Rethinking Web3 for Music Finance
We’re entering an era where music royalties are no longer an asset class for insiders and incumbents. With the right financial infrastructure, they can be securitised, traded and valued like any other financial instrument. Yet, while Web3 has promised innovation in finance, too many projects have led with technology, complete with jargon, buzz words and convoluted concepts, rather than solving real problems.
At Record Nexus, we intentionally take the opposite approach. We start by embedding ourselves in the industry, understanding how music finance works today, participating and feeling the pain points of legacy systems, workflows and processes. Only then, do we take the time to reimagine the solution with the benefit of technology, where it adds value.
The solutions we provide will not work for our customers if we simply stop at tokenising everything, and calling it a day. We need to be right there, where the “rubber meets the road”, in the application (or applications) that will make a difference to the way people do their work, complete their tasks and achieve their goals.
Why most Web3 Platforms Get It Wrong
I am constantly amazed by the technical innovation and ambition of Web3 projects, and yet many fail to gain any real adoption. The common mistake? They begin with the technology first without considering the existing legal, financial and operational realities. Of course, that’s part of the appeal, disrupting the old ways with new is part of the Web3 culture.
Take a closer look at many of the existing RWA (Real-world Asset) tokenisation platforms. They focus on creating representations of assets, but don’t solve for workflow adoption and meaningful business outcomes through integration into existing processes. The result? Amazing technology that nobody uses.
A Customer-first approach to Music Finance
Our first-principles are simple: People aren’t buying blockchain, they’re buying better outcomes.
Artists, labels, investors don’t wake up thinking “I need tokenised music royalties”. They want faster access to capital, more liquidity,better transparency, lower transaction costs or even more fundamentally, a seat at the table. If blockchain helps provide that, great. It’s quite likely that the solution in many areas will involve more standard general technologies, better databases, APIs, automation, user experience and interfaces, which is great too - we prioritise the things that make a difference.
Our Principles for Innovation
Start with legal and commercial realities - not burying our heads in the sand, we work backwards from industry needs, embedding compliance and financial best practice before implementing technology.
Leveraging existing Layer 1 & Layer 2 infrastructure - instead of reinventing the same wheel again and again, we integrate with platforms that have established the necessary foundations and abstractions for our use-cases.
Composable Architecture - our architecture is modular, allowing seamless integration of blockchain technology where needed while relying on tried and tested database, application and networking infrastructure where they make sense.
Invisible Web3 - when we apply decentralized infrastructure, using blockchain systems, it’s often behind the scenes, ensuring a seamless user experience, minimising the impact of tradeoffs that these technologies bring in terms of complexity, gas fees and transaction completion times.
How it all works: A hybrid architecture approach
Our approach blends layer 2 RWA platforms with digital applications, striking a balance between decentralisation and usability. Here’s an overview of how it comes together.
Layer 2 RWA Platforms: These provide institutional grade tokenisation, compliance enforcement and liquidity mechanisms. They integrate seamlessly with Ethereum and other layer 1 networks, ensuring composability with DeFi.
Off-chain infrastructure: we still rely on centralized cloud native managed service databases, CRUD APIs and traditional web applications for efficient data model and resource management, reporting and compliance tracking.
Front-end clients: Whether it’s an investor dashboard, a collection trading platform, an artist portal or any other consumer facing applications, our interfaces connect users to both on-chain and off-chain services without forcing the mechanics, rather, by providing streamlined solutions to their daily jobs and tasks they need to perform.
Security & Compliance: Identity verification, KYC/AML processes and transaction monitoring happen at both the protocol and application levels to ensure regulatory alignment.
Deployment Flexibility: We use containerized, cloud native deployments (via Kubernetes / Docker) to ensure seamless integration and scaling, while offering the possibility for enterprise or institutional customers to deploy their own self-managed infrastructure, if necessary.
The result? A composable, adaptable system that prioritises user needs and creates the foundation for real world adoption.
Why this matters for Music Finance in the future.
Music finance is at a clear inflection point. Streaming has created an explosion in royalty-based revenues, yet capital access remains inefficient. By securitising music royalties, we unlock new liquidity sources, enabling new investors to participate in a market once reserved for relatively few insiders. For the incumbents, there is a significant opportunity for digital transformation and workflow optimisation to impact how people in the industry get their work done.
To make this a reality, we must be pragmatic about how we build. Web3 alone won’t solve these challenges, but it does bring a great deal of exciting opportunity to evolve from how it works today and into the future.
At Record Nexus, we’re not just here to build another speculative token. We’re here to build the infrastructure that will underpin the next era of music investment. We do that by putting customers first, always.