Introduction

The music industry is a unique segment within the entertainment sector, encompassing companies, individuals, and organizations that generate revenue through songwriting, live concert sales, audio and video recordings, composition, and sheet music. Currently, the most notable music producers include (1) BMG Rights Management, headquartered in Germany; (2) EMI Records, headquartered in the UK; (3) Universal Music Group, headquartered in the Netherlands; (4) Sony Music, headquartered in the US; and (5) Warner Music, headquartered in the US. These five companies represent the majority of works by globally renowned artists, with leading music producers in Western countries establishing a certain degree of market dominance.

Web3 music was once considered the next major growth sector after NFTs, following an evolutionary model from images to sound. Well-known projects in the Web3 music space include Audius, Sound.xyz, and Arpeggi. The core argument for Web3 music products is that they can increase creators’ income while avoiding the exploitation of intermediaries. Essentially, Web3 music represents a creator economy, but this economy faces challenges due to the significant disparities in creativity and popularity among creators. While top creators enjoy strong bargaining power and substantial economic gains, the vast majority of creators contribute only a minimal share of the industry’s total economic value.

Web3 music refers to music products built on blockchain technology. Blockchain is considered advantageous for addressing issues such as copyright protection, artist revenue distribution, and transparency of music data. Most Web3 music products are either streaming platforms or music royalty investment platforms. Gala Music is a music platform built on Gala Chain and Ethereum. Artists can release their songs on the platform to earn revenue. Each song can be minted into 100 NFTs, known as tracks. These tracks can be paired with nodes, with each node capable of hosting up to 10 tracks. The more a song is played, the greater the rewards for both the node operators and the track holders. This article will provide a detailed analysis of Gala Music based on its operational logic, user experience, economic model, and current development status.

What is Gala Music?

Gala Music is a music platform built on Gala Chain and Ethereum. Gala Chain is a blockchain platform primarily designed for the entertainment and gaming industries, built on Hyperledger Fabric, and uses a deterministic consensus algorithm to reduce the risk of forks. The chain has a founder node network, where these nodes are responsible for network maintenance and security. GALA tokens are distributed daily based on the status of the nodes.

Gala Chain is more focused on the entertainment and gaming industries, providing efficient and secure blockchain solutions tailored for these sectors, while Ethereum offers a more general-purpose and widely applicable blockchain platform. The two differ in their design philosophies, technological applications, and use cases.

Gala Music is an important part of the Gala ecosystem, along with Gala Games and Gala Movies, forming the cornerstone of the Gala ecosystem. Through the Gala Music platform, artists can release their songs and earn revenue. The Gala Music product launched its beta version in 2023, using the BEAMS token. The official version, launched in December of the same year, uses the MUSIC token, with BEAMS convertible to MUSIC at a 1:1 ratio.

The Gala team was founded by Eric Schiermeyer and Michael McCarthy. Eric Schiermeyer is a legendary figure in the gaming industry, having founded Zynga, while Michael McCarthy was the creative director for popular games like Farmville 2. The team consists of over 400 employees. In 2022, Gala established the Music department, and the CEO of Gala Music is Leila Steinberg, who was Tupac Shakur’s first manager.

Gala Music has not yet raised any funding, but the Gala team announced in 2022 plans to invest $5 billion to expand Gala’s Web3 presence, with $1 billion allocated to Music.

User Base

The streaming feature of Gala Music is free for all users, who can also purchase tracks (NFTs minted for specific songs), concert tickets, merchandise, fan meet-and-greet tickets, and other memorabilia on the Gala Music platform. The platform supports multiple digital currencies, including MUSIC, GALA, ETH, and USD.

The current user base of Gala Music can be divided into five categories:

Listeners

Listeners can access curated playlists and play music on the platform. The revenue for artists, nodes, and track holders comes from the music played by listeners.

Fans

Fans can purchase albums, stream songs, and buy performance tickets. In the traditional music industry, artists may not know their fans, but through the Gala Music platform, artists can see their fans. Gala Music actively showcases new tracks and names to an artist’s fan base.

Track Holders

Track holders can host their tracks on Jukebox nodes and earn revenue based on a popularity algorithm set by the platform. To receive earnings, tracks must be played at least ten times a month; otherwise, there may be no earnings.

The platform assigns rarity to tracks based on the order of purchase. When a song is released, the initial number of tracks available is 100. If the song is popular, the next rarity level is unlocked, and the holders of the previous rarity level automatically receive the next version of the track. Both versions of the track can earn token rewards.

Node Operators

Jukebox node owners can share revenue with track holders. Node operators can choose to become hosts for specific communities. Even without hosting tracks, community hosts can earn revenue. A node can host up to 10 tracks, and it must operate for a minimum of 20 hours daily. Node sales come with a bonus track, and the more times a track purchased by the holder is played, the higher the earnings for the node operator.

Source: music.gala.com

According to official data, there are currently about 25,000 active node operators daily.

Artists

Artists are the creators of songs on the Gala Music platform. Their revenue comes from music sales, merchandise sales in the All Access store, pairing and hosting their tracks, and recommending users to visit the Gala Music platform.

Product Features

The functions of the Gala platform are similar to music apps like Spotify and Apple Music, with five main features: Home, Listen, Discover, All Access, and Chart.

Source: music.gala.com

The Home module is the navigation page for users on Gala Music. On this page, Gala Music recommends works from various artists, allowing users to view the latest tracks for sale, newly released music videos, upcoming tracks for sale, the most-played tracks of the day, music event merchandise, and community-curated music playlists.

The Listen module includes features such as playlists, favorite tracks, and recently played music. Users can create their own playlists on this page or find official playlists categorized by music style or individual artists.

The Discover module allows users to find newly launched tracks for sale and tracks that are about to sell out. Typically, a track is available for purchase up to 100 times and follows the ERC1155 standard. Tracks are traded using MUSIC, GALA, ETH, and USD tokens.

The All-Access store is a merchandise store for music-related items, where fans can purchase merchandise, tickets, souvenirs, and more. The token used in the All-Access store is MUSIC. Of the sales revenue, 50% goes to the artist, while the remaining 50% worth of tokens is burned. Fans can hold MUSIC tokens in the Access Pool for specific artists, with the amount and duration of holding increasing their loyalty points. Artists decide how to use these loyalty points.

Source: music.gala.com

The Charts module tracks data on the most popular tracks and artists.

Economic Model

MUSIC is the native token of Gala Music, with a maximum total supply of 1 billion tokens. It is a token on GalaChain but can also be bridged to the Ethereum network. The former testnet token, BEAMS, can be exchanged for MUSIC at a 1:1 ratio, with a conversion volume of up to 75 million tokens.

Source: medium

The MUSIC economic model adopts a dynamic supply mechanism, where the release of tokens is based on the activity parameters of the ecosystem. The goal is for the supply of MUSIC tokens to increase as the platform’s business volume grows. The specific formula takes into account factors such as the amount of song creation, the number of tracks minted, the number of users, and the number of song plays. The general token curve is as follows:

Source: Gala Music Whitepaper

As seen in the chart, as the token supply increases, the number of new tokens generated per minted track (the minting allowance) decreases. This means that during the early development phase, the amount of track minting has a greater impact on the total token supply.

The token rewards allocated to users will be generated daily from a specific minting allocation pool. The minting allocation pool will replenish tokens based on the number of newly minted tracks. To prevent a lack of token generation due to a low user base during the platform’s early stages, the initial minting allocation pool contains 150 million tokens, of which 75 million are from the testnet token BEAMS. If the platform maintains a low user count for a prolonged period, these 150 million tokens will be distributed over approximately four years.

The total daily amount from the minting allocation pool is 0.15%, which will be divided between ecosystem rewards and operational expenses. Each will receive 50% of the allocation. Operational expenses include development costs, marketing, sports events, partnerships, and licensing. Ecosystem rewards distribution includes 35% for jukebox operators, 25% for track holders, 25% for ecosystem participants, 10% for artists, and 5% for founder nodes.

Source: Gala Music Whitepaper

MUSIC can be used for trading and staking to increase loyalty points. Destroying MUSIC can be done through transactions in the All Access store or by tipping artists. 50% of the tokens used in these actions will be burned. The destruction of tokens reduces the supply of MUSIC, ensuring that newly minted tracks can earn a certain amount of revenue.

Current Development Status

According to official data, the top-ranked song on the Gala Music platform currently generates 14.27 token rewards and has accumulated 2,400 plays.

The top five songs are as follows, with daily play counts ranging from 160 to 226, and token earnings ranging from 12 to 23.

Source: music.gala.com

Conclusion

Gala Music is a music platform built on Gala Chain and Ethereum. A song can be released with 100 tracks (NFTs), which can be hosted on nodes to earn revenue. The platform also features the All-Access store for merchandise and ticket sales, where transactions are made using MUSIC tokens. The product functionalities are mostly in place, but in terms of the economic model, Gala Music only rewards node operators and track holders with tokens, not listeners or fans. The rewards for node operators and track holders are determined by the number of plays, but there is no positive feedback loop formed within the economic model. Therefore, the token model’s integration with product business revenue still requires further refinement.