Audius

What is Audius (AUDIO)?

Audius, as its name and ticker might imply, is all about music. More precisely, it is a streaming platform built for all musicians and designed with artists in mind.

It offers clear streaming at 320kbps, advertising the highest quality sound from any free streaming platform. In fact, one of the pledges Audius makes is to be free forever with no strings attached.

All of this is possible thanks to decentralization, with music being uploaded, stored, and distributed by content and discovery nodes. Since all of this is incentivized by AUDIO tokens, fans can listen to the music for free.

Not just that, Audius targets the various problems plaguing the music industry, including the fact that only 12% of the industry’s revenue goes to artists. Beyond the leeching of intermediaries, Audius also looks to improve transparency around artist payouts and rights ownership.

Who are the Founders of Audius?

Audius was founded by California-based entrepreneurs and Stanford alumni Roneil Rumburg and Forrest Browning in 2018.

Rumburg is also a co-founder of venture fund Kleiner Perkins, while Browning helped found the enterprise data center management platform StacksWare. Browning is also a Forbes 30-Under-30 recipient and serves as Audius’ Chief Product Officer. Rumburg is currently its CEO.

Audius has an all-star cast of advisors, including Electronic Music Producers deadmau5 and 3LAU, EA Games co-founder Bing Gordon, BitTorrent Chief Architect Greg Hazel, and Twitch co-founder Justin Kan.

Rumburg’s firm, Kleiner Perkins, is an investor in Audius, along with Pantera, Standard Crypto, Binance, Coinbase Ventures, and Multicoin Capital, among others.

When was Audius Launched?

Audius’ founders released an initial version of the project’s whitepaper in 2018 and shipped the first functional implementations of its smart contracts, content node, and discovery node.

Six months after its founding, the team carried out private alpha testing on an invite-only basis. At this time, all content on Audius was hosted on IPFS.

In 2019, Audius brought in its first 3rd party node operators and launched its client implementation publicly. By the end of the testnet period in mid-2020, Audius was being used by over 500,000 fans every month. This significant level of adoption led to the Audius mainnet launch in October 2022.

How Does Audius Work?

Audius is a fully decentralized music streaming protocol that allows artists to distribute content and get paid for it directly by their fans.

There are several key components to the Audius protocol:

• The token economy. This includes artist tokens and 3rd-party stablecoins, aligning the incentives of all participants across the areas of access, security, and governance.
• Decentralized resources. Including decentralized storage for the uploaded content run by users and a distributed ledger to share audio and metadata.
• Encryption. Including a unique track encryption scheme paired with a programmable mechanism to unlock user-specific proxy re-encryption keys for content.
• Discovery protocol. A user-operated network of nodes that index the Audius content ledger and allow easy querying of metadata.
• Decentralized governance. To enfranchise artists, node operators, and fans individually and collectively in decisions regarding protocol changes and upgrades.

Content nodes are a primary part of the protocol, serving as decentralized storage. These nodes can be run by node operators alongside an active network stake, which means they can earn part of the AUDIO inflation and aggregated fee pools. They can also be run by artists in order to host their own content.

These content nodes maintain the availability of content and metadata in Audius on AudSP, which is the Audius-native extension to IPFS.

To distribute an audio track on Audius, an artist first has to agree to the Audius open license. Then, their client will slice the track into segments, encrypt them locally with segment-specific keys, and finally upload the segments, keys, and metadata to their content node(s).

Thanks to AudSP, anyone can fetch the encrypted content that is kept available by these content nodes. The content nodes can selectively issue keys to a given user upon request. This selectiveness can be chosen by the artist, allowing them to issue keys upon a payment being made, the sufficient holding of their own token, or other prescribed conditions.

A fan’s client makes requests to content nodes, along with proof that checks against these conditions. If the fan has met the artist’s requirements, the content node derives a proxy re.encryption key, allowing the fan’s client to locally decrypt the content. All of this tech is what makes Audius unique.

How is the Audius Network Secured?

Audius is a decentralized protocol built atop the Ethereum blockchain, but unlike many simple decentralized apps (dApps), it also involves its own nodes.

Uniquely, Audius functions like an off-chain proof-of-stake (PoS) network in that its content nodes and discovery nodes operate via PoS consensus backed by the AUDIO token.

Operators of both kinds of nodes must stake a minimum of 200,000 AUDIO tokens, although discovery nodes have a maximum stake of 7 million compared to 10 million for content nodes.

This minimum stake ensures that node operators have a certain amount of “skin in the game,” while the maximum is an effort to stop the protocol from becoming too centralized.

The size of the operator’s stake determines how likely it is that they will be rewarded, while this also means the penalty of slashing is all the harsher if they fail to perform.

Ethereum, which hosts Audius, is secured in much the same manner, although the minimum stake is 32 ETH.

What is the Use of AUDIO?

The AUDIO token is native to the Audius protocol and has three main use cases, namely security, feature access, and governance.

AUDIO tokens secure the protocol by being staked as collateral for value-added services. In return for locking these tokens away, stakers receive their share of AUDIO issuance and governance voting power. The tokens are also collateral for artist tokens that are minted on the protocol, as well as other benefits such as badges and earnings multipliers.

Meanwhile, node operators must stake AUDIO tokens in order to operate a discovery node or content node. Just as with proof-of-stake secured networks, more tokens at stake mean a higher probability of being chosen for work and therefore rewarded.

Who Controls Audius?

Audius, as a protocol, is governed in a decentralized manner, with AUDIO token holdings dictating the weight of a holder’s vote.

The token allows artists, node operators, and fans to shape the development of the protocol, with a say on feature integration, royalties, token distribution, pool allocations, and staking rewards.

According to the Audius whitepaper, everything in Audius is governable, and all staked AUDIO tokens automatically receive governance weight on a 1 token, 1 vote basis.

Audius currently has a 6-of-9 community multisig as a veto of last resort, intended to have the power to stop a malicious governance proposal from passing. While this does take away the truly decentralized element of Audius’ governance, even this multisig can be removed via a community vote.

How Much AUDIO is In Circulation?

Currently, Audius has a 7% automatic annual issuance rate distributed on a weekly basis on-chain to node operators. However, this rate may change if a community governance proposal to change it is passed.

The total supply of the AUDIO token was set at 1 billion at genesis, but there is no fixed cap since AUDIO is inflationary in nature. Currently, there are more than 925 million AUDIO tokens in circulation.

The founders and protocol reportedly received 41% of the initial AUDIO supply, with 36% going to investors and 23% earmarked for rewards and airdrops.

How Do You Buy AUDIO?

While the AUDIO token is currently well off its 2021 bull run highs, it remains a popular cryptocurrency thanks to the problems it solves. As a result, you can buy AUDIO on a large variety of centralized exchange platforms. Ethereum-based decentralized exchanges are also an option.

How Do You Store AUDIO?

You can store AUDIO tokens on any Ethereum-compatible wallet, whether that’s a hot wallet like Metamask or a cold wallet like a Ledger device.

Is AUDIO a Good Investment?

Audius is an exciting protocol that solves some major real-world problems using blockchain technology. While it isn’t the only platform looking to tackle content delivery, it is unique in how it focuses on the music niche with a view toward compensating artists fairly.

The platform even has the backing of some of the industry’s biggest names, with Katy Perry, The Chainsmokers, Nas, and Jason Derulo all having invested in it.

Disruption is never easy, especially when attempting to take on an industry with so many intermediaries all reluctant to lose their slice of the pie. If Audius manages to change the music landscape, however, the AUDIO token will be very central to it all.