Blockchain Startup's Plan To Upend Spotify: A $9.6M Cryptocurrency Giveaway

Blockchain-based music-sharing and streaming platform Audius gave away 50 million of its AUDIO cryptocurrency to music fans and artists, Decrypt reported Tuesday.

What Happened: The "airdrop," as a cryptocurrency giveaway is called, was retroactively implemented on Friday and reportedly benefits 10,000 artists and fans on the Audius platform.

The airdrop would be worth about $9.59 million as of Friday's closing price, according to CoinMarketCap data. At press time on Tuesday, AUDIO tokens are trading 17.45% lower at $0.159 — perhaps an after-effect of the giveaway.

Audius offers services similar to Spotify Technologies Inc SPOT and claims to fight what it describes as a broken music industry model.

The decentralized music protocol said in its whitepaper that while the music industry generated $43 billion in revenue in 2017, only 12% of it made its way to artists.

The startup has roped in talent such as musician Joel Thomas Zimmerman, also known as deadmau5, and André Allen Anjos, who goes by the stage name of RAC, according to Decrypt.

Why It Matters: AUDIO is reportedly a governance token but also allows users to listen to their artists of choice through a Discord server.

The distribution of the token was carried out unevenly and was based on a formula that factored in how much an artist was streamed along with follower count, playlist, and song favorites, as well as songs reposted, noted Decrypt.

The formula purportedly favored artists who received 90% of the tokens distributed. 

A total of 5% of the tokens were distributed from a supply of one billion. Zimmerman and Anjos are both beneficiaries of the token distribution, as are some other artists, who make up the Audius team or are on board as advisors, Decrypt reported.