Web3 Galaxy Brain 🌌🧠

Web3 Galaxy Brain

Song A Day with Jonathan Mann and Edouard Bessire from GBM Auctions

24 January 2023


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Nicholas: Welcome to Web3 Galaxy Brain. My name is Nicholas. Each week I sit down with some of the brightest people building Web3 to talk about what they're working on right now. Today on the show, I'm joined by musician and NFT artist Jonathan Mann. For over 5,000 days, Jonathan has written, recorded, and published a song a day. After discovering CryptoPunks in 2017, he fell down the crypto rabbit hole. Over the past six years, he's melded his daily music practice and his interest in artist empowerment through NFT creation. In this episode, we discuss Song A Day's evolution from a YouTube songwriting project into an NFT collection and full-fledged DAO. We discuss the legal organization of Song A DAO as a Colorado co-op, Jonathan's collaboration with Raid Guild, who built the website and contracts, and why he chose to assign the rights to all songs in the collection to the DAO. We even get a glimpse of the comparative revenues generated by the Song A Day collection between traditional music streaming and NFT sales over the past year. We're also joined by Edouard Basir, co-founder of GBM Auctions. Through their experience building NFT charity auction protocol Cryptograph between 2018 and 2021, Edouard and his collaborators invented their signature bid-to-earn mechanism. In short, when a bidder is outbid in a GBM auction, they receive a small percentage of the new highest bid as compensation. We discuss the advantages of bid-to-earn for incentivizing early participation and price discovery in English auctions, and how Song A Day was able to integrate the mechanism into their existing contracts. Songaday.world features a plethora of sophisticated features that demonstrate a true affinity for NFT collecting, decentralized organizing, and Web3 experimentation. It's always a pleasure chatting with Jonathan, whose down-to-earth approach and humble ambition are an inspiration to crypto musicians and creators of all stripes. I hope you enjoy the show. Hey Jonathan. Hey Edouard. Hello! Hello. Good to hear from you. How are you doing today, Jonathan?

Jonathan Mann: I'm doing pretty good. How are you?

Nicholas: Doing pretty good too. It's been a big day. I've been obnoxiously tweeting about it incessantly, but I launched this Gabriel Haynes project.

Jonathan Mann: I was just looking at that. That is so cool. Oh, thanks. I really like it a lot. So how does that work? People add money into the juice box, and that's the way you get the money? So it sort of allows them to get a rant? Is that the general idea? Yeah, exactly.

Nicholas: So actually it started last week. So a couple weeks ago, I was meditating on how a lot of projects on juice box, which for those who don't know is like a fundraising and programmable treasury protocol run by a DAO called JuiceboxDAO on Ethereum. I was thinking about how a lot of the projects in the ecosystem overall, but especially since sort of the bear market has set in, it's been difficult for many of them to get traction. There's been a handful, but since we launched this new NFT feature a few months ago, projects can now issue NFTs. So anybody who makes a payment to a project above a certain threshold can also get an NFT. So you can also just use that to replace the fungible issuance for the juice box altogether. And those NFTs can have that classic juice box feature where the token from the project is a claim on the treasury. The part of the treasury that hasn't been spent yet, like a constitution DAO for example. I was thinking for a couple of weeks, there's just a lot of projects that are failing to achieve much traction because they're not selling something that people want as much. that doesn't make a bear market. So we started doing a couple of weeks ago, this office hours, Twitter space and podcast Wednesdays, 4 20 PM. now we're Django and I are chatting with people. Juicebox are not related, but just talking about NFT tokenomics and other kinds of membership tokenomics to try and make your project work. And in the wake of the first episode of that, I was chatting with this guy Salman, who's an Indian YouTuber who does web three work YouTube videos. And through our conversation, he just made me think it would be great if you could do something like, and obviously everyone's had this thought already, but it would be great if you could have a cameo style mechanic where you mint an NFT and then you specify in juicebox lets you write a little bit of text called a memo associated with any payment. So if you go to mint an NFT and you pass a string with the memo, you can like essentially graffiti the activity feed on the juicebox page. So I thought it'd be cool if you could just do that and communicate to the project creator or an NFT creator, some desire. And so I took a look at the cameo site a little more detailed than if you go into the pages of the creators, if you go to purchase a cameo, they have different subcategories of types of cameo that you can get. And I variations on those themes came up with these two for Gabriel. that seemed appropriate to avoid people trying to get him to shill.

Jonathan Mann: Oh yeah.

Nicholas: Trying to get him to shill their shit coins. So I came up with the roast and the pep talk, which are variations on the cameo ones. I contacted Gabriel last week and he was up for trying it. Actually he had done a kind of project in this vein called the clip to, I think last year. So we ended up working on it. I drew up some token art and we launched the project on Wednesday and in 24 hours he sold all 12 tokens of the first drop that we did and like almost 2000 bucks or something like that in ETH. So yeah, I think it's a pretty interesting model. I'm looking forward to trying to apply it to things that are other types of talent, not just like yelling with a machete on Twitter. But I don't want this mechanism typecasted as just good for that. I think it would be great for artists or also like critical analysis. I was trying to see if Chris Black would be open to like analysis of protocols on the basis of this commission him to do one of those. So that's today. we dropped the second batch of NFTs. So we've been playing with that and actually Gabriel came up with a very cool mechanism where he creates a video in response to these rant NFTs they're called. And then he's been on manifold minting open editions available for only 24 hours of the video.

Jonathan Mann: Right.

Nicholas: So today we figured out a way to point the revenues from those open edition mints back at the Juicebox project. So it's a little flywheel kind of thing.

Jonathan Mann: Right. I noticed he posted one and I saw him retweeting it and saying, no one's minting this because no one had minted it yet, which I really actually resonate with. It's actually kind of hard to get people to buy these open editions I found. Yeah, it seems like it should be easier, but I think there's a really interesting scarcity is so important in NFTs. There's like this really interesting interplay between it being not scarce enough. I don't know exactly what, but I definitely noticed the same thing.

Nicholas: Totally. Frankly, I was never quite sure why people were buying open editions. Yeah. It's like there was the big X copy. Yeah. Max Payne one. It was a lot of Tezos NFTs like that. And I think in music, what does it sound XYZ? They're not exactly open, but they're larger editions.

Jonathan Mann: Well, and you know, it's interesting. I saw Amber Vittoria, who's like a pretty well-known NFT artist in the space. And she made a post that I was like, oh, I'm using these words wrong or we all are using these words wrong. At least according to her, I believe her, she'd come from like the fine art world. An open edition, technically, I guess, according to Amber, is it would be a kind of never ends. It's open and it's always open. Yes. And so what we all are doing is timed edition, which is a different beast. Timed editions just means, yeah, there's a time limit. And that really is that literally is everything from like a sound. Not like sound. Sound is limited edition because there's only so many of them. But a lot of these things are actually just timed editions versus.

Nicholas: I mean, I like timed editions because it's sort of like a Po app. It's like, were you there? If so, you can guess. And it's uncapped during the time limit. I think it's a very cool mechanism. I think it's a little harder to understand the speculative story around what those tokens might be.

Jonathan Mann: And NFTs need that need that speculation to really at least where we are now. I'm always like looking forward to the day when we don't necessarily need that level where I'm like, oh, I like Gabriel and this particular one like tickled my fancy. Like I will mint this, that kind of a thing.

Nicholas: And for these he's doing 24 hours. So they are timed editions. But in preparation for this conversation, I listened to your bankless layer zero conversation eight months ago, something like that.

Jonathan Mann: Yeah, a long time ago. Yeah.

Nicholas: A whole lifetime in this world.

Jonathan Mann: In this world, yeah.

Nicholas: You know, we're talking about both scarcity and speculation. Part of the thesis for the Gabriel Haynes project, which is one of like three or four that I'm trying is that especially in the bear market, and I think when the bull market comes back, if it indeed comes back, I think the speculative arguments around, you know, all this, like every PFP project promising a metaverse or whatever, I think that'll work. But especially in the bear market, I think people want to know why they're supposed to be minting. Either it's because it's art and it's, it stands on its own as art. Or I think this like the Gabriel Haynes kind of project where it's like, no, you give you something, something real, something tangible. And it's not this like moonbirds or board apes, speculative fiction, which is cool, too, but it's just not the right time for it.

Jonathan Mann: I think one thing the cameo thing makes me think of is early, early 2021. We're talking like January, February time, right at the beginning of the NFC bull run. Mark Cuban, he got involved in NFTs. This was one of his first sort of NFT plays was on Rarible. He, he minted an edition of a bunch of these things. And if you bought one, it granted you the ability to get him to do a cameo for you.

Nicholas: Oh, yes, I remember that.

Jonathan Mann: That was his like one of his very first kind of use case ideas.

Nicholas: Yeah, I mean, I think the idea is simple enough. Frankly, the first thing that brought me into the NFT space, and I came much later than you, was in 2020, thinking about like PewDiePie or someone like that saying, drop your address in the comments and someone will get an NFT or something like that. But it's taken a long time for it to. only in the peak of the bull market, you get people like Logan Paul or whomever, right? I actually think it's more interesting to go for someone like Gabriel, who's got a CT audience, because the reality is you see different numbers, but there's like something on the order of 100,000 people who are trading NFTs on Ethereum right now. Yes. And you got to be advertising to them that you have to be giving them something you want.

Jonathan Mann: And for someone like me, unfortunately, because what I find myself doing, and you know, this goes to Song of Day, which is I've always just done with Song of Day, I'll write about things only that I'm like interested in. And I happen to be interested in crypto and happen to be interested in a bunch of the things that happen in crypto. So it's not it's not totally outside of the realm. But you know, what I'm doing lately, actually, is periodically ask on Twitter, I'll say just like, what should my song be about? And I'll just admit this here is not very good listening. So maybe that's fine. But like, you know, what I've been doing is essentially I will pick ones from people who I know are crypto native, and ideally have something like an of an audience and I will do their thing and then they will buy it. And like, that's how I'm making sure that I'm selling song each day. So it's not that different from doing a cameo, you know, it's like, it's just I'm making it part of my Song of Day versus. but I will say I do like it. What you've done, building it on top of Juicebox. I think that like, brings a very like an extra layer. And especially once things ever really get cooking again, that has some like real potential to be. it could have some speculative value in a sort of constitution doubt kind of way.

Nicholas: It's interesting what you say so many things to talk about off this. First of all, I mean, I just imagine you're going to be the songs I announced proposal.

Jonathan Mann: Oh, I mean, I mean, yeah, exactly. And so but what's nice is like, sometimes crypto people will not ask for crypto things. They'll just ask for other random kind of things. And so it's nice to just sing about, you know, something random, which is always one of my favorite things to do. And then I basically said, I'm the song like, here's your song. The implication being, please also bid on it. Go bid on it on the website. But yeah, I also, you know, like David Hoffman from Bankless also requested a song about small brains. I feel obligated from what to make a song about the small brains NFT that's on Arbitra. Yeah, right.

Nicholas: That's interesting. Like with Gabriel, I tried to do roasts or pep talks.

Jonathan Mann: Yeah.

Nicholas: And in a similar way, this may be something interesting for Song of Day is I bought the first one and I bought it a roast of nouns. Dow. Oh, yeah, I wanted to stir the pot a little bit. And yes. And then someone from the nouns community index card, I think is his name. Bob Pep talk for nouns. Dow. Oh, great. Oh, I was very excited about this because, you know, essentially not that we're in the same business. You know, that's how Facebook makes all their money. Just, you know, monetizing. Yes. Arguments on social media.

Jonathan Mann: Both sides.

Nicholas: Exactly. I can do that for creators.

Jonathan Mann: That would be fabulous. Yes. Like, yeah, totally.

Nicholas: Or Gabriel's Dow or whatever. I think Gabriel, we've talked a little bit about it. I don't think he's particularly interested in like launching anything that's quite down. Yeah. But he actually is interested. And I think this is a great direction for someone who doesn't want to do a Dow in sharing the revenues of that open edition. in response to the original rant with the person who got the rant token.

Jonathan Mann: So yeah, 100%.

Nicholas: There's a reason for you to buy it, which actually is kind of like the topic we're going to talk about here in a little bit, the bid to earn stuff.

Jonathan Mann: And we're even doing something even more similar to that in Song of Day. We're starting to. it's the year of the additions. We are launching additions on arbitrum of. we're going to start with specific songs. So for instance, a gentleman called Buddha zero X bought the original Crypto Punk song that I wrote back in 2017. And we are going to launch an edition of that. He owns the one of one, but we're going to launch an edition on arbitrum.

Nicholas: And with some, I assume.

Jonathan Mann: Yes, yes. It took some convincing to, but I convinced him that essentially what happened was Jacob from Zora convinced me that we should have additions. And I became convinced by his argument, which is essentially what you do is you both increase the number of people that are holding a song of the NFP, which is good. But then you also create a community around a particular NFT. You, you, you, you know, with this Crypto Punk song, say, you know, you tap into the Crypto Punk community that already exists and you create, you know, this community around this song that was written in 2017 that has a bunch of history associated with it. The song does. And so when I explained that to Buddha zero X, he really came around just, just as I did. I think it makes just so much sense. But the thing that we're going to do is share the revenue with him. Oh, actually, technically it's with the NFT. So whoever owns the NFT, uh, the primary, and then if he sells it a bunch of the secondary of the revenue from the additions goes funnels into whoever owns the NFT.

Nicholas: It reminds me a little bit of, I really liked it. The Euler beats. Yes.

Jonathan Mann: Yeah, exactly.

Nicholas: That model when they launched it and it kind of petered out, but it was so such a good idea.

Jonathan Mann: Yeah, it was a brilliant idea. And I think it's, you know, so many of these ideas, I think they did so much that was great. Like things with bonding curves and everything like. all these ideas are going to come back around. We're doing it with the crypto punk song. If we're successful with that one, you know, maybe we'll do that. I'm like song 5,000 and we could do other songs that are very crypto related. And then eventually if we got to the point where we could, maybe we would do like every song would have the opportunity to have additions associated with it.

Nicholas: Yeah, very cool. The only thing that comes to my mind is like, how strong is the community around that open edition? You know, you don't want it to be like not so healthy just for the general vibes.

Jonathan Mann: And it's difficult. Anything like this is difficult, especially in a bear market. So but this is the time for building experiments and trying things. And if it doesn't work, it doesn't work. And well, that didn't work. And you move on to the next. That's basically, I think, how we're approaching it.

Nicholas: I want to talk a lot about the DAO and the website and your relationship with Raid Guild. And I know you worked with a lawyer also to set it up. And we'll get into all that before we go too far. I want to say hi to Edward. How's it going?

Edouard Bessire: Hey, guys. Yeah, I'm really good. Thank you.

Nicholas: Maybe do you want to introduce yourself briefly to the people so it's not too mysterious for too long?

Edouard Bessire: Yeah, sure. So my name is Edouard and I'm one of the co-founders of GBM Auction. Basically, what we do is we help projects and also individual creators in doing their drops. And when you have a marketplace in getting great price discovery and basically price discovery mechanisms like auctions. And so our main product is GBM Auction. It's an auction type that we invented and we've helped several projects to use for their drops and also in their own internal marketplace. And so it's a system where when you place a bid in an auction and you get outbid, you get more money back than your bid. So it's basically a system where you make money from being outbid. Basically, what this means is that the only two things that can happen when you take part in a GBM auction is you either win the item, you win the auction, or you make money. And so we invented this mechanism in one of our previous platforms in the Unity space called Cryptograph. And since then, we've been helping other projects integrate it. And actually, Sans Gédé is one of them. Right now, there's actually a GBM auction live on their site for data-driven warm. I'm looking at it right now. Pretty cool. And so, yeah, that's what we do. We've got a lot of projects right now. We're implementing it and it's been very, very successful and really helping in price discovery, finding the right prices for NFTs and also transforming the experience for the community. Everyone loves taking part in GBM auctions and these drops. And so, yeah, we're looking forward to trying to roll this out more. And we have a lot of people that are looking at this now and integrating GBM. So that could be a pretty big year for GBM in 2023. So yeah, very excited about that.

Nicholas: Awesome. OK, so I think we'll talk a little bit about Jonathan's work and then eventually we'll get to talking about GBM in more detail because I think it's a very interesting mechanism. I mean, it sounds like win-win for everyone who participates. So that's what we like around here. So Jonathan, I want to know, so the first time I encountered you, I can't say exactly where it was, but it was definitely in the Leo Laporte, Twit, MacBreak Weekly space.

Jonathan Mann: Oh, that's funny.

Nicholas: And so this to me is in the constellation of like John Hodgman, Merlin Mann, John Roderick, obviously Leo, I guess Alex Lindsay, I think. That whole crew back in the day. And that was right around the time when you started Song of Day, right?

Jonathan Mann: It depends on when you saw me on there. I've only been on there a couple times, but one of the main times was right around song. Oh, 1000.

Nicholas: OK, OK.

Jonathan Mann: I mean, that is literally it was 2011. So that's 12 years ago. So it is a very long time. It does feel like the beginning still, even though it was 1000 songs in. now, it feels very much like the beginning. But I remember that we that whole month of June of like leading up to my thousandth song, I did a Kickstarter and I raised a bunch of money and hired like basically my friends to come live with me for a month and like make Song of Day together for a month for the month of June of 2011. And there's a song from that month called Petaluma Leprechaun or something like that. And that's because me and my friend Thomas had gone up to Petaluma, California, where the Laporte house was. And we did like a live performance of one of the songs.

Nicholas: That's where we had the studio, right? I haven't seen what he's done in years. I haven't paid it much.

Jonathan Mann: Yeah, neither have I. Although I was on again. I was on again relatively. I made a song for Waz's 70th birthday, I want to say. OK. And they brought me on again for that. That's that was 2020. I think that was the last time I saw this guy.

Nicholas: So for reference, for people at the time of recording, we're on 5133. Data Driven Worm is the song today. It's number 5133. And you're wearing this ATP zip up hoodie, which is another podcast in the same kind of zone.

Jonathan Mann: This is like the only hoodie I wear. I have like three of them. It's like a staple of Song of Day at this point is the ATP hoodie.

Nicholas: For people who don't know, that's Accidental Tech Podcast with Marco Arment, who created Instapaper and was CTO at Tumblr, I believe.

Jonathan Mann: He was like a co-founder of Tumblr. It was just him and David Karp in the beginning.

Nicholas: Crazy. So and then Marco kind of over time went from Tumblr being his main claim to fame to being kind of a real influencer in the Apple development community. Yeah, exactly. Overcast is his current project, I think still his main current project.

Jonathan Mann: Yes.

Nicholas: And also John Siracusa is another Mac head from that zone of the podcast space, which back in the day was, I mean, some of the earliest, not the Adam Curry was, I guess, the first or maybe the first podcaster, depending how you define it. And but in that early era, Steve Jobs announcing iTunes with podcasts and that iTunes U era and Leo Laporte and this whole network of Mac nerds and primarily California to me was a big influence in the early days. This is like when MOOCs were new, even maybe even before them. So it was a really it's funny. And I was a big Merlin man and You Look Nice Today fan and Lonely Sandwich, the whole gang. I mean, it's a small world.

Jonathan Mann: It's a small world. And it's so funny if you know me from something, it's like, oh, oh, it's like people know me from ATP or something, you know, it's like it's always so nice to be to find fellow Mac nerd people.

Nicholas: Totally. I mean, I remember Instapaper.

Jonathan Mann: Very specific.

Nicholas: Envy alt these kinds of things.

Jonathan Mann: Oh, what a time.

Nicholas: So you had this around a thousand. That must have been when the crossover moment was when I first discovered you. And then fast forward to getting into crypto 2017 around CryptoPunks was when you really got enthused about crypto.

Jonathan Mann: That is yeah. Right when CryptoPunks had launched maybe like a couple of months earlier and my friend Boris showed it to me and and you can find this. There's this video of me sort of speaking about CryptoPunks at a conference, actually very Mac adjacent conference in upstate New York. And I'm speaking on CryptoPunks in like 2017 explaining how CryptoPunks did this thing and how I want to do the exact same thing with Song of Day. So it was the kind of thing where it's just very early on. I saw what CryptoPunks was and I really related it directly to Song of Day in the way that there's a finite number of punks and there's a finite number of songs and they all have these different attributes. And it just was very clear to me that like this could be like a viable way for me to monetize Song of Day in a new way that was not possible before.

Nicholas: Yeah, I remember you mentioning this in the Bankless podcast. I have to go find that video because you launched an NFT project that gave you the means to create the Song of Day world whole site. Is that right?

Jonathan Mann: Yeah, so Song of Day world was built on the back of first. I sold like the first year of Song of Day on OpenSea and like March of 2021. I've been working towards that goal for like a long time and I actually have spent a long time now like thinking about how back in 2017 I should have, but I didn't really understand how important blockchain timestamps were going to be. Although plenty of people sort of told me that and I feel like I understood it in theory, but like I didn't really. There was so much about like NFTs that especially back then that like I understood in theory, but didn't really understand. I guess it took me like a really long time to actually understand the ins and outs and like the real how NFTs work. But I think a lot about like. I have plenty of opportunities to actually just like mint songs back in those days from people who were who were just at the beginning of building that infrastructure. I minted the very first song on Ethereum with the guys from SuperRare. But like even that, if you look at the metadata, it's like it's really bad metadata. It's really shitty. It's like we didn't put the song itself or the video on IPFS. We didn't get a hash of the song or the video. The metadata just contains basically like the title of the song, the length of the song and like a link to the YouTube video. And so like I didn't really understand how any of that worked back then on a fundamental level. If I had, I probably would have put more effort into making that right. And I probably would have not worried so much actually about like all this other stuff that I want to do. I had this whole vision about how I wanted Song of Day to work and I wanted to be very much like CryptoPunks. That was always my vision where even down to each song having its own image and the traits of the image, just like there's different traits in CryptoPunks would reflect the traits of the song. So if the song has guitar in it, then you'd see a guitar in the image. If the song was happy, then the face in the image would be happy. And if the song was recorded in France, then you'd see like the Eiffel Tower in the background or whatever. And ultimately, that's what I did. And what I found and what's been so interesting over time is that like kind of for song NFTs, especially like none of that really matters. Like I have custom images for every single song, Song of Day NFT for the first 13 years, 14 years actually. And no one cares about them at all. Like none of that matters even slightly in the least. Like it's not a thing that anyone seems to really care about.

Nicholas: You hired like several artists to create different versions.

Jonathan Mann: I hired 14 different artists for each year, you know, that had been my vision. And I sort of stubbornly stuck to that vision. But it's become very clear that like that none of that matters. And of course, the song and the video are what matters. That's the. that's the thing. And so I look back to those days, the 2017 days, and I'm like, I honestly, I could have just minted songs. I could have just been minting the songs back then. And I really sort of regret it and wish that I had been. But anyway, that's a really long tangent to say that.

Nicholas: And that in how you approach doing things now, like being more.

Jonathan Mann: Yeah, definitely. If I have an idea to mint something now, I just do it. And of course, the tools exist now to be able to do it. Like back then, you know, I relied on people like SuperRare or there's these other guys called Rare, just called Rare was the website. And, you know, I relied on devs and people to to put all that together. There wasn't any kind of like self-serve. There was no kind of self-serve thing.

Nicholas: And even IPFS wasn't a standard practice at the time, I guess. I'm sure CryptoKitties was just hosted on a server and CryptoPunk was also.

Jonathan Mann: Yes, exactly. And but IPFS was around and we all we definitely talked about how you want to put things on IPFS. So that's a long way to say that, like when March of well, when January and February of 2021 rolled around and OpenSea had this like door front where you could where you could just upload stuff self-serve style and put in all the traits that existed. And so I used that to mint the first year of Song of Day and that sold out. And I used that money. and then I also used this other project that I did called the fucking trolls, which is a project that me and Matt Condon and Chris Piasik did together.

Nicholas: Cool.

Jonathan Mann: To pay Raid Guild to create the custom contract, create the Song of Day.world site. that ended up being the key to really doing the full Song of Day and a key experience, as I had always kind of envisioned it.

Nicholas: Because I haven't really said this yet, but Song of Day.world, which is the site we're working at as we're talking, is really incredible. I mean, from a, I think of you as an independent musician and from an independent artist of any kind to create such a sophisticated website with so many interesting mechanisms, such a solid, clear experience up front for participating in the daily auctions. I think it's like extremely impressive that you're able to pull this off.

Jonathan Mann: Well, thank you. Yeah. I mean, so much of that is down to the designers that I worked with from Raid Guild and then the continuing design work and development implementation work from the devs that we have working with us in Song of Day.

Nicholas: Oh, interesting. Some of the ongoing work has been now transferred to people in the DAO?

Jonathan Mann: Yes, absolutely. The site maintenance and adding new features and any new ideas that I have for the site are all now implemented by, we have two devs, essentially, maybe three, depending on working in Song of DAO. And, you know, we just pay them from the treasury and we're actually also a co-op. There's a way for the people who do work for Song of Day to also get paid in, essentially get paid in equity in the project. Although we haven't quite figured out all the ins and outs of that yet, but like, that's the ultimate goal. And I think of like Song of DAO really as, I think of Song of DAO. ultimately, what I get to be is like my label, more or less, where it's a group of people right now. It's a, it's a pretty small group of people. There's maybe like eight or nine of us, probably like four or five of us really hardcore. And then like eight or nine, and then a bunch of people who just own songs and we'll stop in now and then, but we have these weekly meetings and we, I come up with ideas or like other people have ideas and we just implement them. There's just like a ton of different ways that we've been experimenting, like with these additions that we're bringing on or with the GBM stuff, which we rolled that out like last week or the week before, as we move through the space, as we find new and different mechanisms that make sense to add on top of this basic experience of Song of Day, which is, you know, very nouns like one song every day, it's up for auction. You can buy one at the buying a song sort of gives you grants you the first level of access into being in the DAO and that kind of thing. As we discover all these new mechanisms, Song of DAO really exists. at this point, it seems like to, to sort of implement that kind of stuff. And I would love eventually for Song of DAO to include things like copywriters and, you know, social media people and like people to offload all of the sort of stuff that a label would do, you know, do for me, but then also you can earn equity in Song of Day as a project in exchange for that work.

Nicholas: Before we go too far, I wanted to just read the three like top bullet points on the Song of DAO page of Song of Day.world. Song of DAO owns 100% of the rights to and revenue from all Song of Day songs, which is extremely bold, frankly, for a project you've been working on so long. to pass the rights over to this DAO, an experimental project. Very bold. I think that's the right word.

Jonathan Mann: Well, what's funny, I should say, though, for a second, though, we haven't, the rights thing has not happened. The money part is done. Like our Song of DAO gets 100% of each daily auction. But even more than that, it gets 100% of all royalties off chain, like traditional royalties that come in from music. They all go into a bank account that's owned by the co-op. And if I want to spend that money, I do an on-chain vote for people that can vote in the DAO. The rights thing, when we wrote that, I did not realize how complicated it was going to be. It's very complicated and very dangerous. But yes, anyway, I think in some ways it's more important that the money thing and the money thing is definitely has definitely happened.

Nicholas: Before we move on, part of my question is, I mean, isn't the whole premise of musicians going on chain that there isn't really any money in the publishing unless you're in a movie or commercial or something, which I guess this is includes that. But in general, there's not that much money on Spotify and Apple.

Jonathan Mann: Yeah, I think the here you read the second one. I actually have the actual numbers. OK, great.

Nicholas: OK, so I'll read the two others. So the second sort of premise of the DAO is members decide how to use those rights and revenue to grow the value of Song of Day. And number three, as Song of Day gets more successful, so does the DAO. And I guess this is the idea that the value is coming back to the DAO. And then people who are participating in the DAO can have an increasing share of either those revenues by being paid out or even in a sense ownership of the DAO. If you do work, you're compensated in like ether, stable coins, or also potentially in some token based ownership of DAO itself.

Jonathan Mann: And legally, we're in the eyes of the law because we're a co-op. Like the shares would not just be these kind of like, I don't know, forgive me, like Namby Pamby tokens, but they'd be like real shares in the eyes of the law. So last year, the fiat account. Well, anyway, from January to November, the fiat account made about $19,000. And that's YouTube ad revenue, all streaming services, various other kind of like rights based things that exist. Like I got really good in 2020 about like hooking in every single last dollar that my songs can earn. There's so many of them. And you kind of have to like, I gave up the small piece of my publishing because I have a publisher who like, who gathers all of that together for me. So anyway, that's like $19,000 in a fiat bank account versus the EFAT we made was $258,000.

Nicholas: Wow.

Jonathan Mann: Total of 94 EFAT we made in 2022. So, you know, it's not nothing. I mean, $19,000 is like, is definitely not. I mean, that's, that's a few, that's a few, it's a few EFATs. But the main point is like, like all of that is the DAOs. It's the DAOs to do with what it will. And ultimately, I am obviously very much in control and driving the ship, but we do put things up for vote. And I follow the rules and I follow the sort of the guidelines that I set up in the bylaws of the DAO and how that all works.

Nicholas: On this other podcast, you mentioned, you know, part of it is not just about collecting the revenues from say Spotify or what have you. But if somebody is inspired by the music and, you know, is going to place it in a movie or something, they could be compensated for doing that work, which would obviously be generating a lot of revenues for the DAO itself. Totally. If they were to be compensated, would they be compensated in stable coin, ETH? or are the only tokens in the DAO, the songs themselves, or is there another measure of stakeholder in the co-op?

Jonathan Mann: So we haven't totally figured out how exactly this works yet. But in co-ops, there's and my wife is listening, so she's going to be laughing at me because she knows how little I actually know about all this. But there's something called in the way that legal co-ops are set up, there's something called qualified patronage and unqualified patronage. And as far as we understand, basically what qualified patronage is, is money. So the co-op votes to do some kind of distribution of the treasury and they want to do it as a qualified patronage dividend. That is just money. So in our case, that would probably just be ETH. There's several of our co-op members who have done the kind of work that would qualify them for the qualified patronage dividend. And we would vote and we would figure out what percentage everyone gets and we would give that to them. There's also something called unqualified patronage dividend. And what that is, again, as far as we understand, is more in line with like the actual equity in the co-op. So again, you know, we would come up with the percentages and who gets what and who did what work. And so that is what I imagine what I would want to do. if someone, well, I don't know, I, we don't know how this is going to work yet. You know, if I imagine someone saying, coming and saying, hey, you know, we want to put this in Marvel movie or whatever, that would be very nice. You know, I have there. Yeah, exactly. Exactly. Then, you know, the first step basically, in my mind would be get them a song of the NFT, sort of get them into the Dow, you know, have that all set up. And then in proportion to like how much the Dow makes, I would want to pay them through this unqualified patronage thing of like, OK, now you own a stake in Song of Day. We brought you into the fold. Like. I would want someone like that to be like in the team. And we have the mechanism for doing that. I think we can represent that, that unqualified patronage as some kind of token. But I don't know that we need to necessarily. It's more just a percentage that we would need to keep track of.

Nicholas: And where is it to do that? Where is the co-op based? And what was the process of working with? I know you had a lawyer you were working with when you first launched the project. What was that like? What firm is that? Or if you're willing to share. What was that process like?

Jonathan Mann: Yeah. So it's based in Colorado because Colorado is the Delaware of co-ops.

Nicholas: So it's or not even a straight co-op?

Jonathan Mann: Straight co-op. It's called the Limited Cooperative Association, LCA. And if you were going to start an LLC, like everyone does their LLCs in Delaware because Delaware is like has good tax things. And like that's just so. but Colorado is like the place to do a co-op. And we worked with I don't know the name of their. what is the name of their law firm? It's just Jacqueline and Yev, these two awesome lady lawyers who they put together ETH Denver's co-op.

Nicholas: Oh, cool.

Jonathan Mann: And I guess their company is called Launch Legal. I don't know. Maybe Launch Legal is just the. I don't know. Anyway, yeah, they put together their co-op and I think we were the second one that they've done as sort of a co-op down situation. And they've done a few more since then. But they're always happy to talk to people who want to set up co-ops. So if anyone's interested, I can definitely.

Nicholas: Yes, I have them on a future episode to get into the details.

Jonathan Mann: Oh, yeah. No, they love to talk about this stuff.

Nicholas: I'm glad because most people are afraid to talk about this stuff. So it's.

Jonathan Mann: Oh, no, like they're all about it. Yeah, yeah, there is like dows and co-ops. There's a lot in common, obviously.

Nicholas: Totally. So I want to jump to talking about the GBM stuff as well. Yeah. More about what the Dow gets up to with its proposals. But before we do that, I'm very excited. for the first time ever. We have a sponsor for Web 3.0. As a little experiment, I've created a five second Galaxy Brain ad spot NFT on Juicebox. So if you go look up Web 3.0 Galaxy Brain on Juicebox or click around my Twitter, you can find it. And for 0.02 ETH, you can purchase five seconds worth of advertising. And we have our very first sponsor this episode, Aeolian developer from Peel Dow, who do the front end to Juicebox has bought this ad. So I'm going to read it out now. Hey, developers tired of using EtherScan? Try EtherFunk.io, the new way to interact with smart contracts on Ethereum. With faster and more intuitive features, EtherFunk.io is the ultimate tool for Ethereum developers. Check it out now at EtherFunk.io. And I'll take an extra second to say I was involved in the genesis of EtherFunk as an idea and Aeolian really knocked it out of the park. EtherFunk is very cool. The main feature of EtherFunk is that you can share a link that pre-fills the inputs for sending a transaction to any contract on Ethereum. So if you're familiar with EtherScan write tab and you like interacting with contracts, sometimes directly without any kind of website, just through EtherScan, EtherFunk is just like that, slightly cleaner interface. And what makes it extra cool is that you can share a link with pre-filled inputs for all the different functions you might want to share. So I use it all the time. It's very useful. So check it out, EtherFunk.io.

Jonathan Mann: I'm looking at it right now. I have to say this looks really cool. I think the world of sort of automatic contract website is super ripe for things to exist. Yeah, I like that a lot.

Nicholas: Awesome. Hey, who knew you pay 0.04 ETH and you get a Jonathan Mann endorsement. That's pretty good. So, okay, so let's jump to talking about the auctions a little bit and the GBM mechanics. So maybe we could just run through. the basic mechanic is a song a day. It's the latest song that you've written. It's today's song or yesterday's song. How does that part work?

Jonathan Mann: It's always today's song. It's always the day I write the song and then I tokenize and then I set it up for an auction. And we used to use Zora just has its own sort of open source auction system that you can use. And that's for all of last year. That's what we've been using. And then just recently this year, we switched to GBM. And I'm super bullish on GBM.

Nicholas: So I have to ask, so is there a batch of songs in the middle that have not yet been minted? That have not been auctioned?

Edouard Bessire: No, no, no.

Jonathan Mann: Every single song a day has been tokenized and exists as an NFT.

Nicholas: Okay, so up until when you launched the site, those were sold through some other mechanism. Because I mean, there were many days to make up for. So how did you make? Yes.

Jonathan Mann: So the way it worked was I did year one in March of 2021. I did year two in May of 2021. And then I dropped years three through 13 on December 31st of 2021. And so that caught me up so that on January 1st of 2022, you know, January 1st of last year, I started auctioning off each song daily. And so every song from last year got sold as an NFT. And then starting this year, we added in the extra feature of GBM.

Nicholas: Out of curiosity, how did you sell the like, whatever it was, 12, 13 years worth of songs? Were they fixed price? Were they auctions as well?

Jonathan Mann: No, those were fixed price. There was a, you know, when you went to songaday.world on December 31st of 2021, you saw, you know, just like any other NFT mint, it was for 0.2 ETH. And you just went there and you saw that and you could mint up to five. I think that was the limit. So it's sort of a normal NFT mint.

Nicholas: Abnormal in the sense that you could pick any one. Most of them you just.

Jonathan Mann: No, no, you got them random. It was a random mint, just like you would with a PFP or something.

Nicholas: Got it. So fast forward to this year, the transition to the GBM mechanic. And it's cool that the Raid Guild site and with the dev support from the DAO, you're able to integrate GBM without having to change everything. That's really awesome.

Jonathan Mann: Barely had to change anything, actually. Like, you know, as you can see on the site now, like added a few features of the important bits of GBM where it tells you you can enter in an amount into the little space and it tells you how much you will get back if you bid. And Edward, if it's OK, I'm just going to go ahead and just like show that out of this here. But the folks at GBM, they did so much work. You know, it sounds simple, this idea of like you earn money every time you get outbid, but it's actually really like mathematically complicated because the money basically essentially comes from whatever the ending price is. Right. So you don't want to end up in a situation where the person doing the auction doesn't end up with any money. So there has to be like all of this crazy math that happens to make sure that like the amounts are correct. And the way that it works is the higher you bid over the current bid, the more you will make back when someone outbids you. And that's the sort of mechanism that encourages people to instead of bid just in small increments, encourages them to think about, well, wait, like either I need to think about, well, what? what do I think is it's a little bit of game theory. What do I think the top price for this will be? or what is the top price for which I will pay for this? You know, that thing in that you do in eBay where the bids are max bid and they're but they're hidden in that instance. Right. But you put in, you know, I'm willing to pay. Ultimately, I'm willing to pay $200 for this copy of Nintendo Power from 1994 or whatever. And in that context, that's your max bid. This sort of incentivizes the same thing. If you actually want the NFT, which is one reason to bet on the NFT energy system, the other one being you want to try to gamble and try to make money based on what you think other people will do it. But if you want the NFT, then you want to as soon as possible bid your highest bid, because what that means is that if you get outbid, you will get a good chunk of change. Right. So if you don't get outbid.

Nicholas: If I anticipate that an NFT is started off, there's no bids. And I know in my heart, this NFT is going to sell for at least an ETH. It behooves me to bid point nine nine nine nine ETH because I'm correct. Something on it rather than if I just wait for it to hit that one ETH.

Jonathan Mann: I am or point five. You know, your max, you know, let's say let's. you know it's going to sell for an ETH, but you're like, fuck, I can't spend an ETH. I would be willing to pay point three for this. If you bid point three and then someone else bids an ETH, I think then you would get like point oh three back just for bidding point three.

Nicholas: Right. It seems to be 10 percent. So, Edouard, tell us about this. We've hamfisted our way through it enough. Tell us more about the mechanic and what the math is behind it.

Edouard Bessire: Yeah, you guys are explaining it pretty well. As Jonathan was saying, basically, the return function is what you get back is a percentage of your bid and that percentage varies depending on how much your bid is compared to the previous bid. There's a percentage that's changing. So if you bid a lot more the existing bid, your percentage return is bigger than if you bid like just a small increment. And so these different presets, they need to be carefully crafted because, yeah, you need the option to be fully funded. You need the returns to make sense and also for it to make sense for the seller, because at the end of the day, the most important person here is the seller. And the GBM is all about getting the right price discovery for that seller.

Nicholas: Is there a name for what this is called, the kickback that the prior bidder gets when they're outbid?

Edouard Bessire: We call it an incentive.

Nicholas: Incentive. OK, so is there like if you give too high an incentive, what you're saying is then you're kind of biting the original creator of the NFT because that's that's. if they're not getting.

Edouard Bessire: Exactly. It's coming out of the winning bid. So you want to have the right balance of something that is creating really exciting experience for the bidders and helping price discovery without giving too much away, basically, of the final bid to bidders, because at the end of the day, it needs to be worth it for the seller. And if we're calibrated, you have something amazing where everyone, you know, when you have these auctions, the moment you have this auction starts, people come to place a bid as soon as possible, because in most auctions, like in the English auction, the problem is that you don't have usually enough bidders. You can have enough activity and some auctions, you know, get no bidders at all because there's no real incentive for you to come early in an English auction. Most of the action happens at the end. Right. So here with the GBM auction, you completely flip this over and now you have an auction where a lot of the activity happens right at the beginning because everyone is there. It's like an event. You know, when we do big drops, we've done drops with one of our clients, our partners which is this cool game on Polygon, like Tamagotchi on the blockchain. And they've been working with us for since 2021. And we've done drops with them with like, you know, 12,000 auctions simultaneously, all going live at the same second to like land and sell like characters, wearables. And you get like the entire community like ready for it. And the second it starts, you know, people have been live streaming it. You get like beats everywhere. People being outbid in real time, taking part in like five different auctions. So you get like really, really big excitement from this. And at the same time, everybody wins.

Jonathan Mann: There's people who made like real money, who made real money just by bidding. Yeah. You know, who gambled, but they made real money just by participating in these Abagachi auctions going from thing to thing and being able to sort of read the room right and bidding in the correct way, which I think is just amazing.

Edouard Bessire: I mean, yeah, like there was a guy where we were at NFT NYC last year in New York on the first day where we're queuing to get our pass, we were wearing the GBM swag and there's this guy that just comes to us and you queue and says, Hey, you're the guys from GBM. I booked and I paid for my flights to come from South America to New York to attend NFT NYC using money that I earned from placing bid on some Abagachi. Like that was so cool.

Nicholas: That's very cool. So I'm looking at it now. So for instance, NFT just went on sale. Current bid is 0.035, five bid 0.1. The site is telling me that I'll get, if I'm outbid with my 0.1 ETH bid, I'll get 10% of that back as a reward, an incentive. And it seems to me that no matter what value I put in, it's 10% that I get back. Does it depend on what the bid that I am outbidding is at that percentage or is it fixed 10% on SongaDay?

Edouard Bessire: No, it's definitely not fixed because the mechanics needs to stay the same. Like we have different versions of the presets. So that sometimes we have presets where the maximum we can get is 5%, sometimes 10, sometimes Here, what SongaDay is using is what we call our medium preset is the one we usually recommend for drops. And so if you try to put the minimum bid that you next bid that you can do, or a bid that is very, very close to the existing bid, you'll see the change. You'll see that maybe you'll get only 1% return or 2% return.

Nicholas: Right. So the current bid is 0.035. If I do the minimum bid of 0.0385, then I only get 1% back. But if I do a little bit higher than that, it goes right to 10%.

Edouard Bessire: The way it works is if you double the existing bid, that's when you reach the max percentage return. So we get 10% return if you at least double the current bid.

Jonathan Mann: And you can really appreciate the complicated math when you see this. I keep trying to get these guys to release this spreadsheet, which is proprietary information, which I realize you don't want to. But I love it. It's just this thing of beauty because it looks so complicated to me. It sort of shows all of the math that goes into figuring out like this 5% back, 10% back, 15% back, 50% back. You know, it's called like the D-Gen version where you can imagine a version of this where you get 50% back. If you do this D-Gen version, it's super fun. It's just like you can mess with all these different modes. And yeah.

Nicholas: It feels like a savvier version of Zora, the original Zora mechanism where they had this idea that you could earn a sell-on fee if you, if I sell it to you and you sell it to somebody else, then I could still get some revenues from that. Yes.

Jonathan Mann: Like a curator, a curator thing. Yes. Totally.

Nicholas: Like if I'm able to sell it to Kanye and then Kanye has increased the value, but maybe Kanye is a bad example these days. Somebody else. Let's go for someone safer. George Bush. If I sell it to George Bush.

Jonathan Mann: Michael Bolton. Yeah.

Nicholas: Perfect. Perfect. And they, by dint of owning it, increase the value, then I should be compensated for having made that possible. Not just them for having been famous or something like that. This is even cooler because you're incentivizing people to participate in these auctions, which have this problem. you've pointed out that people don't like to participate until the end. If I feel like I can predict what the ultimate sale price will be, I should bid as close to, but under that, assuming that I don't want to own the NFT myself.

Jonathan Mann: And that's, that's like, I feel like the real unlock is. it's a way to sort of play on something that is seems at least at this point for better or worse inherent in crypto and specifically, you know, crypto in general, NFTs, which is play DGNs against collectors, I guess is the way to put it to, you know, for the artist's benefit to maximize revenue for the artist, which is what we all want to, you know, which supposedly is what we're all trying to do here. But yeah, you have DGNs are going to come in and think about it one way, and you hopefully have collectors who are going to think about it another way. And I, that's just really great. It's just a really great mechanism.

Nicholas: It also reminds me a little in the illustrator community, they have this practice of giving the list, an illustration on foundation or super rare, and then they will give stickers, which are sort of smaller NFT artworks to people who've bid in order to encourage them to participate. Obviously, it's a little bit less financialized, but similar kind of rewarding people for participating in hyping it up through actual on-chain participation in the auction.

Jonathan Mann: I don't know if this ever happened, but I remember seeing a Nouns proposal very early on. It was like trying to give co-ops to people who had bid on. Did they ever enact that? Is that a thing that happened?

Nicholas: We have Sasquatch in the audience, who's from the Nouns community. Maybe Sasquatch can let us know with an emoji.

Jonathan Mann: You know, which I love as an idea. I don't think that GBM, I think, could work really nicely in tandem with that. Almost could work really nicely in tandem with a situation like that, a co-op type.

Edouard Bessire: Because all the incentives are on-chain, so it's quite easy even after the auction to send people co-ops with exactly how much they earned when they bid, when their bid was for each auction.

Nicholas: So, Edouard, what does Abigachi use, for instance? What do you call this number, like the maximum incentive percentage?

Edouard Bessire: I call that like a preset, basically, because it's like a bunch of different values that need to go together.

Nicholas: And is Abigachi further on the Djan scale?

Edouard Bessire: So it's a mix, actually. So because we've done like many, many jobs over the last year and a half. Most of the jobs they've done with these medium presets, that is also the one that Sondre is using. We've also did a couple of jobs which were really big, where we mixed it up. So we had low preset and high medium and some Djans. And then we looked at the data to see how people behaved with this. And actually, even in it, we mix some English auctions, so like with no return on bidding. And then we compare them to see how people behave, what the prices that were realized. And actually, we have like this massive empirical study that showed how the power of GBM, showed that GBM was better on every metric that we could measure almost against a traditional auction.

Jonathan Mann: Did you find that the Djan, that a higher return made a huge difference? Or like, what did you find on that front?

Edouard Bessire: So definitely there was a correlation with the higher the presets, the higher the prices. The Djan was a bit more difficult because the only NFTs that we put with the Djan, were NFTs that were very specific token IDs. And so basically we didn't count them in our study. We only counted low to high. But yeah, what we saw is the higher the presets and the return, the faster people bid, the higher the first bid are and the final bid and how much money the seller makes. So of course, there's definitely, in my opinion, a limit to this. Yes. You know, even for the Djan, we didn't go too crazy. Like for me, there's definitely a limit to how far you can push this while making it still valid and valuable for everybody. So I'm very conscious not to push the thing too hard.

Jonathan Mann: Push the limit too far, yeah.

Edouard Bessire: But definitely, like it's been really amazing the data we have on this. And Avogadro, they've implemented GBM for their marketplace for secondary trades. So now if you go on the Avogadro GBM Auction House, people are actually listing wearables for sale for the community. And so they are basically now GBM auctions at any hour of the day for many different types of wearables.

Nicholas: Very cool. Very cool. I wonder if that would apply to Songaday too for a secondary market.

Jonathan Mann: Yeah, yeah. We've definitely, now that we've implemented it, we've definitely thought about it. And I also, hearing this makes me think like basically the way that it works on my end, when I mint every day is I have this backend that was originally created through Raid Guild that allows me to mint every day. And I, you know, basically where I take the song, I tokenize it. I can get the hash of the song and the video. And I tokenize all that. And that's what I mint to the blockchain. And then I have another page on my little app that I use, a little custom app, where, you know, I start the GBM auction. This makes me think that maybe, you know, one of the things I'll have my devs build in is the ability to choose, to choose the, the level, the level at which, you know, so sometimes we'll go up from 10%, we'll put it at 15%. And then, you know, maybe for certain songs, sort of like you were saying, Edward, we're like for certain songs that sort of make sense for, for like a real DJ kind of song, maybe I'll put it up to the DGN level. Like that would be really fun for me, for me each day, a fun thing to try to play with.

Nicholas: It makes me wonder if, if you want to increase the preset and make it more DGN for ones that you anticipate will be more popular or less popular actually, because it's incentivizing participation, right? But at the same time, you want one that's going to achieve a high max bid. So there's more room for people to be counterbidding one another.

Jonathan Mann: Exactly. Yeah.

Edouard Bessire: One thing to think about is basically one of the things that for me, we help in the decision of how high or low you need to go with presets is how liquid or illiquid an asset is. Like GBM is, GBM is really, really good for pricing assets that are illiquid. Right. If you know exactly, if everyone knows exactly how much an asset is worth, right. Then first of all, you don't really need an option in first place, but then GBM, the G auction wants to be that superior to other mechanisms. And so if you have, for some good days, you know, it's art and every day is different. But yes, you want all of the example of, of another job or some types of wearables, you know, with Avagochi, if you have something where the price is very well known or pretty known, then you should go with a lower preset because the price is already some idea of what this is worth. And so you don't need to incentivize as much. Yeah. And so the more unique something is in the list, anyone has no idea what is worth, the higher you can go on that presets.

Jonathan Mann: See, I think in that way, it makes, that makes me think like a, just a typical song that a song that doesn't have any kind of like hook to it or like, it's not topical in any way. You know, the price for that is relatively known. And so that's why we'll stick with like the medium, but I, with a song, like if I were to make like a fucking eight game song, whatever, I would put that at really high because something like that is slightly less for sure. You know, it seems like there's more uncertainty around like how much someone would be willing to pay for something like that.

Nicholas: And why are you, are you developing like resources for people who want to implement GBM to think about this strategy? or how do you, how do people learn how to do this?

Edouard Bessire: Yeah, for sure. So definitely what we offer with our partners at GBM is not just good, but of course, all of the know-how that we have, we are like, you know, experts on price discovery and auction theory and game theory. And so we help projects that implement with us on deciding how they should use the system to make sure that they avoid any classic pitfalls, because it's very easy to, you know, one or two small mistakes to completely change the dynamic in your drops. And so it's very important to get it right. And so we advise and consult with our partners for that. We give them an idea, you know, we should use maybe this preset or this is what we recommend. And we work with them because every partner is different. And we, over time, working with and getting all these questions, we've kind of started having some documentation. We have some implementation guides. This is trying to explaining what GBM is, how it works. What are the key components to get right? You know, one of them, for example, is the fact that you should not have a minimum first bid. So basically because of how powerful the GBM auction is, you don't need to start the bidding at like, oh, it needs to be at least 0.1. You can start the bidding at zero and the auction works really well. And the beauty is because you start the bidding at zero, that means anybody in the world can take part. And what's very important in auction is the number of people you have that are excited, that are there at the beginning. And so with GBM, you get as many people as possible to be there at the beginning. And anybody can bid. So you show you have these kind of a new middle bid, you know, it needs to be $1, $10 worth, but you don't need any minimum bid. Any minimum bid actually is going to prevent some people from taking part.

Nicholas: And the activity is more valuable than the minimum bid.

Edouard Bessire: Yeah, and like with Aragochi, I've seen auctions go from zero to $20,000 in four bids or three bids. The data shows that you don't need a minimum first bid as long as you have the proper, you know, the proper mechanism and that people know the auction is happening and that is actual demand. Then you don't need a minimum first bid. If you try to set a minimum bid, you actually kind of signaling to the market. You know, we don't want to do that. You know, if you put your first bid, you say, oh, the first bid has to be at least $100. And then I'm looking at this and I'm like, this is not worth $5,000. If you give me a minimum bid and you're 100, you know, because that's how your auction houses do it. You know, usually the first bid in an auction house like Christie's or Sotheby's is like 30% of the lower estimate for an item. So because of this rule, people, even if they don't exactly know the rule, when you see, when you have like the bidding starts at X, that gives you an idea of what this is worth already.

Nicholas: Calibrate.

Edouard Bessire: So the idea of going as zero is it's a clean slate.

Jonathan Mann: Clean slate. Yeah, totally.

Nicholas: Before we run out of time, there's two other topics I wanted to ask about. One, which we've kind of hinted at is royalties. Jonathan, do you, do you current NFTs have, I guess, ERC 2981 style royalties on them?

Jonathan Mann: Yeah. Yeah. 10% and it goes to the Dow.

Nicholas: Very cool. And have you given any thought or are you aware of the open sea operator filter discussion that's happening right now?

Jonathan Mann: Yeah, I, I mean, I haven't thought about it too much other than I just like, I think that marketplaces need to pay people the royalties. Like, I just think like if an NFT project has the royalty set, like it's pretty dick move to not honor that regardless of being able to or not. But as far as I haven't gotten too deep into like utilizing any of the different tools that exist now to sort of blacklist or anything like that.

Nicholas: I'm curious if your contracts would be like upgradable to include that stuff.

Jonathan Mann: I don't think they, I don't think they are upgradable in that way. So I don't think I could, even if I wanted to, and I don't know that I would, I don't know. I, I wish this was not an issue, frankly. I just wish that, that marketplaces would just pay people what they're asking.

Nicholas: Yeah. Yeah. It's interesting because it will make the NFTs somewhat DRM'd.

Jonathan Mann: Yeah.

Nicholas: Which is kind of what we're trying to get away from.

Jonathan Mann: Yes, absolutely. No, DRM is such a dirty word in my, in my vocabulary.

Nicholas: Yeah, same. Okay. So that's, that was one. And the other question I had was, so if you go to sangadao.org, you can see the, it's a discourse, right? Sort of forum for discussing DAO proposals and DAO matters.

Jonathan Mann: Yes.

Nicholas: I was curious, what kinds of things does the DAO vote on? What are the proposals? And also maybe you could talk a little bit about the one person, one vote mechanism with BrightID, if you're still doing that and how that's working out.

Jonathan Mann: Yeah. So we started out with basically all snapshot votes. And the way that we did it is we are actually the first, we created the very first snapshot instance of linking your Ethereum address to a BrightID account for the purposes of verifying that you are in fact a single human to do these snapshot votes. So that is how we now vote. We started out doing all of them. What we did is we've sort of tiered our votes where a lot of other DAOs that I'm in for sort of smaller votes, we do what's called emoji consensus, where, you know, if it's, I think the thing we have is if it's below five ETH, we just do it by emoji in the voting channel in the Discord. But if it's over that, then you do have to in fact connect your wallet and you have to be BrightID verified and only one person at a time can do that. That's all in snapshot. So it's not like a weighted voter thing. It's not like you have tokens and you can use a bunch of tokens. It's you are one person and you are just voting once for a thing.

Nicholas: For people who aren't familiar, the only time I've ever interacted with BrightID was for Gitcoin donations. And the reason they use it is to limit Sybil attacks on their matching round. So to avoid, because they do quantitative funding, or not quantitative, quadratic. The number of people who are supporting a project has a direct relationship to how much of the matching round is associated with that project. And so they don't want people gaming that system by using multiple accounts to vote for the same project or to make a small donation to the same project to affect the matching round. And so they verify identities with proof of humanity or BrightID. BrightID, I think, if it's still the way it was when I tried it, you basically go into their Discord and do a video call just to say hello and prove that you're a person. I'm not sure how Sybil resistant their whole process is really, but it's something. And I'm sure for Songidao, at least thus far, it's probably pretty good.

Jonathan Mann: Yes, exactly. It's like, it's the kind of thing where it's like, if you really, really, really, really, really tried, you could break it, but it would take enough effort. And it would be enough effort to do it like enough times, especially with something like Gitcoin, where it would be way too annoying to break it enough times to make it worth it. You know, if that makes sense.

Nicholas: So far.

Jonathan Mann: So it's like, yeah, yeah, yeah, exactly. But, you know, so, so, yeah, it's a really nice, it's a really nice solution for that.

Nicholas: I'm sure you've seen the videos of East Asian, like World of Warcraft, I'm sure.

Jonathan Mann: Well, this is the thing of. this is the thing of like, why, why, you know, showing up and showing your face, like why that work? Because you have to show your face and.

Nicholas: Hopefully they recognize you if you show up twice.

Jonathan Mann: Well, that's the thing. They have ways they have their ways. We'll just say that.

Nicholas: OK, got it. Yeah. So so the one person, one vote, regardless of how many NFTs you hold from the Songidae collection has been working. Correct. And how how much governance goes on?

Jonathan Mann: Yeah, most of the governance, it seems like at this point is in treasury distributions and it has to do with paying for things. So do we want to implement GBM and do we want to do we want to pay our dev? You know, he writes up a proposal and we want to pay him to implement it. That, you know, most of the things that we're voting on have. some are some flavor of that of that basic sort of setup.

Nicholas: Cool. And have you found it's working well? or what's the experience of governance like?

Jonathan Mann: Yeah. Yeah. You know, it was difficult. The reason we moved to emoji consensus for smaller things, right, is we found just like many other DAOs, it's like we sort of set the bar too high and it was like so hard to be whipping the votes like every time we wanted to do something like, oh, come vote, come vote. And it's just so much easier to just do like these little emoji things and set the thing a little bit lower. And we only really need this many people because it's like who this. this is the number of people who are really actually super active in the DAO anyway. These are the people that care. These are people that actually like are going to show up. So that's sort of where we're at now. So, yeah, but but yes, once we moved to that, I actually really enjoy it. You know, it makes it really makes me feel like we are. we are in this together. You know, we are actually making decisions as a group.

Nicholas: I'm curious, do you think that you would have the same kind of developer support for maintaining and expanding the site without the DAO?

Jonathan Mann: No, I don't think so. I mean, it's hard to say, but like I think that like the devs that are that came on, came on as a result of like coming into the DAO and then just showing up. And I'm not sure that would have happened without, you know, weekly meetings with the DAO and setting up the DAO and, you know, framing it in this way of like, we're all doing this as a group. I can't say for sure, but I definitely I definitely feel like that, at least to some extent.

Nicholas: Very cool.

Jonathan Mann: Yeah.

Nicholas: One last thing on the site, you have a tab in the nav bar for Songa Dex. Yes. Maybe could you tell me a little bit about that?

Jonathan Mann: Yeah. Songa Dex was an idea inspired by a wonderful project called Song Camp. And Song Camp was this really great project. If you go to chaos.build, you can see Song Camp's last project, which is still minting and still has things to sell you. So it's really great. And in their conception of this, basically, you would buy these packs of these songs. You would buy a pack and inside the pack would be four songs. And there's 88 songs total. And the goal was essentially to collect all of the songs. And they have this really nice little like visualization of like, here's the songs you have and here's the songs you don't have. And it really tickled my thing, the natural thing that we have as humans of like wanting to collect all of the things. So when I saw that, I was like, oh man, I love that so much. How can I, how can we implement something similar with Songa Dex? And so with Songa Dex, rather than it being based around collecting, obviously you can't collect all the songs because that would be impossible. We base it around traits. And so we set up this thing called Songa Dex, like a Pokedex where you were trying to collect as many traits as possible. I manually sort of went through, and this is something we did with the DAO too, is we sort of came up with the categories of what we thought would work, manually went through and like decided like what the different tiers would be, you know, common, uncommon, rare, the different traits. And then we set it up so people could connect their wallets and it would, you know, populate each tier, common, uncommon, rare, legendary, et cetera, populate each tier with the songs that they own. And they could see which ones they have and which ones they don't have. And they could collect a Po-App for each level that they've completed, each tier that they've completed. And then the grand prize for collecting all of the tiers, all of the traits, was the idea of me, I would go to wherever you are in the world and, you know, create a custom song for you in person if you collected all that. And actually just like last month, a gentleman called Arththonic, who's a really great NFT artist and developer, does a bunch of stuff on Artblocks, made the very first ever on-chain music NFT. He was the one to win it. He was around when it launched and he like very fastidiously like kept an eye on like which traits he was missing and which traits were up for sale. And he ended up collecting all of the traits necessary to complete the song index. And he's up in Montreal. So at some point I'm, we're sort of planning a trip to go up there and he apparently is going to have me sing a song for his wife. So that'll be very nice. And we're going to do sort of version 2.0 about for this, like once, once I've completed that and hopefully we'll come up with some new and improved things to go along with it because we definitely learned a lot from the first round of doing it.

Nicholas: I think this is such a smart idea. It's easier to understand if you go. take a look songaday.web.com slash songadex. But basically there's sort of categories like say the first one is very common traits. There's poetic, acoustic guitar, Jersey City, pensive and shadow. And so if you have, I guess one of those is enough to complete that. or you need one of each one?

Jonathan Mann: One of each trait. Got it. And those are very easy to get. Those are very easy to acquire an acoustic song, a Jersey City song. Those are floor songs as it were.

Nicholas: Got it. And then as you, as you go up these tiers, there's more and more rare things, harder things to get. I was going to say, it's funny that the, our Sonic is in Montreal because so am I. And I was looking at. legendary location is Montreal. I'm curious if you click on it there, it links to gem and all the listings for the NFTs that match that trade. And unfortunately there's none from Montreal listed. So I think this is a pretty difficult competition to win.

Jonathan Mann: So in the legendary realm, we're down to like any of those legendary traits. There's only like one or two or maybe three NFTs that exist in that realm. So it's really difficult to acquire those. Yeah.

Nicholas: Wow. We got to convince you to do more legendary moves, horny, drunk, or embarrassed. We need more of that. Yes.

Jonathan Mann: That's if it ever really caught on, that would be another sort of section of part of it that I hoped and that I, that I think would be really cool, which is it would have definitely encouraged me to, to do some of these more songs with these rare, you know, with these rare traits. In fact, I think for our Sonic, I may have, you know, he was like down, like he needed one last thing as I made a song specifically just so he could complete it, which is really fun.

Nicholas: I love that. And it's great. It brings you closer to the collectors and vice versa, and is also inspiring for future work and also kind of pumps the, the auction activity like GBM makes a lot of sense.

Jonathan Mann: Exactly. Yep.

Nicholas: All right, Edouard, Jonathan, thank you so much for coming through today and explaining all this. I learned a really a lot, not only about the project, but just about NFT sales and thinking about how to incentivize the right kind of behavior. This was a really informative. We win.

Jonathan Mann: Everybody wins.

Nicholas: Whether if you'd like to point people at anything online or anything to check out.

Edouard Bessire: Go ahead, Edouard. Oh yeah. I mean, any project that, you know, wants to drop an FTS or even for the marketplace or the users to, to resell the assets, definitely comment off to us, you don't, which are gbmauction or our website is gbm.auction. And yeah, like amazing prices, you know, great for the community. Like we have a, we have a, we've done more like more than $200 million in bidding volumes so far in the system with the different partners that we have. So yeah, it's battle tested and exciting. So please, anyone that, that is looking for this for price discovery, come to us. We'll be happy to, to work with you.

Nicholas: Do people have to already have an auction set up? or if they're just selling NFTs, like fixed prices, is it too early to talk to you or would you still be?

Edouard Bessire: No, no, no, no. Like, I mean, even before you sell anything, you, you should talk to us. I wish he came to us because they did their first drop, which was six priced. And when they realized like the, surely it was sold out, but many people, you know, missed out and the community was not happy with the way the fixed price were. because of course, in fixed price, if you undervalue your items, you get a gas war and you have bots and flippers. And so the project also misses out on revenue and many people that wanted to participate, didn't went home with nothing. And so they, they came to us after their first drop, implemented the GBM and they've been using, using us for all their drops ever since. So, yeah, as soon as people are already thinking about dropping and they should go and talk to us, of course, the earlier, the earlier, the better. Yeah. And also, I was just wanting to say, you know, like I'm very excited for the, for the future for GBM with Song of the Day and Jonathan and, you know, we were talking with Nikola about all the cool stuff that you've put on, on Song of the Day and on Song of the World. For me, like that's the, that's what happens when you, day after day, year after year, you're always looking for new things, new way to improve, to innovate. That's how you, you found us and decided to, to implement GBM. So I'm very excited for what's the future for Song of the Day as well and what we can do together.

Jonathan Mann: Well, I appreciate that. And I feel exactly the same way. We didn't even scratch the surface of all the amazing things that Edward and his team have also put together and similarly have spent, you know, since 2017, just like constantly doing new and interesting things in NFT. So it's, the feeling is definitely mutual. If you want to, you know, see anything having to do with Song of the Day, the two best places are Song of the Day.world. and then, you know, Song of the Day Man on Twitter, as you can see here, I'm always on Twitter. I always tweet.

Nicholas: Two N's at the end for any recording. Yes, it's true. We didn't get into some of the prior history of GBM and where the idea came from, but maybe in a future episode, we'll have you back to talk about more, a mechanism that was in the making for a long time and built on the same kind of learnings. Okay, great. Thank you both. This was a wonderful conversation.

Jonathan Mann: Thank you.

Nicholas: Hey, thanks for listening to this episode of Web3 Galaxy Brain. To keep up with everything Web3, follow me on Twitter, at Nicholas, with four leading N's. You can find links to the topics discussed on today's episode in the show notes. Podcast feed links are available at web3galaxybrain.com. Web3 Galaxy Brain airs live most Friday afternoons at 5 p.m. Eastern time, 2200 UTC, on Twitter Spaces. I look forward to seeing you there. Thanks.

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