How to Make a Music NFT
Music fans can support their favorite artists in numerous ways, from buying an album to attending concerts to wearing official merch. But today, the most promising opportunity might be music NFTs (non-fungible tokens) — a medium granting ownership of a musician’s creative work or prized collectibles directly to paying customers. Unlike traditional streaming options, music NFTs provide a new way to engage with fans, raise money over time, and increase the value of a whole body of work.
It’s a new way of doing business for all but the most tech-connected, but learning how to make a music NFT isn’t all that complicated if you know where to start. Read on to find out how musicians can start minting tokens and digitizing their assets right away.
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What Is a Music NFT?
An NFT, or non-fungible token, is a unique digital identifier recorded and authenticated in the blockchain. Unlike many digital objects, NFTs cannot be copied or substituted, but owners can transfer them between users on the same blockchain. That makes NFTs an ideal technology for authenticating ownership of a broad range of physical and digital collectibles.
By association, music NFTs are effectively digital certificates representing digital or physical media ownership. They can be attached to NFT-exclusive singles or albums, music videos, or even memorabilia like instruments and stage costumes. In some cases, these tokens can represent a share of a creative work’s value, allowing holders to earn revenue from their distribution.
Music NFTs can take a variety of forms, usually falling into one of the following categories:
- Single-edition NFTs are exclusive tracks or albums that aren’t available anywhere else. Much like how original paintings can be photographed while the original stays at an art gallery, these tokens represent full or partial ownership of a unique musical work.
- Open-edition NFTs are produced in unlimited quantities for a short time. Once the distribution period ends, these collections will only be available from customers willing to resell their original tokens.
- Limited-edition NFTs are tokenized music with a limited supply, restricting the volume of a musician’s work in circulation to a pre-determined number of assets.
- Physical-backed NFTs enable the ownership and trade of real-world assets such as vintage records, instruments, or property. The corresponding assets are typically authenticated by a third party then held in a secure vault facility to ensure their value remains intact.
To learn more about music NFT distribution, read our blog post “Where to Sell Music NFTs.”
Minting and Distributing Your Music NFTs
Once you’ve decided what type of music NFT you’d like to create, it’s time to learn how to put it out into the world.
Choosing a Blockchain
The first step of minting your music NFT is deciding which blockchain will host the tokens. Each blockchain is a distributed ledger that maintains transaction records and the trading histories of every token in its network. Most blockchains are associated with specific cryptocurrencies and offer unique services, so it’s worth researching the market to determine which solution works for you.
Finding a Blockchain Wallet
Next, you’ll need access to the blockchain economy. This comes in the form of a “wallet” that grants access to the currencies used to mint and buy NFTs. MetaMask and Coinbase are both common choices for wallets that support a range of currencies, but other wallets may be necessary if you want access to a specific blockchain.
Purchasing Currency for Gas Fees
At this point, you’ll likely want to purchase some cryptocurrency associated with your chosen wallet and blockchain. For example, minting your music NFT often incurs “gas fees” that reflect the supply and demand of NFTs to compensate crypto miners on the network. Having cryptocurrency in your wallet creates an option to pay these fees automatically as tokens are created.
Choosing a Marketplace
Like any crypto token, NFTs are sold and distributed via online marketplaces that manage payments and grant customers access to the blockchain. Here are a few examples, each with its own benefits and features.
- OpenSea: One of the world’s largest NFT marketplaces that supports a variety of wallets, but charges relatively high fees.
- Catalog: An industry-leading music marketplace that specializes in single-edition music NFTs.
- Arpeggi: A unique music platform with its own blockchain technology, allowing artists to mint NFTs that aren’t available from other marketplaces.
- Nifty Gateway: A custodial NFT platform that lets issuers mint and sell tokens without requiring an external crypto wallet.
Creating Your Tokens
After all these steps, you’re ready to mint your music NFTs. The main considerations here are the number of tokens you will create and their price — note that limited edition NFTs tend to attract higher prices on the market thanks to their increased scarcity.
For an in-depth look at the process of creating music NFTs, read “How to Mint Music NFTs” on the Dibbs blog.
Producing Music NFTs from Physical and Digital Assets
With the right strategy, tokenizing existing assets to sell on the blockchain can generate an immediate payout and drive recurring revenue throughout an artist’s career. Let’s take a closer look at this process.
Choose and Audit an Asset
Before tokenizing anything, a musician must determine which assets might have value as a music NFT. Some common industry examples include:
- Original music
- Demos or unreleased tracks
- Signed instruments
- Vinyl records
- Merchandise from a popular tour
Artists do not necessarily have to distribute each asset individually. A music NFT can bundle several items together for a unique collection representing a higher value. For example, an NFT relating to a tour might include merchandise, live recordings, and even backstage tickets.
Choose Your Tokenization Partner
Tokenization partners can be invaluable resources at every stage of the tokenization process. Beyond the process of minting an NFT itself, partners can also help with appraisal, smart contract development, managing physical assets, blockchain distribution, revenue collection, and more. In short, the right partner can handle everything relating to the tokenized asset so the musician can focus on the music while enjoying increased revenue to support their creative pursuits.
If you need a tokenization partner who can bring your physical-backed music NFTs to market, fill out this contact form and we’ll reach out with solutions that meet your brand’s needs.
Refine Your Token Distribution Model
Next, you’ll need to consider how tokens are distributed and what owners get with their purchases, especially if physical assets are involved. For example, you might decide whether to issue open-edition or limited-edition NFTs, or the ownership share each token represents for a physical asset. A tokenization partner can manage these details and codify them directly into an NFT’s built-in smart contract.
Vault any Physical Assets
If the tokenized music includes physical assets, it’s essential to establish both their condition and value in a way that anyone holding the token can easily verify. Partners typically accomplish this by securing the items with an ensured vaulting service, whether on-site or with a dedicated security firm. Vaulting guarantees that the asset is protected from the elements, bad actors, and other uncontrollable factors while maintaining its audited value.
Create and Distribute Your Tokens
Finally, it’s time to mint and distribute your tokens! When setting a price, these music NFTs should reflect the value of at least a share of the original asset. When promoted effectively, these tokens will continue to trade on music NFT marketplaces, sending a portion of revenue to the artist with each transaction.
Looking for more details on tokenized music assets? Check out “How to Tokenize Music” on the Dibbs blog.
Once artists know how to make a music NFT, they can do far more than sell albums. They can engage fans who want to support their favorite musicians, create new revenue sources, and tap into second-hand markets that normally leave creators out in the cold. With the right assets and tokenization partner, musicians can get more value from their creative works than ever before.
Learn more about how partnering with Dibbs can benefit your music business.