Crypto funding: NFT music service backed by rapper Snoop Dogg leads with $20M raise

This week, a total of 16 cryptocurrency startups successfully raised over $94 million, with Sound, a Web3 music marketplace, leading the pack.

Sound secured $20 million in a Series A funding round, with a16z crypto as the primary investor. Other notable participants included Palm Tree Crew, Scalar Capital, Coinbase, and more.

Renowned music celebrities such as Snoop Dogg, Ryan Tedder, and Tay Keith also showed their support for the project.

Founded in 2022, Sound aims to revolutionise the way artists earn money. The current industry standard for artists is to release their songs on platforms like Spotify or Apple Music and hope for sufficient listens to generate income.

However, platforms like Spotify have been known to pay artists as little as $0.0033 per stream, as revealed by a 2021 investigation by Business Insider. This means that artists would need over 300 streams just to earn $1.

On Sound, artists have the option to sell their music as song non-fungible tokens (NFTs). However, some musicians choose to mint their songs as free public NFTs. Owners of these NFTs can publicly comment on the associated song, essentially using it as a badge of honour.

According to Sound's Q&A, users can prove that they have been fans since the early days of an artist's career. The platform utilises Ethereum and the layer-2 network Optimism.

Since January 2023, the number of song NFTs minted on Sound has more than doubled, exceeding 130,200 in total, as reported by data from Dune. In a press release announcing the recent funding round, Sound claimed to have generated $5.5 million in revenue for a select group of creators in the past year.

Following this successful funding round, Sound stated that anyone is welcome to release their music on the platform and start earning money through NFT sales.

A focus on liquid staking

Alluvial, the developer of the liquid staking protocol called Liquid Collective, has successfully raised an additional $12 million, adding to their previous funding of $6.2 million.

The Series A funding round was co-led by Ethereal Ventures and Variant, with participation from notable investors including Brevan Howard Digital, Avon Ventures, and Nascent Capital, among others.

With the Ethereum Shapella upgrade introduced in April, network participants gained the ability to withdraw their staked ETH. At that time, approximately 18 million ETH (equivalent to $35.9 billion) was staked.

Since the upgrade, staking on the Ethereum network has experienced a remarkable surge. Currently, there are over 664,000 active validators, and around 82,000 more are awaiting approval, as reported by beaconcha.in. This represents a growth of approximately 33% since January.

Companies like Alluvial and decentralised finance (DeFi) protocols such as Lido and Frax Finance are seizing the opportunity presented by this increasing demand.

Liquid staking offers a unique advantage to validators as they receive a liquid staking token (LST) in exchange for their participation in securing the network. In addition to trading, validators can utilise LST on various DeFi protocols to earn additional yield.

Consequently, liquid staking tokens have been performing exceptionally well recently.

Alluvial has stated that the $12 million investment will be utilised to further develop and enhance their enterprise-grade liquid staking solution in the market.

Other notable fundraises

Led by Shima Capital, Artela locked down $6 million in seed funding to build a base-layer blockchain network for large-scale decentralised applications.

Lunar Crush, a crypto market aggregation platform that tracks trending trades, is looking to expand into social media feed creation after it raised $5 million at a $30 million valuation.

KTX.Finance, a decentralised perpetuals exchange that went live in June 2023 on BNB Chain, got $4 million in a seed round led by Hashed.

AI-backed security startup Olympix closed a $4.3 million seed round to enhance its product offerings.

Giza, another AI-based platform but for smart contracts and Web3 protocols, raised $3 million to continue blending AI and blockchain.

Binance Labs committed $15 million to Xterio, a Web3 gaming platform and publisher.

The Web3 Foundation, which is behind Polkadot, announced a wave of grants worth $780,000 that will fund 36 Web3 projects.