Joey DeBruin
@joey
Does anyone have a handle on the legal side of Royal music NFTs? Is an LDA similar to what Opolous or Republic call an S-NFT? Is Royal registered under U.S. Regulation Crowdfunding? I can't find in their docs.
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JD Ross
@jd
It is not a security so not registered. It’s a fully on chain contract containing rights to streaming income. The contract is linked from each token. Using the royal app or directly on chain each owned can claim royalties as they are released
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Joey DeBruin
@joey
Got it, thanks for the reply! And yeah I read the linked contract, very cool. Is there anything different about the kinds of songs you can sell in this way vs the S-NFTs you see on Opolous/Republic?
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Tara Fung
@tara
It doesn’t hinge on the songs themselves, but rather what types of revenue is being shared. If just streaming revenue, then you can argue that’s not centrally controlled as the artist can’t unilaterally be responsible for that. If it were to include “sync” revenue, where the song
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Tara Fung
@tara
…is “sold” for use on a show or commercial, for instance, that is the result of someone’s effort to make that happen (typically a mgmt company) and that then is hard to argue is not a common enterprise.
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Tara Fung
@tara
TLDR is that this space is really gray and there is a bunch of regulatory risk for anyone not registering a token that involves some revenue stream or expectation of profit.
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Joey DeBruin
@joey
Absolutely, yeah I can see how the type of revenue changes things. I would also think the type of song does too - eg if I’m crowdfunding a song that I’m going to write but isn’t written yet, then the expectation of profits is dependent upon my work.
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