Why Music NFT Platforms Are Recreating Centralized Gatekeepers

Platforms like Sound.xyz and Catalog replace A&R scouts with token-gated allowlists, creating a new class of tastemakers. The gatekeeping shifts from label execs to early collectors and platform curators.

• Key Benefit: Higher signal-to-noise ratio for collectors.
• Key Problem: Re-centralizes discovery power; success depends on platform favor, not pure merit.

Services like anotherblock tokenize royalty streams, but act as centralized intermediaries for licensing, payment processing, and legal enforcement. They become the new PRO (Performance Rights Organization).

• Key Benefit: Simplified, transparent royalty splits via smart contracts.
• Key Problem: Creates a new dependency layer; artists trade label contracts for platform smart contract dependencies.

Platforms control the primary market and often the dominant secondary market (e.g., OpenSea for music NFTs). They dictate discoverability, transaction fees, and which chains/assets are supported, mirroring Spotify's playlist power.

• Key Benefit: Provides initial liquidity and market confidence.
• Key Problem: Artists must optimize for platform algorithms, sacrificing decentralization for visibility.

Projects like Audius (decentralized protocol) versus its dominant client (centralized app) show the split. The underlying tech is permissionless, but user experience is controlled by a single front-end that dictates features, monetization, and curation.

• Key Benefit: Censorship-resistant backend with a polished UX.
• Key Problem: The 'face' of the protocol holds all the gatekeeping power, creating a single point of failure and control.

Platforms like Audius and Royal enforce primary sales and secondary royalties through their own smart contracts and marketplaces. This creates a closed-loop economy where the platform's token is the mandatory settlement layer, replicating the 30% Apple/Spotify tax with a crypto facade.

• Value Capture: Platform fees siphon 5-15% of all transactions.
• Lock-in: Artists cannot easily port their community or royalties to a competing protocol.

Platform tokens like $AUDIO or $SOUND are marketed as tools for decentralized governance. In practice, voting power is concentrated among early investors and the team, with <5% of token holders deciding critical platform upgrades. This mirrors the opaque A&R decisions of traditional labels.

• Centralized Roadmap: Core protocol changes are proposed and passed by insiders.
• Staking for Access: Artists must often stake the native token for premium features, creating a pay-to-play barrier.

Each platform operates its own fragmented marketplace, locking liquidity and discovery within its walled garden. This defeats the composable, permissionless ethos of Ethereum or Solana, where an NFT should be tradable anywhere. It's the Web2 platform playbook of creating captive audiences.

• Fragmented Discovery: Fans must navigate dozens of isolated platforms.
• Vendor Lock-in: Platform-specific metadata and token standards hinder interoperability with open markets like OpenSea or Magic Eden.

The escape hatch is building minimal, credibly neutral protocols for core functions (royalty enforcement, metadata) that any front-end can use. Sound.xyz's move to Zora's protocol and Catalog's use of base Ethereum standards point the way. Value accrues to the creator and the public ledger, not a platform middleman.

• Permissionless Front-ends: Anyone can build a discovery layer on top.
• Portable Assets: NFTs and royalties are fully interoperable across the ecosystem.

Platforms like Catalog and Sound.xyz control curation, listing, and discovery, acting as centralized taste-makers. This creates the same artificial scarcity and artist gatekeeping as Web2 labels.

• Artists lose sovereignty: Platform algorithms, not community consensus, dictate visibility.
• Value accrual shifts: Fees and royalties are siphoned by the platform, not the underlying protocol or artist community.
• Interoperability suffers: Locked-in ecosystems prevent NFTs from flowing freely to other marketplaces or financial applications.

The winning model is infrastructure that enables, not intermediates. Zora and Manifold provide tooling for artists to mint and manage their own smart contracts, while Sound Protocol separates the creation layer from the front-end.

• Artist-owned storefronts: Creators deploy their own customizable, fee-less minting contracts.
• Composable building blocks: Enables a competitive ecosystem of discovery apps, aggregators, and financial tools on top of a shared data layer.
• Sustainable value capture: Fees accrue to the protocol treasury and artists, not a single corporate entity.

Closed platforms fragment liquidity and enforce unenforceable royalty schemes. This kills secondary market depth and long-term artist revenue.

• Fragmented order books: NFTs on Platform A are illiquid on Platform B, destroying price discovery.
• Royalty unenforcement: On-chain royalty enforcement is a losing battle against aggregators like Blur and OpenSea Pro.
• Solution: Build for shared liquidity via aggregation (e.g., Reservoir) and embed royalties into the economic model via artist tokens or protocol-level splits.

Audius demonstrates the hybrid trap: decentralized storage and governance with a centralized, app-store-like front-end controlling the user experience and data flow.

• Centralized choke point: The canonical front-end acts as a gatekeeper for streaming and social features.
• Misaligned incentives: $AUDIO token governance is disconnected from core product usage and revenue.
• The alternative: A modular stack combining Lens Protocol for social graph, Livepeer for streaming, and an NFT protocol for ownership, allowing infinite competing front-ends.