Founders Fund Invests in Royal: NFT Music Marketplace

Royal: Revolutionizing Music Ownership with NFTs

Founders Fund and Paradigm are spearheading an investment in a novel platform designed to integrate music rights with NFTs. This innovative approach enables users to acquire portions of songs via the company’s marketplace, subsequently receiving royalties proportionate to the music’s increasing popularity.

Introducing Royal and its Founders

The venture, known as Royal, is under the leadership of Justin Blau, an EDM artist performing as 3LAU, and JD Ross, a former co-founder of the home-buying company, Opendoor. Blau has actively explored the potential of NFTs for musicians, launching several initiatives to redefine how artists monetize their work through cryptocurrency markets.

Blau explains that the restrictions imposed by the COVID-19 pandemic, which halted his touring schedule, prompted a full-time focus on NFTs. His goal was to reshape the existing power dynamics within platforms that traditionally capture the majority of value from creators.

Early Success and Market Context

Prior to the widespread attention surrounding NFTs following the $69 million Beeple sale at Christies, Blau achieved a significant milestone in March. He sold a collection of customized songs and artwork for a combined $11.7 million in cryptocurrency.

Royal’s funding announcement coincides with a surge in the NFT market, witnessing substantial investments in community-driven projects like CryptoPunks and Bored Apes. While platforms for visual artists have rapidly developed, fewer initiatives have concentrated on musicians.

Investment Details

Paradigm and Founders Fund are leading a $16 million seed funding round in Royal, with participation from Atomic, where Ross previously served as a general partner. Keith Rabois, also a co-founder of Opendoor, managed the deal for Founders Fund.

Future Plans and Platform Access

The company is currently withholding detailed information regarding its launch and product roadmap, including the timeline for selling fractionalized assets. However, it is evident that Royal will leverage Blau’s musical background and industry connections to attract initial users and investors.

Interested individuals can currently register for early access on the company’s website.

Navigating Regulatory Considerations

As NFT startups explore intricate ownership structures aimed at fostering creator-fan collaboration, speculation is growing regarding potential regulatory responses. Entrepreneurs in this current wave are proactively addressing legal concerns, learning from the experiences of the 2017 ICO boom and subsequent SEC scrutiny.

Blau affirms that Royal’s team is collaborating closely with legal experts to ensure full compliance with all applicable regulations.

Challenges and Opportunities

A key challenge for the company will be ensuring that broadened access to music rights ownership genuinely benefits artists’ fans and expands their fanbase, rather than solely attracting crypto speculators. Blau emphasizes the potential for improvement in the current distribution of music royalties, which is largely concentrated among labels, private equity firms, and hedge funds.

“A dedicated fan may desire ownership opportunities before they are even known to speculators,” Blau states. “Expanding access to asset classes is a central tenet of the future of cryptocurrency.”