AvatarDAO: Music NFT Trading Platform and All-in-One Application Muverse Project Research Report

Author: AvatarDAO

I. Background

1. WEB2 Music Industry

The WEB2 music industry refers to the traditional music industry, including record sales, music television stations, radio stations, etc. Over the past decade, the WEB2 music industry has shown a rapid growth trend globally. The rise of well-known music streaming platforms like Spotify, Apple Music, and Tidal has greatly changed the way people access music. These platforms have won a large number of users and market share by providing high-quality music services.

According to statistics, the global music market has reached a scale of over $200 billion annually, with music streaming accounting for over 50% of the market share, making it the leader in the music market. However, there are some issues in the WEB2 music industry. Firstly, musicians' earnings are low because record companies and copyright intermediaries take most of the profits. Secondly, there have always been issues with music copyright protection. Traditional copyright protection methods are easily infringed upon, leading to damage to musicians' interests.

2. WEB3 Music Industry

The development of the WEB3 music industry began with the rise of blockchain technology. The decentralized and transparent characteristics of blockchain technology provide new solutions for copyright protection, music distribution, and music creation in the music industry. The WEB3 music industry utilizes blockchain technology to make interactions between musicians and users more direct, transparent, and secure. Due to the immutability of blockchain technology, music copyright issues have been better addressed. In the WEB3 music sector, some projects have already achieved preliminary results. For example, blockchain music platforms like Audius and Musicoin have greatly reduced the intermediaries between musicians and users through decentralized music distribution, increasing musicians' earnings.

II. Project Introduction

Muverse is a community-driven music NFT trading platform and all-in-one application that allows music artists, investors, and fans from around the world to participate in frictionless NFT trading. It offers users gamified interactions, investment, and income scenarios, including a rhythm game combined with a revenue model and an NFT exchange that provides ample liquidity for users.

By combining music with gaming, social interaction, and crypto-economics, the GameFi + SocialFi model allows artists and music enthusiasts worldwide to engage in various interactive scenarios provided by Muverse. It aims to enhance the connection between artists and fan communities through standardized rule settings and processes, enabling the community to discover and promote artists' development, facilitating mutual growth between artists and fans, and enjoying the substantial rewards brought by Web 3.0.

Official Website
Twitter

III. Project Analysis

Currently, the APP version 2.2 has just been officially launched, and the project is still in its early stages. The first music interactive scenario, a rhythm game similar to the previous Beat Master, has been launched. Users can experience it by downloading the APP, which allows for 2 energy points daily and 2 game experiences. To truly participate in the game, users need to hold a headphone NFT.

During the previous testing phase, this NFT was obtained through airdrops, through market activities, community collaborations, and staking quality project NFTs to receive the Genesis headphone airdrop. Regarding staking NFTs: designated NFT price + 100% exchange price, returned after 3 months. There are 9,999 Genesis headphones available for airdrop, and the Genesis headphones have been completely distributed. Other methods to obtain headphone NFTs involve purchasing them through the in-game market. Currently, all staked whitelist NFTs have been returned early, which is a good start.

Social media situation: The project's Twitter has over 10.1K followers, and the Discord community has over 2K members. Currently, players are mainly concentrated overseas and in Hong Kong and Taiwan, with relatively few players from the mainland. However, there are reports of slow collaborations with domestic teams. If the mainland market opens up later, the growth potential will be enormous, and the future development in the mainland region is worth looking forward to.

Additionally, it was reported that on October 31 last year, Muverse completed the sale of its first artist's music NFT work, Korean star Lee Hong-ki, within 1.5 hours, with a total sales amount of 120 ETH (approximately $200,000). On November 28 of the same year, American singer Lamar Casey, recognized by Akon, completed the sale of his first NFT music work "Winnin" with the support of Muverse in just 1 hour, with sales amounting to 20 ETH. This shows that the Muverse platform has rich resources and strong marketing and organizational capabilities.

Recent media reports have also noted the addition of the platform's new PFP design: The interactive music platform Muverse announced that it will collaborate with Yoshihito Akatsuka, the winner of the Best Art Direction Award at the Hong Kong Film Awards, to launch its new NFT avatars. The new avatar design aligns with Muverse's new market positioning and future development plans, marking an important step in the development of the Muverse platform. Muverse will gradually announce new avatar designs, replacement plans, and trading information on its official Twitter, @MuverseNFT.

Japanese art master Yoshihito Akatsuka is among the top 20 set designers globally and has served as a producer/art director for several internationally renowned films, including Kill Bill, Babel, Seediq Bale, The Flowers of War, and Journey to the West: The Demons Strike Back.

It appears that there is significant investment in both planning and design, which is also worth looking forward to.

The project is active, with high community participation and frequent interactions with players, primarily in overseas communities. The main recent activity is the bi-weekly Town Hall, where on February 22, CMO Adrian and Asia head Jina will update on Muverse's latest progress. Additionally, at ETHDenver 2023 on March 2, Muverse's CMO Adrian also gave a speech. During the April Hong Kong Web3 Festival 2023, a high-end invitation-only closed-door meeting will be held with a strong guest lineup, along with co-hosting AfterParty events. The project's promotion is proceeding in an orderly manner, positively impacting future development.

Moreover, the platform has passed SlowMist's token contract audit, ensuring high security.

IV. Roadmap

The Android version of the APP has been launched on Google Play, and iOS supports Test Flight. Currently, the roadmap's completion level is high, and everything is progressing step by step.

V. Partners

Partners include well-known institutions and NFT projects such as: FNC Entertainment / Invest HK / Syndicate Capital / Zonff Partner / AvatarDAO / Lumière / Slow Mist / 1783DAO / KaratDAO / WeirdoGhostGang / DuduLabs / C.C.C.C / DavaoDefi, and are continuously increasing and exploring different directions for collaboration. Notably, there is currently more collaboration with domestic teams, which is essential for opening the domestic market and is worth paying attention to.

VI. Financing Information

According to media reports, Muverse has completed a $6 million seed round of financing, with participation from Syndicate Capital, Knights Templar Capital, Zonff Partners, AvatarDAO, Sun Artland Ltd, and BN Blue Fox Limited. The funds raised will be used to expand the platform's functions and services, accelerate user acquisition, and enhance user experience. Muverse is developing its second phase of products, which will include a music NFT exchange, NFT fragmentation features, and AMM pools for its F-NFT / MCT trading.

VII. Team and Resources

Team: The Muverse team is distributed across Los Angeles, New York, Seoul, Singapore, Beijing, Vietnam, and the Philippines, forming a relatively international team. Muverse CEO Kent Huang has 15 years of Hollywood experience as a producer at The H Collective. North America and Asia market heads Adrian and Jennie both have years of experience in the crypto industry.

According to media reports, Hollywood producer Mark Rau has joined Muverse as COO. Mark Rau, as the CEO of The H Collective Europe, has participated in the production and distribution of films such as "Wrong Turn 7," "The Evil Child," "Wolf Warrior 2," and "Look Who's Back," and briefly joined the Social-Fi NFT game development company Element.black in 2021.

Other resources: Muverse has invited former AMPAS (Oscar organizers) chairman, former Lucasfilm, Marvel, and Paramount vice president Sidney Ganis as an advisor to assist in promoting Muverse in North America. There is also collaboration with Korea's FNC Entertainment.

VIII. Platform Gameplay

1. Revenue Model

There are three participation modes on the platform: users, artists, and collectors. Muverse has designed different revenue scenarios for different users on the platform.

Users can experience Muverse's first music interactive scenario, the rhythm game, and earn MCT token rewards through gameplay. The game has both single-player and multiplayer modes, and with product iterations, more features (such as leaderboards and note enhancement modes) will be introduced. To earn MCT through gameplay, users need to hold a headphone NFT. If they do not have a headphone NFT, they can purchase ETH on centralized or decentralized exchanges and transfer it to their Muverse wallet, then transfer ETH to the in-app wallet to purchase headphone NFTs on the market. (Note: Always keep some ETH in your wallet account for gas.) Once prepared, users can experience the game, enter the earnings homepage, select headphone NFTs, and start interacting with music to earn MCT. Recently, a feature to earn rewards by listening to music has also been launched, allowing users to earn rewards by listening to music in certain scenarios.

Artists can create and earn. After registering as a platform artist, Muverse will establish a web 3.0 music community for artists and their loyal fans, enhancing interaction between artists and fan communities, allowing fans to directly discover and invest in good musicians and music works. Artists can also initiate music parties, which are audiovisual feasts jointly initiated by artists and their loyal fans for the release and sale of the artist's music NFT works. By initiating music parties, artists can not only complete the sale of music NFT works but also expand their user base and community influence. Artists earn revenue by creating value for their music and earning from each sale.

Collectors earn by following Muverse's talent discovery mechanism, which provides opportunities to discover potential artists early, invest in them, and grow together with them. Discovering talent among artists is an important goal for Muverse, and to achieve this, Muverse will set up a good mechanism for artist talent discovery and growth, helping artists expand their fan base and influence both on and off the platform. After reaching a certain level of interaction with music on the Muverse platform, users will obtain collector status. Users with collector status can join music parties and buy or sell NFTs from their favorite artists during the parties. Winners will only be announced when songs are sold out, and the real-time NFT royalties for winners will be much higher than those of ordinary NFT holders. When an artist's music NFT is used in interactive scenarios within Muverse, real-time royalty earnings will be generated. Earnings will be distributed to collectors based on the number of music NFTs they hold.

2. Game Modes

There are two modes: headphone mode and non-headphone mode. In non-headphone mode, users can participate in game interactions to earn token rewards without needing to own a headphone NFT, provided they have energy. In headphone mode, users can earn higher token rewards by participating in game interactions with energy. The following content pertains to headphone mode.

Users can only participate in single-player mode when they have energy, with each energy allowing for one music interaction. Players earn scores and MCT rewards from completing music game interactions, with earnings typically based on three factors:

• Music game difficulty: By using different types of headphone NFTs, users can choose different difficulty levels for music games. The higher the game level, the higher the MCT rewards.

• Music interaction score: Based on performance in the music game.

• Sound quality value: The higher the sound quality value of the headphone NFT, the more MCT can be earned for the same score. A challenge mode will also be introduced later.

1. Game Elements

The game includes four types of NFTs: headphone NFTs, blind box NFTs, gem NFTs, and note NFTs. The app has a built-in trading market where players can buy and sell items, including headphone NFTs, headphone NFT blind boxes, gem NFTs, note NFTs, etc. A 6% fee is charged on these transactions. Items in transactions will be locked and cannot be used to earn rewards.

Headphone NFTs

There are four types of headphone NFTs, corresponding to four game difficulty levels.

(1) Headphone Attributes

• Sound Quality (MCT Earnings): The higher the sound quality attribute, the higher the earnings for the same energy consumption.

• Inspiration (Mystery Box): Inspiration determines the frequency and rarity of mystery boxes appearing (coming soon).

• Charm (MU Earnings): Not yet open, expected to be related to MU token earnings in the future.

• Quality (Durability/Repair): Quality affects the durability and repair costs of the headphones. The higher the quality attribute, the less life value consumed each time, and the lower the repair costs.

(2) Headphone Rarity

Rarity is the value level of each headphone NFT. There are 5 levels: Common, Classic, Precious, Rare, and Legendary. Different rarity levels correspond to different levels of basic attributes, affecting the gem slot bonuses and energy value limits, so the higher the rarity, the higher the earnings.

Additionally, the value of each attribute will be randomly determined within the corresponding minimum and maximum values based on the rarity of the headphones. Therefore, even for the same type of rare NFT headphones, their attributes may vary significantly.

(3) Headphone Gem NFT Slots (Coming Soon)

Each headphone NFT has four gem slots for players to insert "gem NFTs" to enhance their basic attribute values. Each headphone NFT will unlock a slot upon reaching a certain level.

There are four types of gem slots, each representing an attribute:

Blind Box NFTs

Opening blind boxes is one of the main ways to obtain headphone NFTs. Blind boxes have the same five rarity levels as headphones: Common, Classic, Precious, Rare, and Legendary.

Blind boxes have a higher probability of opening headphone NFTs of the same rarity but also have a certain probability of opening headphone NFTs of higher or lower rarity.

Gem NFTs (Coming Soon)

Gem NFTs provide additional enhancements to headphone NFT attributes. When headphones unlock slots and consume MCT to activate, players can insert gem NFTs to enhance specific attributes of the headphone NFTs. There are two ways to obtain gem NFTs: mystery boxes and the market.

There are four types of gems, each representing an attribute:

• Yellow + Sound Quality

• Blue + Inspiration

• Purple + Quality

• Red + Charm

Note NFTs (Coming Soon)

Note NFTs can be obtained through music interactions, and their effects will gradually be enabled as the application’s music interaction modes are developed.

4. Game System

Earnings Cap Mechanism: The game sets an income cap mechanism, with daily energy limits and daily token reward limits in single-player mode. These limit the number of tokens users can earn each day. When the earned tokens reach the cap, users cannot continue to earn tokens even if they have energy. They must wait for the reward cap to reset (reset daily at 0:00) to continue playing and earning rewards.

In non-headphone mode, the main factor affecting players' earnings is continuous single-player scoring.

In headphone mode, the attributes of the headphone NFTs are also a major factor in players' game earnings, so it relates to both the efficiency of the player's headphones and continuous click scoring. In summary, the better the player's headphone NFT attributes and the higher the participation mode, the higher the earnings.

Energy Mechanism

Each music interaction consumes energy. Energy is automatically restored after consumption, recovering 25% every 6 hours until reaching the energy cap. Users can increase their energy cap by holding more headphone NFTs, calculated as follows:

With headphone NFTs held and basic energy obtained, each Genesis headphone NFT can increase the energy cap by 0.5.

With headphone NFTs held and a certain basic energy value obtained, rare or higher-level headphone NFTs can increase the energy cap.

Example:

• 1 Common Headphone + 1 Classic Headphone = 6 Total Energy (5 Basic Energy + 1 Reward)

• 2 Rare Headphones + 1 Common Headphone = 17 Total Energy (7 Basic Energy + 10 Reward)

Note: Selling headphones on the market will result in a loss of energy and energy cap. Transferring headphones from one account to another will cause the headphones to enter a 48-hour cooling period, during which users cannot use that headphone.

Durability Mechanism

The initial durability is 100. Each time energy is consumed in a game, the headphone NFT will consume durability. If users only use this headphone to provide energy, its durability will not degrade.

The consumption of durability varies based on the rarity and quality value of the headphone NFT. The higher the quality attribute, the lower the durability loss and recovery costs. Headphone NFTs will suffer a "sound break" penalty when reaching the durability threshold.

• Durability < 100%: The headphone NFT cannot be listed or transferred in the trading market.

• 20% < Durability <= 50%: The sound quality of the headphone NFT will drop to 90%.

• 0 < Durability <= 20%: The sound quality of the headphone NFT will drop to 10%.

• Durability = 0: The sound quality of the headphone NFT will drop to 0%.

MCT can be used to restore durability. The restoration of durability is affected by the rarity and level of the headphone NFT, as well as the degree of durability loss. The lower the durability, the higher the recovery cost.

Headphone Upgrades

Each headphone NFT has 30 levels, and players can upgrade by spending MCT. The higher the level, the more MCT consumed. Each upgrade requires a waiting time, and paying MCT can speed up the upgrade process. At NFT Lv.19, Lv.28, and Lv.29, in addition to MCT, extra MU is also required.

Upgrading headphone NFTs can increase the daily earnings cap and unlock new features at levels 5, 10, 15, and 20, unlocking headphone Mint, Slot 1, Slot 2, Slot 3, and Slot 4, respectively.

After upgrading, users will be allocated 4-12 additional attribute points based on the rarity of their headphones:

NFT Minting

NFTs reach level 5 to unlock the minting function, consuming MCT/MU to pair two headphone NFTs to mint a blind box. Each headphone can be minted up to seven times, and as the number of minting increases, the MCT/MU cost also increases. The probability of obtaining higher-level blind boxes increases with the frequency of minting. The headphones used to pair two NFTs are called "antecedents," and the category and rarity of the antecedents will directly affect the blind box produced. Pairing antecedents of different rarities will generate blind boxes of different rarities. Users only enjoy probability reward bonuses when pairing 1-1, 2-2, 3-3, 4-4, 5-5, and 6-6; other pairings like 0-1, 0-5, 3-4 do not enjoy probability reward bonuses, based on the first Mint probability.

After minting, the account requires a 48-hour cooling period during which minting cannot be performed.

Minting costs are dynamically adjusted, primarily determined by the price of MCT. The minting cost is updated daily at 14:00 UTC (22:00 Beijing time). Due to the volatility of token prices, it may be adjusted multiple times daily in extreme cases.

The cost formula is as follows: Mint Cost = MCT (A) + Base MU (B) + Additional MU ([A+B]*x). Adjustments mainly concern additional MU tokens, and dynamic adjustments ensure token consumption and maintain the value of MU. Currently, MU has not been launched, and minting is primarily conducted using MCT.

Taxes and Fees

The game will charge different taxes and fees for various in-app activities, detailed as follows:

Future Game Plans

In addition to the yet-to-be-launched gem NFT upgrades and mystery boxes, the platform also plans to launch music & dance (earning rewards by dancing to music using the phone's camera in the game), music & singing (earning rewards by singing in the game), and music & healthy lifestyle (earning rewards by exercising while listening to music in the game).

Social-Fi

Currently still in development, Muverse's main focus is music + social interaction, so SocialFi is also a key area of development. Through a queue mode, artists can easily release music albums on MUVERSE and hold online or offline concerts to develop their fan base. Users can purchase their favorite music NFTs and invest in artists.

In the creative mode, similar to short videos, users can earn income by creating works using music to gain attention from other users. Advertising companies can purchase music video NFTs at prices set by users through Muverse. After purchasing, advertising companies can add advertising content after the video.

Music NFTs are a key aspect of Muverse's social features, providing sales revenue for artists, and music NFT buyers will earn real-time royalty income generated by that music NFT in Game-Fi. As artists' music climbs the charts, these pioneering music NFTs will generate ongoing royalty income and increase in value.

IX. Token Economics

Muverse adopts a dual-token governance model of MCT + MU.

MCT

MCT is the token used for operations within Muverse, earned through interactions with music, with a total supply that is unlimited. Application scenarios include paying for various APP functions, including headphone minting, NFT durability repairs, NFT upgrades, gem upgrades, and unlocking gem slots. All MCT consumed within application scenarios will be burned.

MU

MU is the platform's governance token. MU is a payment token with some advanced features.

The total supply is 1 billion tokens, with a lock-up period of 1-2 years.

The application scenarios for MU include headphone upgrades, headphone minting, gem upgrades, participating in challenge modes, and purchasing music storage nodes. All MU consumed within these scenarios will also be burned, making the MU model gradually deflationary.

As of April 2, users have mined a total of 16,562,281 MCT through rhythm games and music listening scenarios on the Muverse platform. The total amount of MCT consumed for headphone NFT upgrades, maintenance, and minting is 5,178,281 MCT, accounting for 31.265% of the total mined amount. The remaining 3,437,722 MCT serves as platform reserves to support the continuous growth of user mining demand.

MCT liquidity: Muverse's MCT utility token can only be mined by users, and the Muverse team has not conducted any pre-mining. Additionally, any use of MCT will be transparent to the community.

MCT has added liquidity on Uniswap v2, Liquidity Pool Address.

The MCT used to increase the liquidity pool comes from the NFT upgrades and maintenance of Muverse headphone NFT users. Starting from April 1, 2023, all MCT consumed for Muverse headphone upgrades and maintenance will be transferred to the Wormhole address for burning and will no longer be used for other purposes.

Regarding MU, users have previously purchased a total of 752,586 MU tokens, with a total of 433,749.4 MU tokens consumed during headphone NFT upgrades and minting. The remaining MU balance for users is 318,836.6 MU. Currently, Muverse's multi-signature address A still holds 10,247,414 MU tokens, accounting for 93.158% of the total issued MU tokens and 1.025% of the total MU token supply. User holdings (318,836.6 MU) account for 6.842% of the total issued MU tokens and 0.00032% of the total MU token supply.

For more details, please refer to the recently published quarterly Transparency Report.

X. Conclusion

In the streaming era, the income of record companies and musicians is in a severely unequal state, with most musicians stating that their compensation is minimal. When discussing the issue of musicians' compensation, we must mention royalties. In the music industry, royalties are essentially fees paid to any rights holder when a song (or any creation) is sold, distributed, used in other media (such as commercials or films), or monetized in any way. The issue of royalties has always been a pain point in the traditional music world. According to incomplete statistics, from 2021 to now, the financing amount for Web 3 music projects has exceeded $200 million, and the ecosystem is becoming increasingly robust.

Muverse combines music with NFTs to solve the royalty issues of music artists through the issuance of music NFTs. The past two sales of musicians' songs have ended successfully, and users can purchase and collect artists' music NFTs as collectors to enjoy royalty earnings. The 1.0 version of the music rhythm game has now been developed, representing another scenario for music use. The future construction of a full-scale music community and music NFT market is even more worth looking forward to. With the continuous development of Muverse, we can anticipate its emergence in the WEB3 music sector.