time and attract mainstream players to the NFT market.

3. At present, NFT products in the mainstream NFT market are mainly copies of works rather than copyrights. In the case that NFT does not tokenize the copyright itself, the investors of NFT can only cash out by buying low and selling high, but cannot obtain the income from the commercial operation of the copyright itself and the continuous royalty income. Euterpe focuses on copyright NFT and tokenizes the copyright so that investors can obtain the copyright operating income and continuous royalty income by holding the copyright of the works behind NFT. There are only a few other projects that are trying to combine copyright with NFT, but none of them currently have a workable specialization to implement this model. At present, there is only simple, shallow work income sharing mode on the market. This is because copyright operation and trading itself has a very high professional and legal threshold. This is the superior resource of the Euterpe team.

4. At present, due to the lack of copyright protection and legal compliance resources, the mainstream NFT trading market is full of copyright infringement, fraud and violation risks, which bring huge risks to copyright owners, investors and the NFT market itself. As Euterpe has certain competitive advantages in this respect, the team has the strength to build an effective copyright protection mechanism to avoid copyright infringement and establish a compliance route to realize the compliance operation of the platform, so as to protect the interests of copyright holders and investors.

5. Euterpe focuses on SocialFi and reserves 66.5% of its tokens for the community to encourage greater participation in the ecosystem and share in the benefits of platform and product growth.

Industry Risk

At present, music NFT track of participants is relatively small, with relatively limited user groups. Most of the related project participants are speculative, especially in the situation that mining play has no lock period. Speculators may spend less time on the EUT community construction, thus worsening other users’ engaged experience, causing the user retention rates to be low.

Technical Risk

The EUT Ecosystem project has a grand vision. It not only plans to build EUT ecology on Ethereum and multiple L2 chains, but also hopes to open up the Wechat moments and other Web 2 ecology. This tests the technical ability of the team.

Euterpe is a copyright NFT platform powered by IP and embedded in the SocialFi ecosystem. The advantages of the project mainly include strong financing and strategic partners, precise target on market pain points, and the strength and qualification of the team to implement practical solutions. However, the project products have not been publicly issued, nor has the token sale been carried out, and all aspects of the project still need to wait for the market test.

Project financing and the expansion of strategic partners are the guarantee for the follow-up implementation of the project. The project has received three rounds of financing, the seed round of $3.6 million led by Fenbushi capital, the second round of financing from Huobi, and the third round of financing from HKICEx. In addition, Euterpe’s strategic partners mainly include some famous investment institutions, law schools and service institutions. The strategic partners are highly related to the project business, and the partners are distributed all over the world, which is conducive to the extensive layout of the business.

The project really hits a long-standing pain point in the copyright market and provides a solution. In the field of music copyright, Euterpe is changing the way of value distribution by restoring the market value of the streaming media content and download music works, minimizing the copyright licensing transaction costs involved to expand the royalty income of artists. Realizing traffic profit through three ways of mining, and designing the way of crowdfunding to reshape fans economy.

In addition, the team has certain strength and qualification to implement practical solutions. The core team has an exceptional educational background, most of which are PhD students from Stanford University. The team has certain legal research capabilities and blockchain development capabilities. It is familiar with the traditional copyright industry, and has certain product operation and marketing capabilities.

However, Euterpe is still in the early stage of the project. Alpha version of the product has been completed, but the public version has not been launched yet. The playability of the product still needs to be tested by the market and users. At the same time, Euterpe also needs to be tested by the market for the reliability of the product technology and mechanism, and the interaction between the product and the user should be smooth. In terms of mechanism, because some benefits of mining play have no lock period, EUT needs to resist the potential “mining and selling” speculation in the market. Euterpe has no token sales and therefore no market data, and it will take time to verify whether users can pay for EUT’s solution.

Overall, the project has good prospects, but we still need to wait for the market to test whether Euterpe’s project plan can be valid.

https://eut.io/

https://digitalcommons.law.buffalo.edu/buffalolawreview/vol69/iss4/2/

https://www.jinse.com/lives/276302.html

https://www.jinse.com/lives/277845.html

https://www.jinse.com/lives/281202.html

Author：Zoe Song

Euterpe is an IP-powered copyright NFT platform with an embedded SocialFi ecosystem, adopting the business model of “IP-powered NFT as a Service “. The platform considers copyright as an enterprise in the meta-universe. With music copyright as the entry point, the platform will expand to include videos, games, books, concerts, stars and other broad areas of copyright.

In the traditional art industry, most creators usually release their works with gatekeepers (publishers, record labels, editing houses) which constrains talent. These gatekeepers will sell the IP copyright to big companies to collect copyright fees.

In the whole process, the artist only receives a sliver of the revenue generated, but also has to suffer a long period of waiting time as they are working hard to monetize their IP.

Usually their art is published on the traditional streaming media platforms to and acquire their fans from platforms like YouTube, Instagram, Spotify and Tiktok.

On the Euterpe platform, copyright holders and creators can auction their copyrights worldwide by publishing NFT. Copyright investors can obtain continuous copyright income or immediate realization through participating in the auction, secondary market, and copyright NFT. Fans now have ways to directly support their favorite artists/works, and get platform tokens through playing, promotion, voting and other ways.

In Q1 2022, Euterpe focused on enhancing functionality, stability and security of its products, ensuring a hassle-free environment for copyright auctions, transactions and SocialFi.

In the first quarter of 2022, project progress includes:

(1) In January 2022, Dr.Roland Vogl, Executive Director of Stanford CodeX, joined Euterpe as a consultant;

(2) In February 2022, Euterpe received investment from Huobi Ventures, which will be used for product development and marketing;

(3) In February 2022, Jo Zhu, MBA of Stanford Business School, former Product Manager of Uber and product leader of DoorDash, joined Euterpe as COO. Zeno Zhao, head of product design for Google TV and founder of NextGem Club, joined Euterpe as CPO.

(4) Completed a series of marketing activities and media matrix operations, including the Euterpe artist NFT album with signature gift event, etc.

(5) In March 2022, Euterpe announced the acquisition of investment from HKICEx(Hong Kong International Commodity Exchange), a subsidiary of HKFAEx (Hong Kong Financial Asset Trading group), to jointly develop the Asia-pacific market.

(6) Planned to launch more than 30 professional works of more than 20 stars in the first set of NFT.

The target business of Euterpe covers a wide range of sectors, including but not limited to ditigal assets such as music, art, literature, images and video. However, the core pain points of each segment are similar: the traditional copyright industry generates a lot of redundant transaction costs; The true creator does not receive the upside ; The fan base of the creator also does not get its due distribution of revenue. As the current business focus and the first entry point of Euterpe is the music copyright field, the following part will focus on the business analysis of the music copyright sector.

➢Traditional complex copyright licensing structures generate large redundant transaction costs and reduce creator incentives

In the traditional music industry, the “music” part is usually completed by the songwriter and the “recording” part is completed by the recording artist. A piece of music is usually created by several authors together, and they also jointly own the copyright of the work. In effect, original songwriters and recording artists give all or part of their copyright to record labels/publishers in exchange for promotion of their music and prepayments for their future creation. When music works are copied by record labels/publishers, performed in public or distributed online, various degrees of licensing are required under copyright law. As a result, traditional copyright licensing structures are messy and complex.

➢Decimation of marginal revenue for creators as music streaming companies crush the marketspace of traditional record download companies

The mainstream means of content transmission include streaming media transmission and download. In recent years, streaming media services have surged in comparison with download services, and their success is due to the fact that the method of streaming media transmission has greatly reduced the public’s royalty. In equivalent to the fee of downloading one album, users can watch 2,494 streams on Spotify and 13,379 on YouTube.

➢The benefits of the traditional music industry are not flowing to the fan base that really drives the industry

In the fan economy of the traditional music industry, the flow direction of income is one-way, and the copyright owner obtains the business income brought by the fan group through various ways. However, this kind of flow completely ignores the value of the traffic, valuable attention, storage space, computer processing power and so on. The supporting behavior of the fans does not get the due reward.

Through the music perspective, Euterpe will gradually build a complete set of solutions for most of the copyright industry segments. As can be seen from the current music copyright business logic diagram, EUT forms a series of gameplay and economic systems based on the circulation of music copyright works in this segmentation field.

Content consumers can participate in crowdfunding, secondary market, three Socialfi mining options, and other possible future community activities.

Content consumers are eligible to participate in the auction for the first release of new songs. Content consumers who own part of the copyright will reap profits every time their works are consumed in the future. Meanwhile, content consumers who have crowdfunded their share of ownership of any work are free to transfer that share in the secondary market.

• Playing as mining

Users can choose to participate in the playing-and-mining mechanism. At the same time that play works, they can get certain token rewards according to their own play market.

• Sharing as mining

Users who have downloaded a copy of the work can get a special link from the EUT community for that user, either on the EUT community or on other media platforms such as Twitter, Facebook or Telegram. If other users download or watch streaming content through this link, that user will be rewarded with tokens.

• Voting as mining

The EUT community publishes a series of weekly leaderboards that aggregate the most valuable titles in different genres, such as the Top 100, while introducing three evaluation dimensions to determine the final leaderboard ranking.

The first factor is the total value of streams and downloads in a week, which accounts for 35%.

Second, a user may vote for or against any work with regard to any weekly chart in which it may potentially appear. Each vote is weighted by the EUT tokens that the voter has spent to back her vote. The total weighted value of both positive and negative votes accounts for 35% of the ranking score. We may disregard the top 1% of positive and negative votes to minimize the risks of voting manipulation.

All the works are ranked in the weekly charts according to their ranking scores. If a work has moved upwards in a chart, the BCE tokens from the positive voters would not change hands, and the BCE tokens from the negative voters would be divided between the relevant artists (35%), the positive voters (35%), and the positive critics (30%). Similarly, if a work has moved downwards, the BCE tokens from the negative voters would not change hands, and the BCE tokens from the positive voters would be divided between the relevant artists (35%), the negative voters (35%), and the negative critics (30%). If a work has stayed put, the tiebreaker would be the change in the total value of streams and downloads, then the change in the total value of critic votes.

Third, a qualified artist may opt to vote for or against any work as a critic, rather than as a user. A critic vote would not cost any EUT tokens and therefore would not be weighted. The total value of positive and negative critic votes accounts for 30% of the rankings score in all the relevant charts.

Publishers such as artists or record companies will publish their works to the EUT community to initiate crowdfunding, and release NFT to obtain financial support for early creation while transferring part of their copyrights to fans who invested in the early stage. Publishers cannot crowdfund their work if it is not first published in the community.

Artists who are granted the right to participate in the evaluation by the community can participate in the evaluation of the list of works and influence the ranking of works. The evaluation does not cost EUT token, that is, each artist has the same weight of evaluation. If the music goes up in the rankings, the artist will get tokens from negative voters(30%), and vice versa.

If the voting system changes the ranking of a piece of music, the artist associated with that piece will receive passive cash flow income. Rising ranks earn EUT tokens from negative voters (35%), and vice versa.

Artists earn royalties of $0.01/stream and $1/download based on copyright percentages. EUT Ecology adopts a unified pricing strategy. After each stream of information is consumed, apart from Gas fee, users need to pay $0.01 worth of coupons/EUT tokens issued by EUT community (see the token application section), and a constant $0.01 income will flow to the copyright owner. Similarly, every time a work is downloaded, a constant $1 goes to the copyright owner.

Euterpe will revolutionize the copyright industry in many aspects and fields. However, at present, EUT ecology will revolutionize the music copyright industry in three aspects.

➢EUT Reinvigorated fan economy through traffic realization and crowdfunding

The EUT ecosystem reshapes the traditional fan economy of one-way income flow from fans to copyright owners, which makes the income incentives between artists and fans completely consistent. The higher the degree of fans’ support for artists, the greater the commercial value of artists themselves and their works will be, and the more fans can get real economic benefits from their traffic support for artists. In addition, the crowdfunding mode allows fans to directly screen the early works of artists in the market and bear corresponding investment risks, avoiding the investment risks of publishers caused by consumer preference fluctuations in the traditional music industry.

➢ Reducing transaction costs and unleashing market vitality

EUT Ecosystem expands the value of royalties by restoring the market value of streaming content and minimizing the transaction costs involved in copyright licensing. If artists take 100% ownership, EUT rewards artists three times as much royalty per stream as Spotify and 17 times as much as YouTube. In addition, Euterpe enhances the revenue generated by work downloads through quantified charges.

The EUT ecosystem greatly eliminates the cost that an artist must bear in the traditional industry by using blockchain technology with intelligent contracts on thousands of copyright rules, the license agreement and flow of coding. In other words, it allows artists to have 100% ownership. Traditionally deducting the transaction costs of the financing, marketing and licensing, the artists can only receive a 14.73% ownership.

➢ EUT ecological Optimization of copyright enforcement

First, the smart contract guarantees the copyright priority of the EUT community’s published works. Secondly, the approval mechanism of EUT simplifies the procedures of obtaining copyright licenses involved in the process of secondary creation. Third, EUT reinvents notification and removal procedures to resolve copyright disputes in a cost-effective manner; Fourth, EUT automatically searches and detects online infringement through blockchain-based search engines and bounty systems. Fifth, EUT Ecology solves the problem of piracy by providing economic incentives in the form of mining, crowdfunding, coupons and other community activities to stimulate users to consume and distribute legitimate content.

MediaMatrix

At present, Euterpe has established its own media matrix. In terms of traditional media, Euterpe has received extensive attention from top media in the blockchain industry in China and abroad, such as the Wall Street Journal, Financial Times of South China Morning Post, Cointelegraph, Coindesk, Golden Finance, Block Pulse, PAnews, Planet Blockchain, Wu Said Blockchain, etc. Among them, Golden Finance reported the relevant information of the project in the way of “quick news + column”, strengthened Euterpe’s “original copyright” and “NFT” attributes, and opened up its popularity. So far, a number of relevant publicity articles have reached more than 70,000 views.

In addition, by creating a comprehensive news media matrix including Twitter, Discord, Telegram, Medium, Mirror, etc., the linkage mode is formed to deepen the understanding and attention of fans/investors on the project. Currently, Euterpe’s Telegram community has reached 196,000 members, increasing project influence through interaction and group activity.

Partners

Euterpe’s strategic partners mainly include some famous investment institutions, law schools and service institutions. The widespread strategic partners are all highly relevant to the project business, which is beneficial to Euterpe’s global business development.

Strategic partners include Hong Kong Financial Asset Exchange (HKFAEx), Blockchain Valley Ventures, Starwin Group and other investment institutions. Other legal practice partners include Stanford’s CIS Institute, CODEX and Gunderson Dettmer.

The core team consists of 8 people. The core members all have senior qualifications in fields directly related to Euterpe, such as law, music, software development and blockchain. Most of the core members of the team have doctoral degrees, and the three co-founders all graduated from Stanford University.

On the whole, the team has strong legal research ability, good blockchain development ability, familiarity with the traditional music industry, and certain product operation and marketing ability.

On March 11, 2022, Euterpe announced the investment of HKICEx (Hong Kong International Commodity Exchange). HKICEx is a subsidiary of HKFAEx (Hong Kong Financial Asset Trading Group). At present, the two sides have reached a strategic partnership and will jointly develop the Asia-Pacific market.

On February 14, 2022, Euterpe announced an investment from Huobi Ventures. According to Euterpe, the funding will be used to develop a new, rule-breaking NFT market that not only provides users with a high level of fraud-free content, but also provides strong protection for creators’ IP.

On November 16, 2021, Euterpe announced the closing of a $3.6 million seed round. The round was led by Fenbushi Capital

Other institutional investors include LD Capital, Brightway Future Capital, UpHonest Capital, Titan Capital and other institutions. The money will be used for product development and marketing.

EUT is an ERC-20 token based on the Ethereum network, with an initial issuance total of 21 billion. The token allocation plan, lock-up plan and token release plan are as follows:

Most of the tokens flow to the community, accounting for 66.5%. If the tokens are issued according to the official release, the project is expected to have a good liquidity performance. The project reserves a reasonable 16% incentive for the team, with 3% for private investors. Initial offering of tokens is a six-month lockup period followed by 12 months of linear unlock; Tokens held by the team are also unlocked linearly for 30 months after a 6 month lockup period; The token distribution generated by mining is 50% tokens with no lockup period, which is an incentive for increased community and user engagement.

Currently, EUT tokens are mainly used in three directions in the music copyright business, but with the progress of the project team, tokens will be applied to more specific scenarios of the copyright industry, so as to capture higher value for tokens.

The first use of EUT tokens is to reward copyright holders. Copyright owners usually fall into two categories: artists and crowdfunded fan groups. When a content consumer downloads a copyright owner’s work or consumes a copyright owner’s streaming work, the copyright owner will receive $1/download and $0.01/stream.

The second use of EUT tokens is to reward content consumers, who can earn traffic benefits through Playing Mining, Sharing mining and Voting mining. See the business Logic section for details.

The consumption scenarios of EUT tokens include participating in community activities, such as Voting mining activities, where certain tokens are consumed to add weight to one’s choice; Artists need to consume tokens when uploading works, and users need to consume tokens when consuming music works.

The track Euterpe belongs to is NFT track. According to the music copyright field that Euterpe first entered into, it’s more direct competitors belong to NFT track, but with the expansion of the team’s business map, there will be competitors in the segmentation field of copyright industry.

NFT Track

The full name of NFT is non-fungible token, which is characterized by the unique nature of each NFT, that is, different NFT is different and can be verified. NFT tracks can be subdivided into collectibles NFT, art NFT, game NFT, metasomes NFT, land NFT, music NFT, and so on.

According to the data of Nonfungible.com, the current NFT active player address of the whole platform has stabilized over 3 million, with an annual growth rate of over 250%. According to the data of NFTGO, the daily active player address of the whole platform has also exceeded 50,000. The number of NFT transactions on the whole platform steadily exceeded 30 million, with an annual growth rate of over 700%. The deals totaled nearly $23 billion. Compared with the number of global accounts opened, the current active NFT addresses on the whole platform are insignificant, which shows that the future space of the NFT industry is broad.

Music NFT Track

A music NFT is a certificate of ownership of a unique audio or musical work that can be bought or sold. According to the International Federation of the Phonographic Industry (IFPI), the total revenue of the global recorded music market in 2020 was 21.6 billion US dollars, achieving six consecutive years of growth. According to MIDiA Research, the total number of music streaming subscribers reached 520 million in Q2 2021, up 26.4% from the same period last year. At the same time, the dominance of the music industry is shifting from the record companies that hold the copyrights to online platforms. Therefore, these big trends in the music industry have created a good breeding ground for the exponential growth of the music NFT track.

At present, according to NFTGO data, the liquidity of music NFT in one week accounts for 18.6% in the recent period (March 2022), which is similar to the liquidity of art NFT and practical NFT. It is worth noting that there are overlapping parts among various categories. However, regardless of the statistical dimension of transaction volume or transaction volume, and regardless of the statistical period of long or short period, the market share of music NFT ranks at the bottom of the whole NFT industry, far less than 1%.

In the short term, music NFT may not be able to fully solve the problem of artist income and the tokenization of fan traffic value. The track also needs a larger user base, the popularization of Web 3 concept and the maturity of technology. But the point of the track is to provide a better value distribution solution for artists and fan groups, avoiding layers of middlemen and preparing for structural changes in the music industry.

➢ Rarible

Rarible was founded in 2020 by Alexander Salnikov and Alexei Falin, with the main team members based in Moscow. Rarible was the first NFT trading platform to issue platform tokens, RARI, allowing users to participate in decision-making. Works published on Rarible can be seen on OpenSea, giving the work more exposure. Rarible currently has $274 million in transactions.

➢ Nifty Gateway

Nifty Gateway is an NFT trading platform, which was acquired by Gemini in 2019 and successfully introduced Pak, Beeple and other well-known artists. The Nifty Gateway has high requirements for creators, who must submit an application with a video introduction and an explanation of medium and long term goals. NFT will charge a 5% sales fee for both the first and second sales. The platform offers a variety of auctions, with each auction carefully planned and even with a different theme. The Nifty Gateway team has a strong network of celebrities and publishers including Steve Aoki, PlayBoy, Sotheby’s and others who publish NFT works, and auctions often generate buzz. The Nifty Gateway allows fiat to buy NFT transactions in addition to cryptocurrency transactions, and distributes the proceeds of the sale directly to bank accounts, but is currently only available to US users.

➢ Foundation

Foundation is an NFT trading platform that uses community-led and time-limited auctions to generate works that are also published on OpenSea. Each time the original 50 artists invited to the platform successfully sold an original work, they were given two slots to invite new artists to the platform, and so on. If an artist buys or sells invitation codes in bad faith, he or she will be deprived of permanent residency. There is also Community Upvote, which means that all members of the Twitter-verified Community can get 5 votes to support the 5 artists that can be registered, and the top 50 can join the trading platform to create an NFT. On the transaction side, Foundation’s artist users set a reserve price for NFT works, and after the first bid, the works are automatically auctioned in a 24-hour limited time. At present, the transaction volume of Foundation has exceeded 50,000 ETH and more than 300,000 Twitter followers.

➢ Audius Project

Founded in 2018, Audius is a decentralized music streaming agreement that aims to bring music creators and fans closer together. According to the information on the official website, the pledge amount of governance token $AUDIO currently reaches 294M, with an average annual pledge yield of 24% and monthly active users of 6.01 million. Audius’s token economy consists of three tokens: the governance token $AUDIO, the stablecoin, and the artist’s personal token. Content uploaded by artists is stored in AudSP, a separate network built by Audius on IPFS. Artists need to pledge $AUDIO in order to issue individual artist tokens, which can be issued for additional help from the platform, and fans need to purchase the tokens in order to watch the limited content of idols.

➢ Opulous

Opulous is the financing, lending and trading platform for music copyright NFT, offering buyers the opportunity to purchase a share of music rights that generate monthly royalties and grow in value over the course of an artist’s career. NFT owners can withdraw these revenues from their Opulous accounts and trade them on the Opulous NFT exchange.

1. At present, the mainstream NFT trading market is mainly based on the C2C model, while Euterpe is positioned as a B2C business model. The market entry threshold of the B2C model is higher, and the future valuation potential is broader.

2. At present, the mainstream NFT trading market is dominated by UGC with uneven quality. Euterpe focuses on professional and the most popular works instead of UGC. The reason for this is that the copyright industry itself is a head economy, and UGC itself brings limited traffic and value. Using top-quality works as an entry point can help Euterpe achieve a significant amount of traffic in a short period of time and attract mainstream players to the NFT market.

3. At present, NFT products in the mainstream NFT market are mainly copies of works rather than copyrights. In the case that NFT does not tokenize the copyright itself, the investors of NFT can only cash out by buying low and selling high, but cannot obtain the income from the commercial operation of the copyright itself and the continuous royalty income. Euterpe focuses on copyright NFT and tokenizes the copyright so that investors can obtain the copyright operating income and continuous royalty income by holding the copyright of the works behind NFT. There are only a few other projects that are trying to combine copyright with NFT, but none of them currently have a workable specialization to implement this model. At present, there is only simple, shallow work income sharing mode on the market. This is because copyright operation and trading itself has a very high professional and legal threshold. This is the superior resource of the Euterpe team.

4. At present, due to the lack of copyright protection and legal compliance resources, the mainstream NFT trading market is full of copyright infringement, fraud and violation risks, which bring huge risks to copyright owners, investors and the NFT market itself. As Euterpe has certain competitive advantages in this respect, the team has the strength to build an effective copyright protection mechanism to avoid copyright infringement and establish a compliance route to realize the compliance operation of the platform, so as to protect the interests of copyright holders and investors.

5. Euterpe focuses on SocialFi and reserves 66.5% of its tokens for the community to encourage greater participation in the ecosystem and share in the benefits of platform and product growth.

Industry Risk

At present, music NFT track of participants is relatively small, with relatively limited user groups. Most of the related project participants are speculative, especially in the situation that mining play has no lock period. Speculators may spend less time on the EUT community construction, thus worsening other users’ engaged experience, causing the user retention rates to be low.

Technical Risk

The EUT Ecosystem project has a grand vision. It not only plans to build EUT ecology on Ethereum and multiple L2 chains, but also hopes to open up the Wechat moments and other Web 2 ecology. This tests the technical ability of the team.

Euterpe is a copyright NFT platform powered by IP and embedded in the SocialFi ecosystem. The advantages of the project mainly include strong financing and strategic partners, precise target on market pain points, and the strength and qualification of the team to implement practical solutions. However, the project products have not been publicly issued, nor has the token sale been carried out, and all aspects of the project still need to wait for the market test.

Project financing and the expansion of strategic partners are the guarantee for the follow-up implementation of the project. The project has received three rounds of financing, the seed round of $3.6 million led by Fenbushi capital, the second round of financing from Huobi, and the third round of financing from HKICEx. In addition, Euterpe’s strategic partners mainly include some famous investment institutions, law schools and service institutions. The strategic partners are highly related to the project business, and the partners are distributed all over the world, which is conducive to the extensive layout of the business.

The project really hits a long-standing pain point in the copyright market and provides a solution. In the field of music copyright, Euterpe is changing the way of value distribution by restoring the market value of the streaming media content and download music works, minimizing the copyright licensing transaction costs involved to expand the royalty income of artists. Realizing traffic profit through three ways of mining, and designing the way of crowdfunding to reshape fans economy.

In addition, the team has certain strength and qualification to implement practical solutions. The core team has an exceptional educational background, most of which are PhD students from Stanford University. The team has certain legal research capabilities and blockchain development capabilities. It is familiar with the traditional copyright industry, and has certain product operation and marketing capabilities.

However, Euterpe is still in the early stage of the project. Alpha version of the product has been completed, but the public version has not been launched yet. The playability of the product still needs to be tested by the market and users. At the same time, Euterpe also needs to be tested by the market for the reliability of the product technology and mechanism, and the interaction between the product and the user should be smooth. In terms of mechanism, because some benefits of mining play have no lock period, EUT needs to resist the potential “mining and selling” speculation in the market. Euterpe has no token sales and therefore no market data, and it will take time to verify whether users can pay for EUT’s solution.

Overall, the project has good prospects, but we still need to wait for the market to test whether Euterpe’s project plan can be valid.

https://eut.io/

https://digitalcommons.law.buffalo.edu/buffalolawreview/vol69/iss4/2/

https://www.jinse.com/lives/276302.html

https://www.jinse.com/lives/277845.html

https://www.jinse.com/lives/281202.html

Author：Zoe Song