"It Turns Out Music Does Have Value. We've Been Pricing It Incorrectly For 20 Years:" RAC
DJ Andre Anjos, aka RAC, talked to The Defiant about how he's working towards a more decentralized music industry, one experiment at a time.
By:
Hello Defiers! In this week’s interview, we chatted with Grammy Award-winning DJ Andre Anjos, aka RAC. RAC, who makes electronic and dance music, has been involved in crypto in one way or another since 2016. Most recently, he tokenized his latest album and sold it on digital goods market place ZORA. The token, which has the ticker TAPE, is linked to a physical, limited edition cassette tape that token holders can redeem. It was listed for $20 and to everyone’s surprise, especially Andre’s, they tokens shot to over $800 and are now trading at around $200. In 2017 RAC partnered with ConsenSys-backed Ujo Music to put his album Ego on the Ethereum network so that fans could buy copies directly through him, without going through intermediaries.
His very next crypto venture, as he revealed on this podcast for the first time, will likely be to launch his own RAC tokens as a way to reward and incentivize his fans.
Many have seen cryptocurrencies as a way to decentralize the financial system, thanks to the innovation of digital scarcity. RAC says that digital scarcity can also help disrupt the music industry. His experiments have so far showed how distributed networks can be the underlying infrastructure that helps artists can sell their creations directly to fans; how tokens on open markets can help more accurately price goods and help them benefit from secondary trading of their products; and now how digital assets can help strengthen communities.
You’re a paid subscriber, which means you get the full transcript below. Subscribers also get exclusive access to The Defiant’s Discord chat for the community, here’s a new link to join.
🎙Listen to the interview in this week’s podcast episode here:

📺 Also, Watch the New Video on The Defiant’s YouTube Channel!
Check out the just-released video on The Defiant’s YouTube channel! The amazing story of SushiSwap. The video was produced in partnership with Robin Schmidt of Harmony Protocol.
🙌 Together with Perpetual Protocol, which provides decentralized perpetual contracts for any asset, and Zapper, the ultimate hub for managing DeFi assets & liabilities.


Camila Russo: I always start this podcast with the question of how you got into crypto. In your case, it's especially interesting because you're still obviously a full-time artist and musician. You're not working in crypto, but still really interested in it and experimenting with it. I’m really interested to know, what got you into this space and what kind of kept you here?
Andre Anjos , aka RAC: It's always interesting because I think everybody has like their own story. Everybody has that, where did you first hear about Bitcoin story. For me, so just maybe to give a broader perspective. I had always been interested in computer science, so I took a couple courses. I was always very into computers. It's just a part of my life. It goes hand in hand with music production, so it just made sense for me to kind of stay with it.

Especially with distributed networks, I'd always been kind of interested in this and I sort of followed things here and there, I've never worked in that world, but it was something I was just interested in. Naturally, I had heard about Bitcoin at some point, but I didn't have a financial background. It wasn't something that I immediately looked into. I don't even really remember where the first time I heard about it, maybe, I don't know, maybe 2013, 2014, an article or something popping up. I was vaguely familiar with it.
But it really started in late 2016 where, I don't know what led me to it. I think I was just like, okay, maybe now's the time to check it out. I had sort of gotten a little bit more into investing, and I had gotten into stocks and things like that, so I was, trying to become a little more well versed in that. I maybe looked into Bitcoin a bit and I think I had a moment where I realized, oh, the technology behind it is actually really interesting. Without really understanding the financial side of hard money or any of that, I was pretty interested in the technological breakthrough that it was.
Digital Scarcity
Because, in my own experience in music, I had seen that digital scarcity or the lack thereof can wreak havoc. Like when you can infinitely copy music, what that can do to an industry that depends on that sort of scarcity model. I think just from an ideas perspective, I guess, it was interesting, how can you create something is actually provably digitally scarce.
Through digging, I stumbled on this video of Vitalik Buterin talking about, it was probably like some kind of Devcon speech, talking about this idea of taking that Bitcoin blockchain idea but generalizing it to anything and making it programmable.
Again, it wasn't really the money thing, because that wasn't my background. I was, okay, currency is an interesting application of it, but there's so much more to this and so that sent me down a rabbit hole. I was like, okay, who is this? This kid is clearly a genius, let me dig into this. The more I read into it, I was like, oh, there are so many interesting applications for music and really the back end of music, not necessarily on the consumer side.
CR: Like the distribution side?
Music on Ethereum
RAC: Yes, like the distribution, but also the piping of the music industry is filled with middlemen. It's one of the worst. It's actually one of the more obvious examples of, where this disintermediation could actually have a really profound impact. But we have a really entrenched industry that is very resistant to change. I see it as ripe for disruption, I guess and Ethereum seemed like a very logical application of that.
“I see it [music industry] as ripe for disruption, I guess and Ethereum seemed like a very logical application of that.”
As I dug more into it, I kept thinking about all these different applications that you could do. I felt like, surely there are some people that have done something here. That's when I discovered Ujo Music, which was a part of ConsenSys. I reached out to them and I think, this is maybe three or four months before my album was going to come out. I was like, why don't we just try to release this on Ethereum, it could be an interesting project? They had already done one single with Imogen Heap back in the day. I knew as possible, it was just like, okay, let's do this, let's do a full album.
The idea is very simple. It's literally just putting it up on IPFS and basically, set up a smart contract that if people give $10 of Ether to this contract, you get sent an IPFS link and you can download mp3 files or WAV files or something like that.
It's very simple. I mean, this exists, technically, elsewhere iTunes, Bandcamp. There are lots of services that provide this, except that they take a percentage of it. So this was an interesting direct connection type of a thing. So for me, it was more of an experiment. It wasn't exclusive, it wasn't the only place you could get the album.
CR: How did it work out? How many people download it through there?
RAC: I think maybe I want to say in between the 300-500, I'm not entirely sure. So not a lot, but not bad. I wasn't mad about it. But it was, I learned a lot from it and my objective was really to have it be more of an experiment and talking point, basically, so at least to start a conversation about this.
I think 300-500 people maybe, but we very quickly realized that especially for my fan base, which are not crypto natives, I mean, they're savvy, but not like crypto savvy. And having to go through Coinbase to buy Ether to transfer, and at the time we had this it took like a week to get to wire funds into Coinbase. The whole process of getting ether into Metamask and do all this stuff.
To me it was the coolest thing ever. But from a user experience, not that great. I think despite that, it was a great success. I'm really proud of that.
I have this funny memory of it, again, because I remember having a meeting with Spotify and that was like, literally the first thing that they asked me about, it was like, what's this Ethereum thing? What are you doing with that? I was like, “ha-ha.”
“I remember having a meeting with Spotify and that was like, literally the first thing that they asked me about, it was like, what's this Ethereum thing?”

Image source: sing-sing.co
CR: What did they say?
RAC: Oh, no, I think they were just generally interested in it. It was just a friendly thing. It wasn't like, I don't think they're threatened by it. It was more is like what are you doing? What is that?
But I had this other memory of so I was actually in Japan and we were doing a full day of interviews and that type of thing. I had a translator and I felt kind of bad for her, because she had to translate when people kept asking me about Ethereum and trying to talk about Ethereum through a Japanese translator and communicate all this stuff and all these ideas. It was a bit tricky. But again, it was generally, interesting to see the amount of interest around this simple idea. I think it was it was a very successful experiment.
CR: Was it the first time you were able to sell an album in this way directly to your fans without having to go through a middleman? That's pretty remarkable even if you had to have this like bad user experience, it was still kind of a direct contact with them.
RAC: I think it was more about showing that it was possible, and you could extrapolate from there, we could take it up further.
CR: I'm interested to go deeper into what you mentioned about the music industry being so ripe for disruption. Because I think, in DeFi and I think maybe even in crypto in general, you focus a lot on finance and that's kind of the low hanging fruit and that's where you see so many, fees and steps, put in between your transactions with the middlemen.
I don't think a lot of people really think about the music industry as also ripe for disruption with blockchain technology. Most of my listeners won't be as familiar with that industry, so we'd love to hear more about that. Who are these middlemen? How are you losing out because they're there? And how do you think this technology can actually help?
Disrupting the Music Industry
RAC: I feel I could easily spend four hours breaking this down, but I'll try to sort of condense it. But I think, more broadly speaking, basically, every step of the way, there is somebody taking a percentage of gross revenue. Let's talk about streaming. Streaming, right off the bat, there's 30% off the top. Then from there, there's another distributor that takes another 10-15% off the top of that and then that eventually goes to the labels and then you have a label deal. So these were the people that generally fund these projects and so they're taking financial risk by paying to basically make the music and promote it and all that stuff.
They usually take anywhere from like 50-85%. Again, these are pretty wide ranges, there's all kinds of deal structures. Let's say, 50-85% of that gets cut in half and then maybe at that point, it goes to the artist. Then the artist, like if you have a collaborator, or if you have a producer or something like that, that's another percentage that goes to them first.
Then maybe, at one point after all of that is paid back, it eventually goes to the artist. You can start to see, if you just starting to add this stuff up. It's very difficult to make a consistent income on these things. And that's just streaming.
Then if you go to, say publishing, again, maybe for context, every song that is made is split in half. There's what we call the master side, which is the recording and that has certain attributes, has certain rights to it. Then there's the other side, which is the sort of essence of the song and that's what we call publishing. These are like the lyrics, the intangible notes, the music, that's the publishing side. Then that's another thing where at every step of the way, there's somebody taking 50, sometimes have 70% of gross revenue, of all income.
Basically, every dollar that comes in, the artists gets paid last. And they end up getting, maybe, I want to say just roughly 15 to 20% on a good day.
“The artists gets paid last. And they end up getting, maybe, I want to say just roughly 15 to 20% on a good day.”
CR: Oh, that’s interesting. But is it, for example, for writing my book, I got an advance and then I'm supposed to, if I paid back that advance, then I start earning a small percentage of sales? Does it work that way, are you able to get an advance from publishers?
RAC: Yes. It's probably very similar. By the way, the book is great. I haven't finished yet but it's great so far.
I imagine it's somewhat similar. I don't know exactly how the deals are structured in the publishing industry, but it is similar. It's like where they’re giving an advance in exchange for ownership over the asset, over the album. But the wording is tricky. This is where the music industry, they get very creative with their language and the contracts. They're like, okay, we'll take 50% of the master. But that's only 50% after all these other people take their cut. It's creative wordplay that makes you feel like you're getting a lot more, but it's not really.
With the advanced, specifically, there's one kind of game that the music industry loves to play. Which is, they say, it's a recoupable advance and we split it 50/50. But it's not actually really 50/50, so you pay back this loan at a 50% rate. I don't know how this works in the publishing industry or in the book publishing industry. But basically, let's say they give you $100,000 up front, but you only pay that back at a 50% rate, so the album has to earn $200,000 to actually be paid back.
I mean, again, to be fair to them, they're taking financial risk, they're putting resources into it. You don't have to pay it back. They front you a lot of money and you don't have to pay it back. I don't want to paint the entire industry as this evil corporation. It's a lot more nuanced than that. But I think, we've sort of been in this… Basically, the music industry in the 50s essentially started as like, basically by the mob.
CR: Seriously?
RAC: Seriously. You look back, people will argue with that, but basically the deals were so advantageous to the industry side that we sort of been chipping away at it over the years that we were at a point where it's a lot better. Artists have a lot more power now, but it's still very lopsided.
I feel like I've been talking complaining about the music industry for a while. But basically, where crypto comes into this, is that this is an entrenched industry, they control 80% of music. If you want to create a platform, you have to play ball with them, you just can't, due to copyright laws, and they just control the industry. It's very difficult to work with them and actually get a fair deal, basically. That's what I mean, I think it's ripe for disruption through technology they can't control.
“I think it's ripe for disruption through technology they can't control.”
There's a lot of these back end systems where it's like, well, why do we need distribution fees? That's sort of a legacy part of the industry where people maybe, when you manufacture CDs or vinyl or whatever, there was a cost there and maybe that warranted taking a percentage out. Or they negotiated rates with Walmart, it’s like have your CD upfront, things like that. That was maybe where distribution had a role, but these days, it's less so. It's a different model now.
Alternate System
We're still kind of coming out of that late 90s era, and still slowly adapting to the modern age. When I first got into crypto, it just made sense to, well, we can build an alternate system where we just bypass all this stuff.
Why do we need all of this? If we can sort of create the data structure basically to support it and it's all open and people can build applications on top of it. We can sort of build that underlying infrastructure that's fair and then we can let an actual free market flourish, because we currently don't have that.
“We can sort of build that underlying infrastructure that's fair and then we can let an actual free market flourish, because we currently don't have that.”
CR: How would this system actually work?
RAC: I can't say that I have all of this figured out by any means. There are a lot smarter people than me working on this that are working very hard to solve a lot of these problems. But basically, in its essence, kind of what I said is like opening it up to a free market, where if you have the data structure, like the ownership, maybe the files, if you have all of this in a containerized format, maybe a mix of Ethereum for the smart contract layer, if you will, and then IPFS for the data. I could see a situation where people, if you have that open-sourced and available to all, I could see a situation where you could see other applications built on top of it and you could build a more fair, decentralized Spotify streaming service on top of it.
There are a lot of people that are already kind of doing this. But I think the main idea is a shared open-source infrastructure underlying, let's fix that first. This is one of the things that Ujo was really trying to work on. Then from there, then we can start to talk about like the consumer layer stuff. But we were still not even remotely close to that.
“But I think the main idea is like shared open-source infrastructure underlying, let's fix that first.”
CR: It's interesting, because now, we're starting to get to the point you made earlier about digital scarcity. Because I think, that’s the big difference of with having this technology, is that before you could have that peer to peer community, or structures for sharing and downloading music. But the problem was that it was really hard for artists to monetize that and music was able to get infinitely reproduced and artists would get nothing. But now, we have a solution with scarce digital assets.
It does seem like the solution should be there somewhere, creating this open protocol for fans to buy their artist’s music and for artists to get properly compensated and to cut down middlemen wherever it makes sense. Sometimes it does make sense to have someone who can put money up and they invest in you and they deserve a cut, but so many others maybe don't and are just making the process worse.
DAOs Replacing Music Labels
RAC: Yes, there's definitely a role for labels and labels get sort of like a bad rep, but I actually think they do add a lot of value many times. If we're talking about labels as purely as a funding mechanism, I think there's a lot of room for crowdfunding, that type of thing, for even your fans to get involved in that.
CR: Personal tokens for instance.
RAC: There's all kinds of avenues to do this. It's going to get really interesting, like when you apply market dynamics to this, because, especially with all these DAOs. I could see a sort of “label DAO” type of situation where people start a DAO for releasing music and then people could pull capital and pay for these basic costs in exchange for a certain amount of ownership.
“People could start a DAO for releasing music and pull capital and pay for these basic costs in exchange for a certain amount of ownership.”
But again, opening that to a market as opposed to sort of being at the mercy of some companies that are quite aggressive in that. It democratizes it in a really interesting way. I'm really interested to see where this goes in the next while.
CR: I should maybe, modify what I said maybe it doesn't completely get rid of middlemen, but it does completely change who those middlemen should be and just democratizes middlemen as well. Now instead of a label, you get a DAO or something.
RAC: I think that's all we're asking for is a free market. We just don't have that.
“All we're asking for is a free market. We just don't have that.”
CR: I know you released your album Ego right with Ujo. Then from there, so that was like 2017, middle of the bull market, but then the 2018 came and how did that progress your involvement with crypto?
“In It For The Tech”
RAC: That was a really interesting time, maybe because my interest really lied more in the technology. I think a lot of people say that, it's like, oh, “I'm only in it for the tech.” Of course, it's two-sided. But what I will say is, maybe I was interested in both sides, but the tech is really what kept me going, especially when everything's falling apart.
In seeing the amount of developers really continue to create and, I mean, things definitely got shaken up for sure. Through Ujo, I was basically loosely involved in ConsenSys and obviously, there's all kinds of things kind of got shaken up there. I was deeply involved but I kind of got to be a fly on the wall and kind of see that take shape. A lot of people left, a lot of people moved to other projects and things like that.
But for the most part, people kept building and I think that's what really kept me interested in it. I already knew about Maker DAO and other projects. I saw what they were doing, synthetic assets, and I became a little more interested in the financial side of it. I guess, Uniswap came about and I think, not to discredit Hayden or anything like that, but I think Vitalik posted this original idea, we don't really need orderbook, decentralized exchanges, we can just do AMMs.
It was and then seeing that flourish and despite the price fluctuating and people trading and whatever, I saw a lot of development continue and that kept me really interested in it. It seemed like, I mean, there were definitely moments where it's like, oh, is this really all falling apart now? That's a bummer.
CR: Like ETH below 100…
RAC: I know, It's a little sad. But then again, it was also the fact that people kept building on it was like, that to me showed that this was actually quite resilient. I think there were a lot of moments in ETH’s history that maybe there were things that are a little shaky, where it really was in question, but I think we're kind of beyond past that at this point, where just the amount of developers that are building really interesting projects and obviously, everything now is a little heightened compared to that.
But at the time in 2018-2019, well, I think, December of 2018, Arthur Hayes celebrating sub-100 ETH or whatever, is okay, dude, whatever, it's sort of short-sighted. There's sort of people that only care about the price and I think that was kind of boring to me, but I saw these people like continuing to build really interesting projects.
CR: Were you just watching it from the sidelines, or were you somehow involved in all this development?
RAC: I've kind of loosely stayed involved in a sense, actually, I had technically joined the Ujo team on a part-time basis for basically a year and a half, I was involved in that. The project, unfortunately, went through a lot of shakeups within ConsenSys and kind of fizzled out, so like my involvement also kind of ended there. Then more recently, I actually just joined as an advisor for Audius, which is, to me feels like a bit of a spiritual successor.
CR: Also at ConsenSys?
RAC: No. It's a separate project. But I think, sort of benefiting from a lot of the ideas that Ujo built and worked on and, I mean, it's different. But I think they solved a lot of the user experience types of issues. They really leaned into that where, I don't know, so much of this stuff is timing. Ujo, I think, maybe, there were just a little too early, unfortunately.
But anyway, my direct involvement was kind of waned a little bit, like I kind of watched it from the sidelines basically. I was still playing around with different DeFi projects before they were called DeFi. I was definitely interested and I definitely followed a lot of development. I just watched a lot of projects crumble, a lot of ETH killers completely fizzle out.
I did kind of explore a couple of projects with like, tokenizing publishing assets on Ethereum, explored some of that. We kind of realized there's still a lot of infrastructure stuff that needs to be placed before we even start to explore that. My interest definitely stayed, but always from the sidelines.
$TAPE
CR: This year has been an explosion again of activity, price started to rise, DeFi is just blowing up right now. You also kind of were, front and center in DeFi with your own project. I'd love to hear how that came about.
RAC: I assume you're talking about TAPE. This kind of landed on my lap a little bit. Backtracking to the Ujo days, we talked a lot about tokenizing assets or physical products, merchandise of some sort. But we ran into the same issues of UX and how do we make this easy for my typical fans to interact with this. It's kind of a big problem.

Image source: ourzora.com
One of the guys from Ujo introduced me to Jacob from Zora. Jacob had sort of done this project called Saint Fame, which was just basically, I think the world's first internet fashion house or something like that. I think that's how they framed it. It's a really interesting project actually. But it was basically the precursor to Zora.
We started to talk about, what could we do, you know, around the album? What could we tokenize, essentially? You know, taking a little bit about this sort of drop culture from sneaker culture, that type of thing, create very scarce limited edition goods and tokenize them and open them up to a market.
This was always interesting to me, but it's like, how do you really make that connection to a physical product? The way that they solve that and this is not purely decentralized, obviously, because you still have to trust the organization that's launching it to deliver the product to you. But they solved it in a really interesting way, which is that they open it up to a market first and then later down the line, like couple months later, then you can redeem it, effectively burning the token and then the organization mails you the product.
For me, it was taking this idea of a free market, of opening up a very niche product like a cassette tape. It's a cassette tape in 2020, it's very niche, it's a collector's thing.
“For me, it was taking this idea of a free market, of opening up a very niche product like a cassette tape. It's a cassette tape in 2020, it's very niche, it's a collector's thing.”

Image source: ourzora.com
For me specifically, I wasn't going to do it anyway, I wasn't going to make a tape anyway. I was like, why don't we just make a very limited edition thing in again, like an experiment and sort of a conversation piece and just see what happens. Of course, DeFi, I don't know, like…
CR: DeFi defied.
RAC: The Chads rolled with it, and maybe before they were called Chads, I don't know. I didn't know how to price it and I think that was the idea. I was like, what is this worth? I don't know. We price it at $20 and I wasn't sure where it was going to go. I thought maybe $60-80, something like that, it feels kind of ridiculous to pay more than that. But it went from, I think $20, all the way up to $950 or something like that and then all the way back down. We had our own little bubble, and I think today, maybe it’s going for $220-$240 something of that. I haven't checked in a couple of days.
But what it proves to me is that when you apply market dynamics to something like this, price discovery, love it or hate it is a great way to find the value of something. I guess what the market is saying is that this tape is worth $240.
“But what it proves to me is that when you apply market dynamics to something like this, price discovery, love it or hate it is a great way to find the value of something.”
CR: That’s so crazy.
RAC: I couldn't have guessed that. I couldn't have priced that. If I came out of the gate and said, oh, I'm selling this cassette for $240, people will be like, you're insane. What are you doing? But, hey, I didn't decide this…
CR: The market decided.
RAC: The market decided. The one thing I love to say about this is, turns out music does have value. We've been pricing it incorrectly for 20 years and I think it's about time we apply a free market to music and then we can actually be paid appropriately.
“The one thing I love to say about this is, turns out music does have value. We've been pricing it incorrectly for 20 years and I think it's about time we apply a free market to music and then we can actually be paid appropriately.”
CR: It's such an interesting experiment. First, I want to understand the mechanics of what happens now. At what point do you start delivering the tapes? Or do you have them physically with you? Also, where can you play these, the first time I saw this, it's like, okay, you buy this cassette and then what?
RAC: Well, I mean, some people still have older cars with cassette players, maybe it works there. I mean, to be completely honest, this is more of a collector's thing. It's not so much about the listening experience. Although I will say I have a cassette player, I bought one and the tapes actually sound pretty good. It doesn't sound that bad.
Anyway, so what happens now is I think in the next couple of weeks, if I'm correct, we basically got a little bit delayed due to COVID and had some manufacturing bottlenecks, so we would have opened it up earlier. But basically, redemptions are going to open, people burn the tokens, they go out of circulation. People can continue to trade it, I think for a year and we're just going to ship them out to people that redeem them and then they have the cassette and they can do whatever they want with it. They can put it in safe and they can sell it, I don't know.
CR: How much of the value of the TAPE token are you getting?
RAC: This is where it gets a little bit tricky and so I think my understanding of it is sound. But basically, I think I'm the market maker, so I collect 0.3% of the trading fees because it was a Uniswap pool. We actually did switch to Zora pools now, which are a little more are kind of like Curve pools where they're not so steep. Prices don't fluctuate as wildly now. That's sort of something, that was still kind of a learning that, because the price fluctuated so wildly, it's not really what we're going for. So I collect trading fees.
Again, I think this is an innovation on all accounts, because, for example, let's say the Kanye Yeezy example. He releases his shoes or whatever, and he sells them for $400. They're immediately on the secondary market for $1,500, so he doesn't get to collect on any of that. But in this model, you get to collect a percentage of every trade. I think that's fair.
This way, the creator has some upside in that and people can speculate all they want. If I understand correctly, I collected maybe on the first tokens that were sold and then from there I collect on trading fees. I have upside, for example, if somebody sold at $950, that's not me selling at $950, it's like people selling against each other basically.
CR: How many tokens did you sell of the total supply right away and is that the amount you got or were you kind of issuing, like selling them through different periods of time?
RAC: That's my understanding, is that all the tokens suddenly sold out, but now, they're being traded among people, basically. So the tokens have been traded back into the market for profit. And then that just cycles through the market basically.
CR: Maybe it would make sense for artists to keep a small percentage of their token so they can also share the upside in case the price of the token itself increases?
RAC: You could do that. Well, we disclosed this, but I personally got three tokens just because I wanted to have some copies for myself. I actually will be redeeming them. In the Zora team, I think maybe got one, but again, it was also they're not going to be trading it, they don't want to be involved in the market. I think my manager got one. We were allocated five, but again, we just want the actual cassettes and that's it. And everything else is just traded on the market as far as I understand it.
CR: What else did you learn about this experience? Would you do it again? What would you change?
RAC: We have plans to do other stuff. I feel like I maybe benefited from being the first and it was making a splash. It's an interesting idea. A lot of crypto Twitter definitely ran with it which was funny to me. Because, all these people that I followed and were talking about it, and I was like, oh, that's fun.
I’ll definitely like to expand on it. I think this is an interesting model moving forward to release merch, and just sort of democratize that sort of drop culture for other things. We don't make limited goods very often and we price them incorrectly. When I do like limited edition, vinyl, I just price it, maybe 10% or 20% above the regular vinyl, but I don't know if that's really the way to go in the future, so I could see, I like this idea of applying markets to physical goods. I think it's interesting.
Then also, just in a way my audience, if they're savvy, they can kind of benefit from trading it too. It's just really interesting.
Music Farming
I guess I can maybe talk about it a little bit. This is kind of ongoing. We haven't really made a formal announcement or anything, but we're sort of exploring ideas around community tokens and maybe incentivizing people or like rewarding people that participate in these projects with another token where, maybe they get early access or discounts on other merch.
CR: Music farming?!
RAC: It's taking like some of those ideas. I guess like with going into yield farming, I guess, we inevitably talk about that. But I like the idea of incentivizing people and, I think one of the things that's happening right now with yield farming, you're incentivizing like a lot of people to provide liquidity, but these people are not so vested in your project necessarily. In a way, I want to reward my fans basically. I'm kind of thinking of ways to you know, for example, I have a Patreon, it’s like, what if I rewarded my Patreon supporters or my Twitch subscribers and maybe that gives you access to my Discord? Or things like that.

Image source: twitch.tv
CR: With like an RAC token?
RAC: That's the idea, something like that. It's less about like, I'm not going to be like, everybody in the yCurve pool gets RAC tokens. That’s not what I'm saying. That's not really the crowd I’m going after. But, I mean, it's essentially a rewards program when it really comes down to it, so I'm interested in exploring that.
I don't know, we'll see where that goes. But again, it's sort of has to have like an easy user experience, obviously, if we're dealing with Patreon and other services, it has to be a centralized thing. But I think I like the idea of incentivizing people to do things, rewarding people for doing things that benefit me to some extent. There are some dynamics there that really need to be worked out. But like in principle, I love that idea.
“We're sort of exploring ideas around community tokens and maybe incentivizing people or like rewarding people that participate in these projects with another token”
Just more broadly speaking, this is something I've been thinking about a lot. Like there's an argument that I like to make. It's like okay, for argument's sake, I create music, let's say that that has value, right? Let's not put a dollar amount on it because I don't know what that dollar amount is. I think we can agree that what I do have some value, right, like I think that's fair. But the only way currently for me to tap into that value is to partner with these companies that take a large percentage of it. The only way for me to tap into that value is to basically partner with these kind of aggressive companies that take a very large percentage of my income.
I've been thinking a lot about ways of, how do I tap into that value in a way that rewards, how do we create an ecosystem that rewards the people involved? There's sort of a lot of ideas that I'm playing with, I don't want to call this DeFi, but like, it's sort of applying some of those ideas. How do I apply that to my world and how does that make sense for me?
I really like this even with like Andre Cronje and I don't know how to pronounce his name, but like with YFI and like all these different projects with like just dropping it to your community and people that actually want to use it and might be interested in it. I think that was a really powerful idea. It's really interesting to see all these other projects that had VCs and like other stuff be like oh, this kind of changed the game now. Now we really have to appease the community, otherwise everybody's going to sell our tokens
“All these other projects that had VCs and like other stuff be like oh, this kind of changed the game now. Now we really have to appease the community.”
CR: Or fork it.
RAC: Exactly. Like even with like Swerve and Curve and all this stuff.
CR: I know, it's insane. But it's so interesting to see how all these mechanisms can be used outside of finance potentially and we'll be super interested to see what you come up with and how this can be used in the music industry and in other industries. I think it's super interesting.
Because I think, if we've learned one thing so far is that these rewards and incentives are incredibly powerful. A big part of it is they want to make money, but I think it's also a lot about coalescing around this community and being part of an inside joke with the memes and understanding what people are talking about in this tiny bubble. It's fun. In the end, it's a fun thing that's going on.
RAC: No, I think the community aspect of it, I mean, especially when we're talking about forks, like you can't really fork a community, right? Like that's one of the really interesting side effects of some of these projects that are popping up like YAM and BASE and all these things. The memes are, people just rallying around these memes and it's kind of becoming these games.
I mean, obviously, there's financial incentives involved, but it's actually really interesting in light of COVID and all these things. People are finding that these smaller communities are actually much more enjoyable than just yelling into Twitter all day.
“People are finding that these smaller communities are actually much more enjoyable than just yelling into Twitter all day.”
I'm really interested in these smaller, Discord, tech communities. It's really interesting. In my own experience, I've sort of had a community grow on Discord around my streams and Patreon and all this stuff, and it's been a really powerful thing.
For example, I knew that my fan base was out there, like my monthly listeners on Spotify are pretty solid, pretty consistent, so I knew that these people are out there. But they didn't really interact with each other. Now that everybody's like in Twitch chat or in Discord and they're sharing memes and sharing cat photos and talking about what food they made that night and they're finding this common ground that is very, very powerful. I'm very interested to see where this goes. Because maybe my music was sort of the catalyst that brought people together, but the people are staying for a reason. I don't think it's because of me.
In this way, talking about tokens, if we create a community token, where like it's a shared thing, it becomes less about me and becomes more about the community. I think that's really interesting, I don't know where this is going, but I'm very excited about it.
CR: Do you think that your fan base who was not into crypto can come into this and maybe come through the Discord chat and if they're airdropped RAC token through there? I mean, do you see that as maybe a potential gateway for non-crypto users to start interacting with this technology?
Gateway for Non-Crypto Users
RAC: Absolutely. That is maybe a little bit of a goal of mine, because I feel like the more people kind of interact with this stuff, they can see this is really cool, actually, even for the non- financial applications, and then, I haven't even talked about NFT's or any of that, like it can get pretty interesting.
But basically, I think a way to make this practical today is maybe perhaps, like a web 2.0 wallet that can interface with an email login that can interface with web 3.0 if you want, but not make it a requirement, so people can have the tokens do whatever they want with them and can move them to Uniswap and sell them, whatever, do all that stuff.
There's a lot of interesting applications, but I do want to make this very easy, as easy as a login, for the non-crypto audience, because at the end of the day, that's actually who I'm trying to reward here. That's who I want to bring into this basically.
CR: Do you think, are the tools there to do that?
RAC: There are. I don't want to be too specific because we're still kind of working stuff out. In between, like Zora and like a couple other applications, I think we can do it. And I mean that I think at first, this is definitely going to be ver simple, start very small and just kind of experiment with it and just see where it goes. But I don't want to jump into this and have some massive grand plan and then nobody's interested. I'd rather start small and just see what happens. I think that's a healthier way to get it going.
CR: Speaking of, you're non-crypto fan base and just like mainstream users in general and you being kind of with one step in crypto and one step kind of in your own industry, what's your take in all the craziness in DeFi? We've talked a bit about these communities forming around meme coins, but I don't know if it's getting new people into DeFi or turning them away. I don't know what it's doing to the mainstream people. Because it can sound a little scammy or scary or just like completely crazy. What's your take?
RAC: I think, it's kind of everything. This is actually one thing I like about crypto, is that it brings everything, it brings the really interesting high-quality cool projects and then also brings like Pasta and Spring Roll and Shroom and all these food-based meme coins, which some of them, I mean it's funny. Because like when SushiSwap launched, people were like, oh, it's just another scam coin, but then you look into, and it’s like, oh they have 72% of Uniswap liquidity locked in their contracts. Oh, this is what's going on here.
Anyway, people have theorized about stealing liquidity from different protocols, but it's fascinating stuff. But I guess that's one thing that I personally like about it, but how it's perceived on a mainstream, that is obviously concerning. Because I'm into this stuff and talking with my friends, it’s like you stick it in Cream and the Shrimp tokens and like all these like weird food-based, like YAM, and it's ridiculous to outsiders. But then again, I think that's actually a way to obfuscate some of the interesting stuff that’s happening.
I think, to give YAM a little bit of credit, I mean, obviously, there are some problems, to put it lightly. But like this idea of coalescing around bootstrapping a group of people and then literally figuring out what you're going to do with it later on. I think is a kind of fascinating. Let's just get together, we're all in this together, we're financially vested in it to some degree. Let's see what we can do with this.
But I feel bad for people buying into it. I feel like there's a lot of good stuff and there's a lot of bad stuff and it's all at the same time and it's up to the individual to sort of siphon through it. That's what happened in the ICO era. There were a lot of ICOs that were actually very high quality and delivered on their promises and that was great, but there's a whole lot of scams too. I will say about DeFi, none of my normie fans or friends know anything about it. Even people from 2017 that were in a crypto are like, what? To some degree, I feel like this is sort of like an internal bubble. I mean, that's just sort of my impression. I don't know. I haven't gotten that high school friend that's like, tell me about DeFi, that hasn't happened and that definitely happened in 2017.
CR:You're right. Maybe this kind of high complexity and high craziness of it all is kind of insulating this DeFi bubble, just keeping it within more like DeFi, crypto natives, which I think with everything that's going on, it might be a good thing for now. I’m all for mainstream adoption, but not sure if I want just my mom playing with all this stuff or my dad.
RAC: The few people that I've even asked me about it, I've been pretty upfront. Unless you're willing to really spend the time to dig into, this is probably not worth your time.
CR: Obviously, there are DeFi different protocols that I think are good, safe enough for mainstream, but not all these like food yield mining stuff.
RAC: Well, I even mentioned this on a tweet recently, but there's actually a podcast, Eric Vorhees, he's like crypto OG, I’m sure, you know him. But he did this podcast for Bankless and he had his analogy that I really liked and I keep talking about this. But of basically, crypto is sort of like an organism and I think he talks about it as a forest where there's a lot of really good projects and there's a lot of really bad projects and some grow and some die and some of the ideas permeate and they're iterated on and all these different projects, learn from that and be like, okay, well, that didn't work, let me try this. Maybe this will work and then that doesn't work, and then maybe finally, we get like a good quality project that learns from all these other ones. That is actually what we end up using. I love that idea and that's sort of how I think about it and that's why I'm not so critical of a lot of these kind of garbage projects.
CR: I guess, we’ll learn from them.
RAC: That's my hope,I try to look at it from the bright side and be like, okay, well, what can we learn from this? What can we take out of it? I just find it endlessly fascinating. I feel like every day, there's like a new project, it was like, whoa, I didn't even think about that.
CR: It's crazy.
RAC: Specifically, it was Swerve lately, or yesterday or something like, they were just like, we're going to make the same exact thing as Curve, but cut out literally everybody except the liquidity providers. I mean, there was someone saying that in 2017 everyone was saying we'll just fork your project and take the token out. Now, it's the opposite. We'll fork the project and add a token and give it to everybody that's involved.
I don't know, maybe the sweet spot is somewhere in the middle. But again, I think the community is hard to fork, the team is hard to fork. I think we're going to learn a lot from these and all the stuff that's happening with Alameda and trying to get Sushi to move over to Serum, there’s this combative stuff, is fascinating.
CR: It’s like soap opera. All these power plays coming into it as well. There's definitely this trend of if you're not providing as much value to the community and to users as possible, we’ll fork you and create a token that delivers that value. That happened to Uniswap, that’s happening with Curve. It's fascinating.
It's similar to what might happen to the music industry. There's this industry that is not providing all the value that it could to creators. Creators like yourself might fork it and do it on like an open space.
I love all this stuff that we talked about, it just really kind of blows my mind where all these new paradigms that we might start seeing. Because we talked about music distributed in an open network, right, but also another way to monetize creators with these tokens that enable kind of a real market discovery of what they are valued. We talked about how DAOs even can play a part in this. It's fascinating and obviously, it's amazing to see you kind of experimenting with all these things and seeing where it goes.
RAC: No, I'm legitimately always just really excited to wake up and look at Twitter and see what happens because like every day, there's like some new thing happening and gives me more ideas for like other things to build and it's such an exciting time.
I realize that I am a little bit of an outsider, but I'm also just like, now I'm basically trying to watch it and learn from it and just try to apply it to my own world and hopefully show other artists there's value here and that you can take control over your own career in a way that you really couldn't before. I'm just trying to accelerate that.
CR: Awesome. I really hope more people outside of crypto or working in crypto can start using these tools. I don't think really, you're an outsider, you're experimenting with this stuff as much as anyone. It's like you have one foot in another industry and hopefully, more people will start kind of putting their foot into crypto as well.
So great, Andre, really, I need to start wrapping up, but such an interesting conversation. Thank you so much again.
RAC: Thank you so much for having me. I appreciate it. I got to finish your book, but it's been awesome so far. So thank you for that.
CR: Awesome. Great to hear and I'll be looking forward to that RAC token.
RAC: You’ll be the first to hear. I guess, I pre-announced it here. But no, we're still, it's an idea for now, but we're kind of exploring it. Thank you for having me.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.
About the founder: I’m Camila Russo, author of The Infinite Machine, the first book on the history of Ethereum. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.
