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The term DeFi (decentralized finance) is frequently associated with finance when it is brought up in the crypto world.

A battleground for venture capital firms and hedge funds, who utilize DeFi to take on enormous levels of leverage at the expense of individual investors, has replaced what was once a platform for innovators, engineers, and tinkerers (as we saw with the collapse of Terra and Celsius).

Even non-fungible tokens (NFTs) are beginning to be recognized as their own distinct category within Web3, more closely related to the art and entertainment sectors than the initial ecosystem of smart contracts they arose from as institutions like Sotheby's and Universal enter.

In order to incorporate smart contracts and novel incentive structures into legacy sectors, blockchain pioneers must go back to the decentralization that defined the space's inception.

Can more artists get rich in the NFT crypto art market? — Quartz

An all-too-familiar story

The music business is infamous for treating artists unfairly. A musician writes a song that has a cultural impact, yet distributors and intermediaries make money off of their skill while paying little or no royalties to the original author. Every artist appears doomed to fall into the same trap from the same vested interest organizations, whether it be Taylor Swift, indie bands, or rappers from the East Coast to the West. While the goal of streaming services was to democratize the industry by removing barriers to entry, artists still receive a small percentage of the value they produce, basically serving as "content creators" for digital platforms in exchange for distribution rights.

Blockchain is not the only technology that can bring about new incentive systems that emphasize the importance of the artist. DeFi infrastructure can give artists new options for obtaining royalties, such as compounding interest accounts and on-chain transparency regarding where their royalties go, as opposed to fractionalizing NFTs (which would make them securities). Many outstanding Web3 initiatives, like MODA DAO, aim to completely do away with middlemen so that authors can publish independently. NFTs will be a key technology driving DeFi into the entertainment business as the movement toward decentralization grows, enabling the deposit of stablecoins with compounding processes through protocols like AAVE.
 
Interview with Hackatao | #01 Issue | The NFT Magazine

Let the best protocol triumph

Certain protocols have performed better than others as the ecosystem has developed since the "DeFi summer" of 2020, which ushered in Chainlink's meteoric rise (while mainstreaming lockups and liquidity pools). As a result, the industry has a general idea of which blockchains and integrations are adoptable. There is a silver lining to all the protocol exploits and liquidated leverage: Only the finest tech survives. It is unsettling to observe how hedge funds have invaded DeFi, especially given that industry talking points focus on delivering financial services to the "unbanked."

Often, the first users and advocates of useful technology are artists. Dr. Dre partnered with NBA players and other celebrities to drive mass adoption of his Beats by Dre headphones, as was recently mentioned in a CoinDesk editorial during the publication's Sports Week series. Snoop Dogg and Eminem, protégés of Dr. Dre, also contributed to the advancement of NFTs in popular culture with a music video that featured their Bored Apes from BAYC as cartoon characters traveling throughout California. Death Row Records will be the first NFT music label in the Metaverse, according to Dr. Dre's intentions, which he recently revealed.

Technology that has thrived under Darwinian trial-and-error conditions is wonderful because it feels seamless. Few artists can articulate the audio output of a Funktion-One or Dragonfire Acoustics system, but they are aware that it is a sound that is superior to the rest. Artists don't necessarily need to speak on the complexities of underlying protocol architecture to realize when something works effortlessly.

The current financial collapse has given birth to a lovely tune. It has a "AA-VE"-like phonics.

 

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