photo of Nigel Eccles

The word ‘vault’ suggests safekeeping – contents shielded from view and restricted to a select group of key holders. But it also has other interpretations: an arched roof, or a means of propelling oneself over an obstacle. VAULT, the new web3 music platform started by Nigel Eccles, co-founder and former CEO of the popular sports gambling app FanDuel, invokes a bit of each of the word’s meanings. 

Built on the Solana blockchain, VAULT allows artists to curate exclusive content for their fans, packaging music, photos, videos, messages, and VIP experiences in ‘vaults’ that only key holders – fans who purchase key-like non-fungible tokens (NFTs) – can open. At once, VAULT is strongbox and shelter, as well as an entirely new format that asks us to hurdle our assumptions about what NFTs can be.

Eccles first became interested in crypto in 2017, but as a consumer product builder he was intimately aware of the technology’s faults: the infrastructure was basic, protocols were slow and gas fees made it expensive. All of those points of friction are anathema to average consumers, who aren’t willing to exchange convenience for a vision.

He left web3 for a time but revisited it in 2020. “I was like, oh, wait a second: things have moved on a lot,” he said when we spoke recently. “We've got the ability for people to buy stuff with a credit card, which I always thought was a massive onboard because most people don't have crypto.”

Ethereum’s proof-of-work protocol was still too slow and expensive for a consumer product, but then he came across Solana, a blockchain that uses a proof-of-stake protocol and a novel proof-of-history mechanism to drastically increase efficiency and decrease transaction fees. “This is exactly what we need,” he said. “If you're working on a mass-market product, it has to be something that you could sell for $25-30, so we started building on that middle of last year.”

Though he doesn’t have a music background, Eccles was able to identify that top fans are under-monetized in today’s streaming market. Streaming services’ one size fits all pricing model – we all pay $9.99 a month and we have no control over how those funds are allocated – doesn’t accommodate the different ways we listen to and connect with music, even though they differ for each artist and each fan base.

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Eccles used Drake’s last album as an example. “Millions of Drake fans were anticipating [his album drop]. If you had said to them, ‘Hey, for fifty bucks, you would get a premium version of this album’, he would've sold hundreds of thousands. And instead he dropped it on Spotify and that's great because everyone gets to listen to it. {But} we just felt that the music industry was missing out on an opportunity to monetize top fans.”

That “premium version” is akin to a deluxe edition of a physical product – like the bonus content that comes with Beyoncé’s album. And while the Drakes and Beyoncés of the world are upselling on top of a streaming format that already pays them millions, 98.6% of Spotify artists are only making $36 per quarter. VAULT could conceivably serve as a core revenue generator for smaller, independent artists who have dedicated fans but not enough of them to sustain a career through streaming alone.

Streaming’s pro rata payout model is the main culprit for that disparity, where artists are paid based on the overall percentage of streams they generate compared to every other artist on the platform. If Drake gets 40% of the total streams on Spotify this month, for instance, he’ll get 40% of all the money allocated to all artists this month – even if you never listen to Drake and don't want your money to go to him, 40% of your subscription fee is going to Drake. 

It’s virtually impossible for loyal fans of smaller artists to financially support them without a mechanism external to the streaming platform itself. VAULT is trying to fill that gap and support an artist middle class that’s long been underserved.

VAULT first partnered with pop artist Thomas Pipolo, aka Pip, earlier this year. Pip was in the process of a crowdfund for his new web3 label, Cotton Candy Records, and his own debut EP, Cotton Candy Skies, via Mirror.xyz. But when VAULT’s CMO, Kara Burney, reached out, he saw no reason not to supplement his efforts.

“That's the thing about web3, right?” he told me. “You don't need any platforms, but when the right one comes along and they're doing it the right way, then it's a no brainer.”

From the Vault web site

Pip was first introduced to the blockchain in 2020, when he connected with friend, TikTok influencer, and now label advisor, Nick Johnson.

“I sat down with him and it was like Chinese," he described. "It didn't click then, but then a year later I saw him again at his engagement party and he is like, dude, you're gonna regret this if you don't jump all in on. So that's when I really dove in.”

Pip leveraged his NFT editions on Mirror as a gateway to VAULT, giving anyone who purchased an NFT on Mirror – which comes with its own utility – a key to access his vault.

Pip's vault can be accessed by one of 500 NFT keys priced at $24.99, where each unlocks exclusive first-listen access, a behind-the-scenes documentary on the making of the album, ‘Why I Wrote It’ videos for each track, first-look access to the debut music video, and access inside Cotton Candy Records.

Much like Patreon, the vault packages premium content – in his case an exclusive music video and additional explainer vídeos about each song – alongside publicly available content – e.g. music that can also be heard on Spotify.

When I made the comparison to Patreon, Eccles was quick to differentiate VAULT from the prominent web2 creator platform, where fans subscribe to creators in exchange for access to consistent premium content. 

"There are actually very few musicians on there and I think there are two reasons," he said. "From the musician's perspective, it's just hard to produce content every month. It's like, okay, you've got an album launch. Great. And then maybe you have the tour, but then what do you do?"

The second reason is data portability. "I've been a patron for a bunch of things on Patreon, but the moment I ended my subscription, I lost all access to the content," Eccles continued. "I spent several hundred dollars there and I actually don't have anything to show for it." 

On VAULT, because keys are stored on the blockchain, holders will have access to the contents for as long as they own the key – even, conceivably, if the VAULT platform ceases to exist. And because it isn't a subscription model, artists don't have to worry about creating consistent content to appease eager fans. 

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The secondary market for keys adds another dimension. Revenue splits for initial key sales are 90/10 in favor of the artist. When keys are resold, the seller gets 90 percent, the artist gets 8 percent, and VAULT gets 2 percent. 

Secondary sales aren’t a focus right now, though. The goal is to create a primary experience with fans – secondary comes if and when emerging artists like Pip experience some success and create financial upside for their key holders. But even then, the diehard fans may hodl in pride, their keys badges of honor akin to autographed ticket stubs or vintage band tees.

The hope that artificially scarce NFTs will become the digital equivalent of physical collectibles – visible and verifiable proof of fandom – has become a common narrative in the world of NFTs, but Eccles doesn't think of vaults as NFTs, or even music-specific. He's thinking bigger than that.

While the company itself will focus on music, Eccles envisages VAULT as an entirely new media format – the same way CDs and vinyl are formats – that can be played on any player, made open-source, and decentralized across every content-oriented industry.

"We'd love to see book publishers saying, 'Hey, wait a sec, we don't have to go through Amazon. We can actually print in this format. And we can actually have our own bookstore and people can buy it directly here – we don't have to pay the Amazon tax,' he said.

"Similarly, Hollywood sits on something like a trillion dollars in [intellectual property], but they only sell shows and movies through a closed loop system like Netflix or the movie theaters," he continued. "We're saying they could do that again through this digital format where they basically put it into a vault and they sell it. And they have the confidence of knowing the only people who can consume it are the people that actually paid for it."

Over the coming year, VAULT plans to decentralize the protocol so that other organizations can build on top of the format, while leaning further into vault customization like randomizing key rarity – think finding a Charizard in a pack of Pokemon cards, or winning a classic poster of your favorite band by being the 100th caller into your local radio station. 

VAULT, astutely, is leveraging open-source composability and precedence from the physical world, rather than banking solely on digital collectibles whose utility isn’t always understood. "I think the vault format can be mass market, because we already see it in physical products," Eccles said. "When I see Gen-Z buying BTS CDs and they don't have CD players, I think, hey they must like collecting stuff, right? What if they could collect something where they could actually play it on their phone? When somebody is a huge fan in music or in sports, their fandom is usually visible in the stuff that they have.”

We wear our interests and our beliefs on our sleeves – sometimes literally. Our identity is a vault of sorts, a strongbox for our deepest values and a shelter for our various fandoms. We give keys to people so that they might know us, or see the selves that we want to be. And the vaults we seek access to define us as much as the ones we already have – the keys we hold represent entreé to a distinct set of life’s doors. Through the blockchain, VAULT is hoping to find a format that can more efficiently capitalize on those access points, helping us unlock some of our deepest desires: to be seen, to belong, to be unique.