How Does Coda Work for IP Rights Tokenization for Artists
Coda allows artists to generate creative financing by supporting them with music rights tokenization, giving them access to a global community.
Coda allows artists to generate creative financing by supporting them with music rights tokenization, giving them access to a global community of investors ready to creatively finance their works. Built with a complex legal framework and secured by smart contracts, Coda removes all the barriers of entry for artists to start funding their works, without giving up ownership of their art.
How does tokenization work on Coda Exchange?
Tokenization on Coda Exchange involves splitting up ownership of specific rights across lots of different owners and recording this ownership using digital tokens called royalty rights tokens (RRTs) in a secure digital contract called a smart contract. These tokens represent the transfer of ownership to a share of your music rights, allowing you to sell or trade them with fans and supporters. This process enables you to generate creative financing by monetizing your music in a new way, whilst still retaining control over your creative work.
The process is pretty simple:
- Artists sign up and will get personal guidance from the Coda team to help decide and evaluate what’s right for you. Establishing the terms and opportunities that are available, and making sure you get all the legal coverage you need
- A release calendar and launch date are established to prepare and announce your release and introduce supporters and fans to your release
- Your release goes live with an initial launch, allowing anyone the opportunity to support your work and buy into your rights
- Once sold out, or after seven days, whichever is sooner, the release goes live on the exchange and you will receive the creative financing from the release. Any unsold IP rights will go back to you as well, so you will retain ownership of anything not purchased
- With the market open, anyone can now continue to buy and sell, with artists able to buy back from the exchange at any time, until the term of the release expires
- Any future royalties generated by the rights will be collected and securely distributed automatically through Coda to all IP rights holders
What are the benefits of using Royalty Rights Tokens™?
Creative financing is a difficult area for artists to enter, and by using Royalty Rights Tokens™, and creating an opportunity for supporters to invest in your work, you can engage your fans more deeply whilst creatively funding your art. And, by allowing fans and supporters to invest in your music, this can create a sense of community and loyalty, and additionally put you in front of new audiences, to find new fans through the international community of supporters on Coda.
What legal and regulatory considerations are involved?
Tokenizing music rights involves navigating a number of complex legal and regulatory frameworks. With Coda built on a core legal framework tied to complex smart contracts, this is all covered for you. Helping to ensure compliance with relevant laws and removing the complex legal processes and barriers to entry. The team at Coda will work with you to ensure you have a smooth journey in getting your rights tokenized and answering any questions that may arise.
How does Coda ensure secure and transparent transactions?
Coda uses a secure smart contract system that has been specifically designed in line with complex legal frameworks to establish a clear and transparent system that allows easy traceability of rights ownership and royalty distribution. Each release is recorded by a tokenized record of ownership called a royalty rights token, that is publicly traceable creating a tamper-proof and verifiable record of ownership and transfer of ownership, to ensure that all rights holders can easily see and trust the integrity of the transactions and ownership of rights.
How much can an artist raise by sharing rights through Coda?
It all depends upon the release, whether the opportunity can generate $1k or over $1million, as there are many factors that are taken into account with IP rights releases, all of which impact the possible financial opportunities for tokenizing and launching your rights on Coda. Primarily existing rights with historical royalty revenues will be easier to evaluate, along with new releases from artists with previous historical royalty returns which can be used to estimate potential valuations. For example, a release with a catalogue of regular royalty distribution of $3k a year on a life of rights deal, could produce funding in excess of $40k. New releases from independent artists are generally at a lower valuation, due to the uncertainty and risk involved in the investment - with known artists that have historical returns a lot higher. The term of the release is also an important factor, offering the life of rights will produce a higher valuation and opportunity than a 10 year release. Other factors include the type of rights included, such as mechanical, streaming, movie and tv sync, etc., the jurisdiction, release marketing calendar, and the size of the catalogue.
Who retains the copyright to the works?
The complex and modular legal framework that is the foundation of Coda allows artists to separate and distribute rights to their music IP on their own terms, retaining copyrights at all times. Keeping control of your work, this segregation of specific rights, such as mechanical, sync, streaming, reproduction, can be separated by jurisdiction, term and many other factors. With the copyrights under the control of the artist, it ensures complete control of the artistic use of the works is always with the artist, and the only rights shared are to specific music IP rights that may provide future possible revenue streams for those who support and invest in the release. And, with the market open at all times, the artist can always buy back any rights they shared, whenever they like.
What type of works and rights can artists tokenize?
Whether it’s new or old, a single, an EP, an album, or a catalogue of works, any musical release or collection of releases can be tokenized using Coda. With the opportunity to distribute percentage options on any release, an artist has the flexibility to approach and engage the investor community on their terms to tokenize and share rights to only what they want to. In most cases, albums and catalogues are more successful opportunities, but high profile singles and EPs can do just as well, if they have the opportunity behind them.
Getting started
For artists looking to get onboard or learn more about the opportunities Coda presents, simply signup using the Artist Connect form here and we can get you introduced to the team and the platform.
