How NFTs, social tokens, and interdependence can add value to artists

In this piece, George Howard chats with musician, technologist, and editor Mat Dryhurst, taking deep dive into how the NFTs and Social Tokens can be integrated into the music industry creating new opportunites and more fairness for all stakeholders.

Guest post by George Howard from Forbes

I’ve known and been inspired by Mat Dryhurst for a number of years now. We met years ago in Berlin when we were both working on a decentralized music platform. In Mat, I recognized a kindred spirit: a musician (he releases albums with Holly Herndon; their albums ‘Proto’ and ‘Platform’ (4AD) have been met with international critical acclaim), technologist (his research focuses on technical and ethical protocols) and educator (NYU’s Clive Davis Institute of Recorded Music, Strelka Institute and European Graduate School).

Mat was one of the earliest of adopters in what is now referred to as the NFT/Social Token space. We’ve shared conversations and ideas over the years, and Mat was recently kind enough to Zoom into my Blockchain + Music at Berklee; the insights Mat brought to that conversation inspired me to dive deeper, and hence, this conversation, which has been lightly edited.

George: I’ve long been inspired by you and your work, and the time you spent joining the Berklee class a few weeks back really blew my mind. Thank you again for that. 

Mat: Cheers George! Really happy to chat with you about this stuff, I really enjoy our exchanges and still feel like stuff we were thinking on a few years back is due its day in the sun.

“it’s unrealistic for people to think that their fans can subscribe to a million Substacks/Patreons/etc.”

G: Agreed. Let me start big: Your notion of Guilds and how they are the logical / best case way forward in terms of confronting the axiomatic disequilibrium around a “Substack”/‘Patreon” existence — that is: it’s unrealistic for people to think that their fans can subscribe to a million Substacks/Patreons/etc. — and so, we’ll revert to a more traditional publisher/label dynamic, but, one hopes, this time, via your Guild approach combined with some of the emerging Blockchain tech like NFTs and social tokens we can do it differently this time.

M: Yes, well I came to Guilds as a research topic through spending time in Hamburg and learning of the history of the Hanseatic League — “Hanse” translates to “Guild” — which was an odd kind of splinter civilisation that dominated Baltic trade for three centuries. In fact once you are aware of it, you can’t unsee it. They had their own internal taxation system and architectural style, all based upon the principle of decentralized artisans establishing trade agreements together as fortification from the excesses of feudal power. 

G: Yeah, it’s sort of solipsistic to think that we’ve invented the idea of decentralization, right? I mean, these are not new ideas, but it’s more about how can we stop making the same mistakes over and over, right?

M: Perhaps the current internet is not that bad, however I think there are some lessons to be learned there. In its current state, the internet can largely be characterized as a place where a very few people in charge of very few platforms dictate conditions and agreements for a great many atomized people. This emphasis on creator independence, or giving individuals tools to self publish and promote, has brought with it many benefits, however, as we discussed previously, I believe there to be a real ceiling on the heavily individuated approaches of places like Patreon or substack. 

G: Yes, exactly…. on both points. Both Web 1 — sort of taking the offline and skeuomorphically rendering it online, was consolidated by Amazon and Netflix — while Web 2 — platforms and UGC have been consolidated by Facebook — and the attempts at bypassing these structures — you refer to it as the “independence economy” — has led to inefficiency and redundancy and, I think, ultimately consumer/subscription fatigue.

M: Yes, the independence economy is littered with redundancy. We don’t really need 100 podcasts or newsletters discussing the same issue from a minutely different perspective – that is what editorial is for. The independence economy also prioritises those who can best promote themselves, or perhaps create the most eye catching content (quality or social cohesion be damned) which is a very different skill to being a good journalist or musician.

I, for example, don’t feel like the reporter on the ground covering famine in Yemen is best served spending time thinking about self promotion, and certainly do not think that the musician who spends most of their time thinking of ways to grab people’s attention is best tooled to create the best music. 

“we’re doing artists a disservice preaching this DIY über alles approach”

G: Right, right! I’ve been saying forever that we’re doing artists a disservice preaching this DIY über alles approach; there’s tremendous opportunity cost. You cannot be both a great musician and business person at the same time; you can be good at both, but not great. On the other hand, you do not need a label or whatever, you need a small team.

M: Yes, and on the user side, there is also a ceiling of finances and attention. Who has time or money to consume 100 substacks a month? The redundancy question, and lack of coordination between different creators to divide up responsibilities and admin, I think also eventually exhausts the medium and ultimately the audience.

When journalism, or music, is in constant attention grabbing mode, and that is compounded by everyone doing it, I think inevitably people switch off. I certainly do. 

“I see artists beginning to revolt against what I call “marketing theater”

G: There’s a certain degree of paralysis from this paradox of choice. And I see it; I see artists beginning to revolt against what I call “marketing theater”; or vanity metrics. Artists are more than our IG followers. So what do we do?

M: So what makes sense is to build new institutions from the rubble of the independence economy, which looks like reimagining very useful organizations like the newspaper or the record label from the bottom up, based upon agreements between previously atomized creators.

G: Hell yeah!

“as a transition to an “interdependence economy”

M: I would refer to this as a transition to an “interdependence economy,” which feels like a positive development from the experiment of the independence economy in the 2010s. I’m particularly interested in web3, DAOs and smart contract infrastructure as new tools to assist making this happen. The new institution can look like fluid agreements and coordination between decentralized participants enshrined in code. 

G: Ok, a bunch to unpack there. First, shout out to your excellent podcast, Interdependence, in which you explore a lot of this; can you talk a bit about it:

M: Interdependence is a project we started during lockdown. We had wanted to do it before, but the touring schedule was a killer. The basic idea is that Holly and I are making our research process transparent by having long form discussions with people who we feel are shaping 21st century culture. The approach is high level but casual, and there is a balance of us having candid discussions with decision makers at the top of fields of AI, web3 and the entertainment industry, as well as just really interesting artists and researchers whose work we think is special. 

The concept is something I came up with initially to critique the common romance associated with independent music, which has in my lifetime evolved from something one might associate with smaller music subcultures to now being arguably the dominant perspective of the dominant companies on earth.

“the most remarkable thing about independent music was the interdependence of it all”

I found that despite the common interpretation of independent music being about special individuals unencumbered by institutions, in actuality the most remarkable thing about independent music was the interdependence of it all. What I fell in love with was Interdependent Music…. its just no-one thought to call it that.

The fact that entirely new global networks and economies were spawned by fair agreements between musicians, designers, and organisers. The individual is truly more independent under an interdependent regime, with a network of people who have their back, or an audience of people who cover their expenses.

I often joke that the independence economy one might associate with the platform era is better characterised as an isolation economy.

Interdependence, to that end, also ends up being a pretty useful device to look at issues of data rights (Glen Weyl started to use the term as he rightly points out that all data is interdependent), and also ideal future scenarios for machine learning, web3, the entertainment industry and other areas, and I guess that is a thread that ties the podcast together too. 

G: I love that so much, and that concept of networks and fair agreements does bring us, I think, ultimately to DAOs. And that notion of a thread that ties it all together; that’s sort of what Web3 is all about right?

As I said earlier, Web1 was really taking offline activities — mostly shopping — and putting it online; Web2 was sort of the platform economy.

My thesis with respect to Web3 is that there’s a straight line from Satoshi’s Whitepaper to the infrastructure that was built because of the liquidity/hype cycle during the first Crypto bubble, and that when it burst in late 2017, it washed out a lot of the non-value adding opportunists, and those who remained sort of quietly built, and, of course, Moore’s law sped things up, and around early 2020 we start seeing the “picks and shovel” entities of the DeFi apps, and then — and I actually think the turning point moment was Travis Scott’s Fortnite “collision, which I wrote about — this led to what we’re now living in — NFTs and Creator Coins — and these will combine and essentially be the liquidity for the Metaverse, and this is essentially Web3. But maybe you could provide some examples from your own work around this to unpack it.

M: Basically my wife Holly and I have an art practice together. We like to tinker with new technologies, figure out how we feel about them, and integrate them into artworks and pieces of music. As things have worked so far, those experiments and artworks are collated together into an album of music every couple of years, which we then tour the world with. We started out as live musicians, that is where every project inevitably ends up, and we are fortunate to have a great relationships with a label like 4AD who support our rabbit holing.

For our last record (PROTO) we concentrated quite heavily on machine learning, as that was Holly’s doctoral research topic at Stanford, and so for the record we developed a singing neural network trained on Holly’s voice and the voice of a vocal ensemble we put together in Berlin. We then made an album and stage performance based upon many of the principles we came to see as important and perhaps missing from often kitsch 20th (or 19th even) century narratives about AI and its role in art and life. 

We both teach in academia, and try our best to have a direct impact on the issues we care about, which we find only really comes from full immersion and getting our hands dirty. One benefit of approaching subjects from the realm of the arts is that perhaps we have more license to pry and speculate than others do, so we try to make the most of that liberty. 

G: Ok, amazing, and also exactly why I teach. But let’s get to the topic du jour: tokens. You really took the lead with this with your Friends With Benefits (FWB) experiment; can you unpack it a bit?

M: FWB is an experimental tokenized community started by our friend Trevor McFedries from Brud, and it’s just getting off the ground really. It’s quite simple, you hold $FWB tokens, and get access to a discord and other benefits, such as articles commissioned just for FWB members and even group access to substacks! 

G: Simple is good, but to me this is something between revolutionary and evolutionary; the tokens/creator coins become the convening and coordinating agent that empowers what I call the MPP (most passionate percentile) of your audience to do what they want to do anyway…tell their friends, but now you can sort of track this net promoter score incidence and provide rewards. To me it’s huge, and it’s part of the broader convergence between social tokens and NFTs. Can you expound a bit?

M: I’m quite interested in the capabilities of NFT’s, but I think it’s more important to view them as part of an infrastructure for the certification, ownership and trading of an asset, than limiting our vision to markets for screenshottable media.

The analogy I would give is that the common current understanding of NFTs is like Bitcoin – you mint a scarce asset, for example, that you hope can be held and traded as a store of value. I think a better understanding of future NFT infrastructure is more like Ethereum, which is about the infinite potential of programmable agreements between people and assets. 

It’s still very early, but, for example, related to artworks I think NFT agreements could evolve significantly when they become a claim to ownership of an asset that could be licensed in the real world. Licensing, after all, is a reason to hold something indefinitely; whereas, the current focus is all about giving incentives to eventually sell something.

G: Yeah, exactly, that’s the nexus I keep prattling on about between the two.

“What if an NFT was a claim to a voting share in a DAO that oversees the licensing of something valuable…”

M: We are working on a project at the moment I can’t disclose that view NFTs more like that. What if an NFT was a claim to a voting share in a DAO that oversees the licensing of something valuable, and the minting of new assets upon democratic approval, in perpetuity, even beyond death? Our mutual friend Trent McConaghy is obsessed with Bowie Bonds, which is a complimentary but different concept, and I see so much room for experimentation there. I should ask him about it actually!

G: Yes, I’m also working on the early stages of a project that I can’t talk about yet that’s in this vein. Suffice it to say, like above, this is all somewhat evolutionary rather than revolutionary; the Bowie/Pullman bonds were precursors to a lot of this, but, again, my dominant interest is around DAOs as self-enforcing community-created agreements that will radically disintermediated rent seekers. But, back to NFTs.

M: In the NFT domain I really like the ZORA model, which initially solved the secondary market scalping problem in limited edition fashion by tying scarce physical goods to scarce NFTs that would pay a cut back to the original creator every time they were resold.

“the more an impression of an artwork is ubiquitous online, the more valuable ownership of that asset becomes. 

They are now opening that protocol up to everyone. One of the more compelling ideas they have raised, an idea that can be sourced back to the theorist McKenzie Wark, is the “My Collectible Ass” principle – or the idea that the more an impression of an artwork is ubiquitous online, the more valuable ownership of that asset becomes. 

I was initially cautious with that approach, but am warming to the idea as a nice way to avoid imposing scarcity on consumption of a piece of media, however also simultaneously build tools to make the concept of ownership more interesting and fluid.

I got involved in culture through a desire to see new ideas, or configurations of activity, stress tested in the world. So while I’m cautious about the majority of activity in the blockchain space, in my mind there is only one space currently showing a serious commitment to democratically governed user owned protocols, fair payment for digital labor, data unions and revaluing the arts, and that is the Web 3 space. So I will continue to try to contribute my thoughts and efforts.

G: You contribute so much. Thank you.