2022, a year of challenges?

We actually started conceptualizing everwave in 2021. 2021 was a flourishing year for web3, the market was doing great, investment money was flowing, and blockchain technology was full of promises for new forms of organizations such as DAOs, but also for creative industries such as art or music. 2022 was supposed to be the continuation of that, but things played out a bit differently. We entered 2022 with a slow but steady market correction, until the Luna meltdown hit in May 2022. After a wave of bankruptcy in the space affecting everyone, FTX crash happened in November 2022, and set everyone for an extra rollercoaster ride. All that to say, it hasn’t been an easy thing to raise money in 2022 for web3 projects, and those who managed to do so deserve praises for sure.

On our end, we’ve managed to surround ourselves with Angel Investors full of conviction in what we’re building. We couldn’t have asked for better support. It allowed us to build a first alpha version of our app, delivered in April 2022. It also allowed us to reveal ourselves with style during the latest edition of NFT NYC, in May of 2022.

Finally in October of 2022 we were able to release a better version of our app (still desktop only) and launch our closed beta phase, onboarding close to 100 musicians and producers on 3 different waves. This was a major milestone for us as it was the first time we put the app in the hands of artists, and start gathering user feedback. The feedbacks were tremendously positive: artists loved the creative concept we offered them. So much so that they have blessed us with close to 50 original tracks, now living on our app and available for anyone to listen to. We can’t encourage you enough to go check them out, have a listen, and see how we put in perspective artists creation and inspiration cycles. It’s truly a beautiful thing to witness!

2022 was tough to go through. A lot of projects trying to help creators had to size down (we did), and some of them even had to shut their operations down (Rally, Mintsongs). I’m thankful for the dedicated team that we have, their conviction, and all the artists that have joined us to produce incredible music on our closed beta waves. Now that spring has come, it’s time for everwave to move on to its next phase, pushing towards more decentralization and putting artists first.

2023, what’s in your bag?

The missing piece of the everwave product cycle is our marketplace. We’ve encountered some delay around it and had to go through a bit of re-organization, but we’re finally there. Our marketplace is coming either this month or the next, and this will kickstart the next phase of everwave. Once the creation cycle for our Wave 01 is over, we’ll shut down the possibility to add any new stem or version. A list of the credits for all the versions included in Wave 01 will be published and we’ll ask our community of creators to verify it, to make sure credits are correct before we move on to the minting phase.

Meanwhile, we’ll open up a vote where only our token holders will be able to participate, and we’ll ask them to vote for their favorite versions within Wave 01. Doesn’t have to be just one, can be multiple choices. Community curated versions will then be turned into NFT, along with the whole Wave 01, and sold on our marketplace. Wave 01 NFT will be sold through an auction, as a 1 of 1 NFT on Solana, whereas versions (now called “Ripples”) will be sold at a fixed price as 10/10 editions. In the same movement we’ll airdrop the $WVE tokens locked into our “creativity mining” smart contract: every creator credited in wave 01 will receive an airdrop of $WVE tokens, rewarding their creative effort but also allowing them to have a say in the governance of the DAO which now owns the rights to all the songs created on Wave 01.

The final step of this post-creation phase will be the release of the community curated music on major streaming platforms, for everyone to listen to. Our DAO has built its own music publishing arm. We’re also working with a distributor in order to maximize our presence online, and make sure everwave’s music is available everywhere. Once this cycle is done for Wave 01, Wave 02 will follow, etc. Fast enough, our community should be able to reach a fairly high degree of decentralization and this is something we’re really proud of.

As we’re gearing towards this new phase of the project, we’re also getting ready to go back into fundraising. Since the beginning we have chosen to raise by solely selling our token, staying true to our DAO model. It has been heavily challenging in a context where more and more investors started to lose faith in tokens throughout 2022. I already lived through that moment back in 2018/2019 with Telcoin, so I’m not really surprised this is happening again, but it’s not making things any easier for us. Nevertheless, confident in what we’ve built so far in terms of tech, our community of creators, and the amazing music the DAO gave birth to during our closed beta, we’ll enter the second half of 2023 assured that we’re in the best position to achieve our fundraising target and continue develop our product.

Conclusion

2021 & 2022 have been the years that have displayed tremendous interest in web3 from the general public, either through purchasing NFTs or participating in DAOs. Unfortunately, just like ICOs in their time, most of them were not in the space for the best reasons. Despite that, we believe that web3 technologies bring several crucial elements for creators, such as transparency, automaticity of the payments, or a digital collectible market that has never existed before for the music industry. We’re doubling down on the DAO model for creators. If there’s one relevant use case for DAOs and NFTs, it is in the creator’s economy. We’ll do our best in 2023 to show just that, and we hope we’ll be able to benefit from your support in this endeavor.

If you’re interested in digging more about everwave, you can use the following links:

Our collaborative music production app (desktop only):

https://app.everwave.xyz/

Our landing page:

https://everwave.xyz/

Our discord:

https://discord.gg/BrnvHYK2zx

Coming to the everwave ecosystem, you will probably have many questions about where the DAO tokens ($WVE) come from, where they go, how they transit from one party to another etc. This blogpost is meant to bring clarity to our tokenomics, and help you understand what the $WVE token stands for, how the DAO tokenomics are structured in a way that allows for fine tuning, and what it means to be a $WVE token holder. We will explore in detail all the ways a $WVE token goes out from the DAO controlled pools, and all the ways it goes back to DAO controlled pools.

Basics of $WVE

$WVE is an SPL token. SPL is the token standard for tokens living on the Solana blockchain, just like ERC-20 is a standard for tokens living on the Ethereum blockchain. $WVE has a supply of 1,000,000,000 units, and 9 decimals.

The $WVE token is split between 6 pools:

• The DAO Treasury pool (33%)

• The Creativity Reward pool (40%)

• The Team Bonus pool (19%)

• The Private Sale pool (5%)

• The Scholarship pool (2%)

• The Private Beta pool (1%)

Half of these pools will get used up over time, and never get replenished:

• The Team Bonus pool

• The Private Sale pool

• The Private Beta pool

The other half will be involved in the DAO tokenomics. We will go over those tokenomics later in this blogpost.

In & out

There are several occurrences where a token is going to come out of a pool, into the market. Let’s go pool by pool and examine those cases.

• DAO Treasury pool

The tokens contained in the DAO treasury will be used for 1 main purpose: compensating people performing work for the DAO. This can be achieved by giving away $WVE, or by converting $WVE token into a Solana based stablecoin (USDC/USDT). In case we give away directly $WVE token, the impact on the market will be fluctuating as some recipients might decide to hold on to their tokens while some others might decide to sell immediately. In case we convert to USDC/USDT, then the impact will be immediate, as this transfer will happen on the open market. The DAO treasury might find utility in use cases other than compensating people for performing a task for the DAO, but in all cases it’ll be subject to a vote from the community members.

• Creativity Reward pool

The tokens contained in that pool will be used to incentivize music creation through everwave. At the start of each wave, we’ll lock an amount of $WVE tokens coming from that pool into a smart contract. Once a Wave is complete and participants decide to stop that Wave, those same participants will be able to claim an airdrop in $WVE tokens, unlocked by the smart contract. Participants rewarded this way will be able to either reuse those newly acquired tokens in the app ecosystem, sell them on the open market, or just keep them in their wallet.

• Team Bonus pool

The tokens contained in this pool will be gradually distributed to team members over a period of 2 years. Once team members are able to claim these tokens and receive them in their wallet, they’ll be free to sell them on the open market or hold them.

• Private Sale pool

The private sale pool is similar to the Team Bonus pool. Tokens included in this pool will be distributed to accredited investors who have bought $WVE tokens through our private token sale. The tokens in this pool are vesting over an 18 months period.

• Scholarship pool

We have decided to set up a Scholarship pool in order to be able to onboard musicians with limited financial means. $WVE tokens from this pool shall be distributed to selected candidates, upon approval by a community issued committee. The amount of tokens distributed to the selected candidates will allow them to participate on everwave, keeping these tokens in the app ecosystem.

• Private Beta pool

$WVE tokens from this pool shall be used and distributed to selected beta testers who will help us get some early data and user feedback about the v1 of everwave and make the final tweaks, before we open up to the general public.

Now that we have established all the ways a $WVE token might end up on the market coming from the original pools, let’s see how, through our tokenomics and the app ecosystem, some pools might get replenished along the way.

This is the way

$WVE tokens enter the app ecosystem through users. In the following examples you'll see how the $WVE token interacts with the app.

• Token Gating

Our app and community are token gated. This means that in order to access the app or our community on discord, one of the prerequisites is to have a minimum amount of $WVE tokens in your wallet. The idea behind this is to build a community that has “skin in the game”. These $WVE tokens will stay in the user’s wallet - we won’t ask the user to send them to us or anything else. They won’t circulate in the app ecosystem, but they will serve as an access key to our community.

Token gating related to a token has historically brought up an obvious problem: once the token used to gate the community rises in dollar value, then the price to join the community becomes prohibitive. This is a problem that has been difficult to solve, as lowering the amount of token units needed to join the community usually leads to a dump on the market, which lowers the dollar price of the token and makes existing holders unhappy. The main reason this happens is because the token often has no clear utility besides gating the community, allowing governance and being an avatar for the value of the project. In everwave’s case, the $WVE token has a utility beyond the ones mentioned above, and there’s an incentive to keep your $WVE tokens to participate in the creation of waves, even when the token gating price is lowered. The stem upload fee explained below is one of them.

• Stem Upload Fee

As a musician, whenever you want to upload a new stem, you’ll have to pay a small fee in $WVE token. This fee serves different purposes and is structured in a way that will be seamless to users. It serves as both an anti-spam structure & a way to have the $WVE token circulating and re-allocated according to the DAO’s desires.

We know that implementing a system like “creativity mining” could potentially attract bad faith actors trying to farm rewards by uploading tons of low quality stems in the hopes of having at least one of them included in the wave. The upload fee here is meant to deter those actors by making this behavior increasingly expensive. The other merit it has, is that the fee can be rerouted in multiple ways. For now, every time a stem upload fee is paid by a musician, it will be redistributed in the following manner:

• 70% will be burnt

• 10% will go back to the DAO treasury pool.

• 10% will go back to the creative reward pool.

• 10% will go back to the scholarship pool.

The interesting thing here is that we see these percentages as a control board that the DAO can access, and tweak at any time. For example, if tomorrow the community decides that a special emphasis should be put on replenishing the creative reward pool, it can decide to decrease the percentage of tokens burnt from 70% to 10% for example, and change the percentage of tokens going to the creative reward pool to 70%. This brings extreme flexibility to the DAO, and it’s therefore also one of the reasons why we have this stem upload fee implemented.

Utilizing a combination of:

1/the DAO's ability to modify the amount of token necessary to upload a stem

2/the DAO's ability to modify how those fees are being used

We can really fine tune how the tokenomics of the DAO work, and help it achieve success.

We also mentioned that this fee would be seamless for users, and there’s a very simple reason for that. As a Musician, whenever you upload a stem onto the system and therefore pay an upload fee in $WVE tokens, there are two possible outcomes to that action:

1/Your stem gets used by a Producer and is included in one of the Versions that will compose the wave

2/Your stem is not used by any Producer, and you’re not part of the Wave that gets eventually minted as an NFT

In the first case, because your work is included in the Wave, you’re able to claim the Creative Reward. We have designed the stem upload fee to be very low, so that if you’re an artist who had to spend $WVE tokens to upload stems, and eventually receive a token airdrop, the token airdrop would exponentially outweigh the upload fee. This is the reason why we believe it would be neutral for users in this first case.

In the second case, you would be reimbursed all the upload fees you spent during the process. We are not trying to farm upload fees from users, so if you have uploaded a few stems but none of them have been picked by a producer, we would send your $WVE tokens back to you so you can participate in the next Wave without having to spend any more. However, if at least one of your stems get included in a Version that is part of Wave, opening you to eligibility for the creative reward, you wouldn’t be reimbursed for the stems that have not been included. Even in such a situation, the final reward should still largely exceed the upload fees, making the whole system neutral for users.

• The NFT Auction

Once the creative reward is distributed, we will move to the NFT minting phase. The Wave, as well as a series of community selected Versions, will be minted as NFTs and sold through auction on our marketplace. As described in the creativity mining article, while most of the revenue generated by these sales will flow back to the creators, a portion of this value will flow back to the DAO’s control and be redistributed to some of the pools, most likely the Creative Reward pool in order to incentivize the creation of new music. Through this mechanism we will have a net inflow of $WVE tokens in the DAO.

• Converting off-chain to on-chain revenues

As explained in our previous blog post describing governance processes, music created collaboratively through everwave will be managed collaboratively through the DAO’s governance. With each Wave created, we will have a series of community selected Versions that will end up being exploited on traditional Digital Service Providers (DSP) such as Spotify or Apple Music. The revenue generated by the streaming of these Versions will be sent to the everwave DAO on a monthly basis. The first thing that will need to be done is to convert these revenues from fiat dollars to $WVE tokens. Indeed, we’re not asking our users for their personal bank account information and don’t intend to redistribute this revenue through bank wires. Instead, the DAO will convert these fiat dollars to $WVE tokens. $WVE tokens acquired in this manner will serve as a basis to calculate the redistribution. A small fraction will go back to the DAO treasury, and the rest shall be redistributed to artists who’ve participated in the creation of the piece of music generating these revenues, according to the split information recorded in the corresponding NFT’s metadata.

This conversion phase is important and beneficial to the DAO & its artists for the following reasons:

-As artists keep creating music together through the DAO, the number of Versions being exploited through traditional DSPs will keep growing. This means that the amount of revenue generated off-chain should keep growing as well, leading to an increasing buying pressure for the $WVE token on the market, as the DAO converts that revenue to $WVE tokens for on-chain redistribution. Artists, who are $WVE token holders, will benefit from this market buy pressure, as well as the DAO which holds $WVE tokens in its treasury.

-Once converted tokens are distributed to artists, there will be 3 possible outcomes:

1/ The artist sells their $WVE tokens on the market right away.

2/The artist uses these $WVE tokens to keep interacting with the app and participate in the creation of new waves.

3/The artist will hold these $WVE tokens in their wallet.

Because of these different potential outcomes, we see clearly that the amount of purchased $WVE tokens on the market during the conversion phase is highly likely to be bigger than the amount of tokens sold on the market after distribution, thus creating a recurring net positive buying pressure for the $WVE token on the open market.

Closing thoughts

everwave’s tokenomics are complex, and there are many ways for a $WVE token to go in and out of the app ecosystem. It can flow through the user’s hands, go through the open market, land back into a DAO-controlled pool, etc. The everwave governance is designed in a way that allows for a granular approach to how the value-flow is controlled by the DAO. By having artists as main decision makers of the DAO and mechanics which allows fine tuning of the tokenomics, we make sure that creators, who are the ones who drive the value of the DAO-controlled-assets up, are also the ones who decide how this value is distributed. With everwave, we want to create a sustainable environment where creators are the masters of their own destiny.

With everwave, music is made collaboratively between people who, in most cases, don’t know each other. They have no existing agreements with each other, no pre-determination about how their rights as creative collaborators should be split, how those rights should be managed, etc. To avoid problematic situations caused by unjust exploitation or bad faith actors, we've worked to create a system that supports fair and equitable rights management of music created through everwave.

The everwave DAO acts as a central node for the rights management of all the music produced through our platform. Let’s try to break down the construction of a piece of music created through everwave, and see how this would play out:

The Musicians

Musicians provide the raw material that feeds the everwave creativity loop by recording their own original stems and uploading them onto the platform. It can be a bass line, a keyboard solo, a horn section, vocals, or any other musical element. We consider that these stems belong to the musicians who create them. They grant a free license to our DAO to use their elements in any way the DAO sees fit, relative to our tooling and creative workflow.

In return, the DAO rewards Musicians for their participation in a wave: they get to claim the Creativity Reward airdrop, as well as a percentage of proceeds from NFT sales and a share of exploitation through traditional music revenue sources. The everwave DAO is governed by its token owners: the Artists (our collective term for both Musicians and Producers), the fans, and any other token holders. Consequently, all Artists will be part of the governance and decision-making process, ensuring correct and fair compensation in return for the gratis licenses provided by Musicians to the DAO for their creative work. Instead of each person having to negotiate and manage their own rights individually, the community manages everyone’s rights collectively.

The Producers

Producers on everwave have a different role from Musicians. They are the ones who give shape and creative direction to all the stems that Musicians have contributed. Pulling from all the stems, the Producers choose what they would like to make use of and create their “versions”. It’s impractical to require each and every musical contributor to negotiate contracts and rights with each other every time they start an everwave collaboration. To address this, we’ve created a solution to rights management for a collaborative creative system that can both scale and retain its integrity.

On everwave, Producers use material provided by the DAO (through the gratis license agreed to by the Musicians) and create versions through a ‘work for hire’ type model where the hiring party is the DAO itself - which is governed by Musicians & Producers (the primary token holders). With this model, there’s no 3rd party exploiting creative work for their own benefit. We’re much closer to a collective approach to rights management, prioritizing fair remuneration to all contributing parties. As mentioned, the Musicians will own the rights to their own original stems, but the Producers will not own the rights to the versions they produce. Instead the DAO, which they all own a part of, will own these rights.

The DAO

We believe this is a new approach to collaborative music rights management, and an approach much more in line with web3 principles and DAO-style governance.

The everwave DAO will be the rights owner of the final creative products (the wave and the Producers’ versions). For the Musicians’ stem contributions, the DAO will have an unlimited license to make use of the stems, but will not own the rights to them. Our goal is not to expropriate artists from their creative work. Our goal is to find practical solutions for the management of collaborative work through a DAO structure, while keeping it fair and equitable for everyone involved. Here’s how we plan to achieve that through the everwave DAO using a hierarchy of governance levels and tokens:

• The $WVE token This token represents ownership in the DAO, and consequently it also represents ownership over music that is produced through the DAO. Decisions regarding the DAO rules will be taken by a vote based on token ownership. At the launch of everwave, the founding members will define the initial system rules, but as the DAO grows, DAO members will be able to modify those rules however the community deems best. $WVE is also our utility token, used in-app when Musicians and Producers participate in a wave.

• The Membership Token This token represents approved members - people who join the DAO, either as Artists or as Friends (non creatively-participating members). Every decision relating to how the community functions and flows will be decided by holders of this Membership Token. The only way to change this governance rule will be for $WVE token holders to collectively agree to a proposed change. Until such time, the Membership Token will be the governing token for all DAO activity-related decisions.

• The Participating Token This token will be distributed to every member who participates creatively in a wave (Musicians and Producers). It will be used to identify users who are allowed to vote on decisions regarding the specific wave they are collaborating on (eg, when do we decide to close this wave?).

• Ripple Token, or Address Whitelisting When a Producer’s version get selected by the everwave community and minted as a “ripple NFT”, the Artists who participated in this version will receive a Ripple Token. Every decision related to this specific version will be governed by the holders of this Ripple Token (eg, do we want to release this version on Spotify? On Bandcamp? Are we ok with a sync for a car commercial? etc…)

In conclusion, each of these governance levels works somewhat like a Matryoshka doll. A higher level of governance can change how a lower level is supposed to work, but once the flow is defined, only that lower level gets a say in how to govern its own specific elements (community, waves, versions…).

We believe this is an ideal way to structure the system in order to make it as fair as possible for everyone. There’ll always be loopholes, and in our case there’s an obvious one: what if the $WVE holders decide collectively from now on, the rights for the Producers’ versions should be administered not by Ripple Token holders, but by the whole community of $WVE token holders? With the $WVE token being our highest level governance token and thus defining ownership of the DAO, this could always be a possibility. That said, there are two strong arguments to illustrate why this is an extremely unlikely outcome:

1. The Creative Reward pool, which goes to Musicians and Producers, represents 40% of the entire token supply. The founding members token allocation represents 18% of the token supply. This means that theoretically at least 58% (a clear majority) of the governance tokens will go to Artists and Founders, who both would have no vested interest in changing these system rules.

2. If someone had enough financial resources, and if the possibility somehow presented itself (meaning more than half of the entire token supply being available on the market), a bad faith actor could theoretically try to purchase 51% of the token supply, and change those rules so that they get to then govern the rights of each Producer’s versions. That would mean mobilizing a substantial amount of money to take over a network for which, if you were to change its rules to a more centralized and authoritarian model, would lose its value proposition to creatives, and consequently most likely lose most of its users. Game theory gives a clear counter-incentive to such an intentionally anti-community action.

Considering this, we’re confident that our initial governance rules won’t be changed until such time that something even more fair and virtuous is proposed, and definitely not a change to something that would be detrimental to Artists.

everwave proposes a system for fair, equitable and fun creative collaboration that has a clear value offering for Musicians and Producers without having to concern themselves with negotiating rights and shares. We believe this is unique and much needed, and we’re excited to kick off this journey and see where it leads…

There needs to be some context explanation before we can get to where we want to go with this piece. If you’re new to the blockchain space, or not familiar enough to be DeFi savvy and understand the concept of liquidity mining in & out, you might need some definitions to understand what’s behind the concept of creativity mining. If you got into the Decentralized Autonomous Organization (DAO) space through the prism of culture and community, this might feel boring and uninteresting as we’ll have to dive into Decentralized Finance (DeFi) mumbo jumbo, but please bear with us as we promise we’ll try to make it worth your time.

Liquidity Mining: The concept that sparked the DeFi boom

As reported & analyzed many times since its inception, Compound protocol kickstarted the concept of liquidity mining by distributing $COMP tokens to its users in June 2020. From there on, most DeFi projects started to adopt this method to attract liquidity to their project and reward users for bringing this liquidity.

What does liquidity mining exactly mean though? People often confuse liquidity providing and liquidity mining. Thankfully, Glenn BONΞZ Bona made a very welcomed and easy to understand distinction in this blog post:

Liquidity provision is where a user provides liquidity to a trading pair and reaps rewards from trading fees. So when a user swaps between the two tokens a small fee is charged. This fee is where rewards for liquidity provision providers come from. [...] Liquidity mining is similar in the sense that you provide liquidity however you’ll then receive a LP token that needs to be staked in order to earn rewards reserved for the mining program. These liquidity mining rewards come directly from the project's liquidity provision incentives.

From the point of view of a DeFi project, liquidity mining programs can be broken down in 3 steps:

• 1- Ask users to provide liquidity for your project.

• 2- Ask users for proof that they are indeed providing liquidity.

• 3- Reward users.

The reward is usually the project governance token (or DAO governance token). Depending on the success of the project, it holds a certain value, and also gives the right to its owner to participate in the governance of said project. Liquidity mining is a powerful tool that has been used heavily for about 2 years now, but has started to show some limitations.

Limitations of Liquidity Mining

We will try to be brief here, as this article is not meant to be about liquidity mining. Andrew Thurman went over these limitations in an article published on Coindesk recently. The obvious problem that most liquidity mining programs run into is that the amount of tokens allocated to these programs is limited, so one of two phenomenon eventually happens:

-The supply of tokens allocated to liquidity mining programs runs dry Or -The yields offered by new projects with a fresh supply outperform the yield older projects can offer and we see a migration of the liquidity from one project to the other.

Either way, this is not a sustainable incentive. How does this relate to the topic of this article though? Well it’s pretty simple. We are going to see how creativity mining uses a similar mechanism to liquidity mining, but in a more virtuous and sustainable way for artists coming into web3.

The concept of Creativity Mining

Based on what we’ve seen so far, the concept of creativity mining could be summarized in 3 steps, similar to liquidity mining:

• 1- Ask users to create something.

• 2- Ask users for proof that they indeed created something.

• 3- Reward users for creating.

In the concept of liquidity mining, users are rewarded for the risk they’re taking by providing liquidity on DEX, where they’re subject to potential Impermanent Loss. This makes sense in a classic model of risk/reward.

In a creative environment however, there’s no “risk” to reward (we’re not going to explore philosophical considerations around creation as a risk here, and just assume there’s no risk). Rather, creativity mining rewards creation in an environment where this creation benefits the entire DAO because the value of the creation somehow gets reflected in the DAO token value. If you create a DAO where you want to build a movie collaboratively, or a painting collaboratively, you can imagine a situation where:

• 1-User A draws a character on their computer.

• 2-User A uploads the character onto the system.

• 3-The system understands that user A has made an artistic contribution, and rewards them with DAO tokens.

Of course, there has to be sets of rules in place: what is an artistic contribution, who decides which contribution deserves to be integrated in the final work, how many tokens should one contributor receive, etc…All these rules can be decided collectively by the DAO members - they’re not insurmountable issues.

It’s all about value

One of the problems of the liquidity mining program, as we’ve mentioned earlier, is that it is not sustainable. Either the supply runs dry, or the yield offered by the program becomes outweighed by other programs. These two problems are the results of several factors:

• 1- There’s little to no incentive beyond the financial incentive in the DAO.

• 2- Lack of community spirit in the DAO - this is a by-product of the first factor.

• 3- The DAO doesn’t create enough value through its product/service.

• 4- The DAO doesn’t extract enough value from its product/service.

From a DeFi standpoint, these problems are hard to overcome because the DAO usually doesn’t have a product or service to sell to people. DeFi-based DAO usually offer services that are free and collect a small fee somewhere in their application flow, but this small fee is generally not enough to provide for the needs of the DAO & finance a strong and sustainable liquidity mining program at the same time.

Now imagine somehow they were able to come up with a sustainable liquidity mining program, meaning users of these programs could perceive value indefinitely, the trade-off here being that this value would be smaller, but last longer. In this case, It would only take someone to fork the code and offer higher yields to drain the target DAO’s users (See Vampire attacks). The reason why this is possible? DAO in the DeFi space are often weak when it comes to creating culture, and culture is at the heart of community building. When you don’t have culture or community, the only thing that connects your DAO to its members is financial incentive. As we’ve seen with vampire attacks, this can come and go very fast.

With creativity mining however, things are totally different. First, for DAOs operating in the culture space, through each creative cycle a collaborative product comes out as a result. This cultural product gets to be sold as a NFT, gets to be exploited IRL, etc… It generates extra value that can be redistributed to the members of the DAO - those who have helped create it. On top of that, these DAOs usually create a strong culture and sense of community, because they’re usually built around a shared interest that goes beyond money: Love of books, love of cinema, love of music, etc… You can fork a DeFi project’s code, but it’s much harder to fork a strong cultural community.

At each step of the product cycle (elaboration, sale as an NFT, exploitation IRL), value can be extracted by the DAO and be redistributed to its DAO members through virtuous tokenomics. In this case, in contrast to web2, it’s ok to extract value from the DAO members for the DAO itself, because the users themselves own the DAO through token ownership, and so this value eventually gets redistributed to them. (see figure below).

In the example above, we get a glimpse into a potentially sustainable value redistribution cycle:

DAO’s artists produce art, which gets sold online/offline and generates value. This value gets split in two: one part is allocated to paying artists for their contribution (2) and the other part is used to replenish the DAO’s treasury (3), controlled by the artists. Then, through the creative cycle, a fraction of this DAO treasury will be used to reward artists with a creative reward airdrop using governance tokens (1).

The example of the French CNC

In France there’s a state run organization called the “Centre National du Cinema”, CNC, which is intended to help finance the production of French movies. Here’s how it works, in a nutshell: There’s a tax on movies being exploited in France at cinemas, on television, and on video. This tax is imposed on every movie, even foreign movies. The money collected goes into a common pot, and every year, it’s allocated to new movie projects based on a committee approval. In this system, creation finances creation in a virtuous cycle. Bigger, more commercial and successful movies help the creation of smaller, more progressive movies.

This system has been in place for more than 50 years in France, and is regularly praised by the entire cinema industry there. Creativity mining is simply mirroring this, showing that fair redistribution of the created value in art & culture can lead to a sustainable financial system.

Conclusion

DeFi shows us that with the proper incentives in place, you can move mountains (or liquidity). DAOs built around culture & art show us that these are the strongest priorities for a community to solidify around. The combination of these two is creativity mining: exchange your creativity for governance tokens in the DAO that will govern the final cultural product, the result of a collaborative work between DAO members.

This model is still very experimental, just like DAO, DeFi and the whole web3 space in general. It will keep evolving, maybe it’ll stick, maybe it won’t. But we are convinced this is a potential paradigm shift for artists, and something that is achievable thanks to all the technology enabled by web3.

About everwave

https://everwave.xyz/

https://twitter.com/everwavexyz

everwave is a Solana based Decentralized Autonomous Organization (DAO) facilitating an online collaborative music production platform. Our core product is a webapp where members of the DAO can connect through their wallet, produce music together and get rewarded.

At the beginning of a Wave, there’s a musical idea: one or more Musicians create this seed idea, providing the inspiration for others to contribute to. Anyone coming to the platform can listen to it. Any DAO member can choose to join in by uploading their own parts to the Wave, or by producing a completely different Version using the existing parts.

As the Wave grows, participating Musicians and Producers can collectively vote to close the Wave and mint it as an NFT - or choose to keep the collaborative creation process flowing until they decide otherwise. On top of that, the whole DAO will vote for its favorite Versions from the Wave and the selected ones will be minted as Ripple NFTs (think of these as ‘singles’).

Musicians who participated in the Wave will be rewarded in 3 ways. First, they will be able to claim the creative reward airdrop from the everwave smart contract. Second, they will receive revenue from the sale of the NFTs. Third, they will receive a revenue split based on any additional exploitation of the minted Ripples - all the contributors share in what’s been created. Once this process is done with, a new Wave can begin, and the cycle starts again.

Definitions:

Wave

A Wave is a music+visual file. The music side of it is a fully original object. The outcome of a collaborative creative process, going from the first draft of a musical idea, to the completion of several different musical ideas into songs, with the help of a diverse crowd of Musicians and Producers. The visual part is a generative art 3D object which reacts to the music as it’s being played. In that way, each Wave will have a completely unique visual, since each piece of music will be unique as well.

Version

A Wave is basically a collection of Versions. A Version is what is uploaded by a Producer, it’s their creative vision based on the previous Versions, and the available pool of stems. When a Version is minted it becomes a Ripple.

Ripple

A Ripple is what will be minted as a NFT along with the Wave itself. The community will vote for its favourite Versions composing the Wave, the selected Versions will get minted as Ripple’s and go for sale.

The Product

everwave was created by a group of musicians, producers, arrangers and music lovers, who decided to get together to seize the opportunity that web3 offers to reshape the way music is being produced, and above all, how the value generated by music is being redistributed. We all believe the current ecosystem around the music industry as a whole could do so much better. Many projects have been launched in the past few months, trying to tackle these issues. With everwave, we want to show that it’s possible to connect to the world, produce music together in a creative way, and get fairly rewarded for it.

everwave is as a platform showcasing the ongoing evolution of a collectively created piece of music. To kickstart this process, one or more Musicians from the community will create a seed idea, and upload it to the platform. Each member of the community will be able to draw inspiration from this initial Version, and add their own parts. Imagine the early draft has drums, guitar and bass. A sax player can decide to join in, add a saxophone part they've recorded and propose it for integration into the Wave. Contributors defined as “Producers” are in charge of arranging and integrating these contributed parts into the original, thus creating the latest Version to become part of what we call the Wave. Imagine the early draft had a jazzy vibe. Maybe one of the Producers will decide to simply continue the original idea of this draft, and integrate the sax while keeping the jazzy vibe. Maybe another Producer will be inspired by this new saxophone stem, and decide to make a drum’n’bass Version out of it. And maybe another Producer will make an ambient Version out of this. Those different Versions will come one after the other in chronological order and collectively form the Wave. The Wave will keep extending through a feedback loop between Musicians & Producers, with the former providing raw material, and the latter giving shape to this raw material. This process will go on until the community of participating creators collectively agrees that the Wave is complete.

After the community agrees the Wave is over, two things will happen:

The Minting

-The DAO will mint the full Wave as an NFT. We consider the Wave as a very singular piece of art. A witness of human creativity and shared inspiration. The Wave might even be hours long - sometimes experimental, sometimes repetitive, a documentation of collective process. Within this Wave, we'll have plenty of Versions made by different Producers with the potential for each Version to exist as its own stand-alone track. We will ask our extended community to vote for their favorite Versions, and these community-selected Versions will get minted as NFTs, sold on our marketplace and exploited on traditional DSPs. We call these Versions Ripples.

The Airdrop

-We will use a smart contract to automatically airdrop a reward allocation of $WVE token to every member who participated in the creation of the Wave. This includes every Musician who has at least one stem included in the Wave, and every Producer who has submitted at least one Version to the Wave. Because the impact and importance of a contribution to a collaborative piece of music is very difficult to actually quantify, we’ve decided to go for a very simple split which consists in taking the total amount of tokens per allocation, and dividing it by the amount of eligible creators for that Wave. This formula gives us the amount that will be airdropped to each creator at the end of each Wave.

This covers the cycle of creation on everwave. When everwave first launches, only admin members of the DAO will be able to kickstart a new Wave with a new seed idea. We will start one new Wave each week, regardless of the status of other ongoing Waves - meaning that multiple Waves can be concurrently in motion. In the future, we plan to extend this access to DAO "super-users" who have shown themselves to be valuable community members through having multiple interactions with Waves and voting processes.

The Wave Visual

Although everwave is focused on music production and creation, we love dynamic visuals too and have built something special with this in mind. Lia Coleman, an extraordinarily talented creative coder & artist is working with us to produce the Wave visual, a 3D object which responds to sound frequencies, and changes shape accordingly. We plan to keep developing this visual and future iterations will have features including visual representation of who you're hearing at that moment in time. We'll also be collaborating with a range of visual artists to bring new looks and feels to future Wave visuals.

The Token

everwave is not only the webapp, it’s also a DAO based on a community and a governance token: $WVE. The $WVE token has a total supply of 1,000,000,000 tokens, and is distributed as follows:

Tokens allocated to the private sale will be vested for 18 months, while those allocated to the founding team bonus will be vested over 2 years, gradually, in order to avoid any sudden sell-offs.

The $WVE token will serve several purposes:

Utility

$WVE token is used in our webapp to pay a nominal fee when uploading a new stem. It’s also used to token-gate access to our community and application. We’re building a token-gated community where members are ready to show they are committed to the success of the DAO. Depending on the unit price of the $WVE token, we will make necessary adjustments in order to keep the entry bar accessible at a reasonable level.

Governance

Our governance is accessible to anyone holding $WVE tokens. This is the highest level of governance. Below that, we have further layers of governance related to community and content management (See below the Governance section for more details).

Value Distribution

We use the $WVE token to redistribute the value created through the DAO. We airdrop governance tokens to creators, and require DAO members to hold a minimum amount of $WVE in their wallet (token gating). Through this process, we make sure that creators will be the first ones to benefit from the value that they have themselves contributed to create.

The Governance

The highest level decisions about how the DAO functions will be governed with proposals and voting open to all $WVE token holders. To maintain the integrity of the system we’ve created, we also have sub-layers of governance managed by specific tokens, allowing for a granular approach to the DAO and music management rights.

Member Token

Everyone who applies and is accepted into the DAO will be issued a Member Token, giving voting rights to the holder to address all issues related to community management. Holders can vote on issues regarding the community (eg, ban a member from the community for bad behavior).

Wave Token

Everyone who participates in the creation of a specific Wave will be issued a Wave Token. Holders of this token will be called on to vote when we need to make decisions at the Wave level (eg, when do we close that specific Wave?). These tokens will be tied to each specific Wave with a unique identifier to indicate which Wave it corresponds to and allows voting for.

Version Token

Everyone who participates in the creation of a specific Version will be issued a Version Token. Holders of this token will be called on to vote when we need to make decisions at the Version level (eg, do we want to make Version x available on Spotify? Do we allow Version x to be used in a Nike commercial?). These tokens will be tied to each specific Version with a unique identifier to indicate which Version it corresponds to and allows voting for.

To be clear - anyone can hold $WVE tokens, but token holders will not automatically be members of our community on Discord. Not all DAO members will be contributors to every Wave or Version and this multi-layered governance approach gives the community confidence that the right people have a say in the stages of the process that they’re directly involved with.

This structure is a direct reflection of our approach to rights management on everwave. On everwave, nothing would happen without everyone’s participation, so we’ve decided to take a collective approach to rights management. Every Version produced through everwave will belong to the everwave DAO, which in return is owned by the $WVE token holders. $WVE token holders will primarily be the creators on the platform - who are required to hold the token to participate and interact, and will have access to the Creative Reward Pool (40% of the entire token supply). Thus, rights management will be collective and based on the different governance layers described above: only artists involved in the creation of a specific Version will have a say about how to manage that Version. If you want to learn more about this aspect, read our other blog post about music rights management within everwave, our Terms of Service, and our user agreement (all to be published soon).

With time, we want to build a community of Musicians & Producers making music together. Something of a creator-owned and managed label, fit for an online world revolving around web3 dynamics. We’ll start by having consecutive Waves, with the intention to open up the system and let experienced community members kickstart their own Waves with multiple Waves running in parallel. We hope you’ll join us in this adventure and become a member of the everwave community to take part in creating incredible music and help build a better ecosystem for creators.

About everwave

https://everwave.xyz/

https://twitter.com/everwavexyz