This feature is part of Resident Advisor's technology month, dedicated to coverage at the crossroads of electronic music and future-forward innovation throughout the month of June.

The relationship between lineups and ticket sales is a perpetual dilemma for festivals, clubs and promoters. Acts who can draw a crowd based on social media popularity and streaming charts are often prioritised over lesser-known names, a pattern that limits scope for left-field programming. As major nightlife capitals experience volatile ticket numbers, leftover lockdown debts, staff shortages, rising inflation and a saturation of events—among other pandemic-related effects—many fear this industry-wide pressure will be reflected in homogenous lineups.

"When we talk about venues only booking certain DJs or genres, this can often be down to financial reasons," UK producer Plastician explains. In London, club nights at small venues are suffering because promoters are unable to sell the number of tickets expected by the space, he says. "I think this is often due to venues not being aware of how much it costs to book the kind of DJ who sells tickets."

The Web3 community claims it can help. Collectively-owned units known as Decentralized Autonomous Organisations (DAOs) are entering the nightlife realm by throwing their own parties, sourcing lineups from members to better represent local talents, marginalised creatives and niche genres. These blockchain networks eventually want to operate their own venues, as gentrification and an overall increase in operating costs push independent bars, clubs and arts spaces out of business. DAOs hope a communally-owned club will also resolve workforce hierarchies by empowering behind-the-scenes employees who usually get little to no say in how places are run.

A DAO is, generally speaking, a group of people working together for a shared goal with no central leader. Members typically hold a stake in the form of a non-fungible token (NFT) or a token issued by the DAO, allowing them to jointly vote on proposals and actions. Some DAOs require newcomers to buy membership tokens, while others offer free membership and raise funds by selling various NFTs. All of these transactions involve cryptocurrency, an incredibly volatile investment that can make or break a DAO. Bitcoin has lost more than $900 billion, or 71 percent of its value, since November 2021, while Ethereum, the second most popular cryptocurrency, has slumped nearly 80 percent during the same period. Whether DAOs can achieve their goals all depends on crypto prices and the market's stability.

While it's not uncommon for clubs to be co-owned by staffers—plenty of co-op venues already exist—the chance to do that with potentially colossal funding has significant ramifications. In the art world, DAOs specialising in live NFT minting already have an IRL presence. Bright Moments has held gallery pop-ups in Venice Beach, New York and Berlin, while ArtSect runs a gallery in London. Nightlife-oriented DAOs are much newer by comparison but they've already sparked lofty dreams for an underground music ecosystem characterised by equality and inclusion rather than financial success.

Club culture is a group phenomenon, yet the bulk of stakeholders only participate as bystanders, notes Web3 strategist Chris Fussner, who curated a digital art section at Art Dubai this year. "Could you imagine festivalgoers creating a voting bloc at a major festival and submitting a proposal to book more artists from under-represented regions?" he asks.

Refraction's São Paulo event

Meet The Players

Refraction and Friends With Benefits (FWB) are among the biggest DAOs in this sector, holding parties and events that combine NFT collectors with electronic music heads. While FWB isn't strictly focused on nightlife, Refraction is. Founded in 2020 by Malcolm Levy, a former executive director at Vancouver's New Forms Festival, Refraction is currently focused on organising events across the globe before it hopes to acquire its own venue. [Disclosure: RA's music editor Andrew Ryce is a founding member of Refraction and was not involved in commissioning this article.] Members consist of individuals, festivals, collectives and venues that host these sessions. Among them are Nyege Nyege Tapes in Kampala, Tokyo's Rainbow Disco Club, MUTEK and Berlin club Panke.

So far, these gatherings have highlighted a mix of upcoming and veteran artists. At São Paulo's The Force earlier this month, Sandro, Yahminah and Jean Petra were on the bill while a night at New York's Zerospace booked Aluna, Latashá, dreamcastmoe, Prefuse 73, JWords and 063N13. "The goal is to curate lineups that speak to different kinds of audiences and communities," Levy says. "Within all aspects of electronic music, there's some level of gatekeeping in curation but we just want to create a framework where the process is transparent and actually makes sense."

It remains to be seen whether Refraction can attract the diverse clientele it hopes for. Judging by the crowd makeup at recent events, most attendees come from the crypto and art world, various participants have told RA. More public education on Web3 is clearly needed to get the average raver involved.

The system isn't fully decentralized—members suggest events or bookings to a core curation team that consists of Discwoman's Izzy Ocampo (AKA stud1nt), CTM Festival Michail Stangl and Refuge Worldwide resident Kaitlyn Davies, among others. To join Refraction, applicants fill out a membership form before going through a one-on-one interview and group interview. Once admitted, members receive a minimum of five Refraction tokens. There are currently over 1,000 token-carrying members. "People are joining the DAO by the minute–artists, musicians, industry professionals–and so we have to start gating it," Levy says. "Requiring applicants to go through our membership form, our safe spaces rule and our manifesto weeds a lot of people out."

Refraction's mini-festival at Panke in Berlin

Refraction was initially self-funded and received support from Seed Club, an incubator DAO that invests in Web3 platforms. Refraction has other Web3 investors under its belt and also makes money from NFTs. Relying on investors might raise eyebrows as on first glance, it might seem like DAOs are bankrolled like traditional startups. "DAOs are still beholden to the same stress of venture capitalism and exploitation," notes Ade Kassim, a New York DJ and Lot Radio resident whose use of Web3 systems is tempered by a healthy dose of scepticism.

But Levy hopes the existence of Refraction in the Web3 space can create meaningful change away from the old ways. The origins of the DAO came from his frustration with the current system of commodifying music. At New Forms, he had observed how big brands that wanted to sponsor the festival gradually launched their own parties and attempted to copy New Forms' lineups. But corporations don't always understand the ethos behind the music they promote, Levy says.

"What happens is that you'll have a specific genre of music, which might have started in a specific place for specific artists, but then other people who aren't representative of that community end up wearing the banner for that genre," he warns. "The mainstream has always borrowed, and often straight out stolen, from the underground. You can see that happening at Coachella."

To qualify as a DAO, an organisation's structure and governance must exist on the blockchain–a structure with widespread environmental concerns. Some groups are simply communities with shared crypto assets but are still colloquially referred to as DAOs in the Web3 world. The Willow Tree (TWT), launched in late 2021, is one of them. It's led by Jonty Harrison and Thor Kverndal with a panel of advisors who include former RA guest editor Elijah of Butterz, Luke Cheadle of XLR8R and FactoryDAO's Dr Nick. Like Refraction, TWT is concentrated on parties at existing venues before it considers running its own.

Where Refraction intends to own its venues, TWT aims to take over an existing place or even a space within a larger venue. According to Harrison, some of London's bigger clubs want to open a smaller and more artistically adventurous space but lack the funding. That's where TWT could come in, he notes. So far, TWT has put on four club nights at London's 1717 Hanover and Dalston Den, booking several of its members to DJ. Those interested in playing were required to submit an application. Kverndal suggested lineups based on those applications and the Discord community chimed in before final decisions were made.

TWT currently has around 50 members. Those interested can join for free via Discord for an occasional say in voting or they can purchase a membership NFT to be part of Nightfund, a funding program to help UK creatives throw meaningful parties in the face of financial difficulties. Proceeds from NFTs go into Nightfund's treasury, with holders earning voting rights and access to TWT events. Promoters often draw from their own reserves when starting out, making it a tough career for someone from a low-income background. TWT hopes Nightfund will remove that barrier to participation.

Not Telling performing at TWT's Dalston Den party

"Nightfund will provide support for those with the right ideas, not necessarily the right bank balance," Harrison and Kverndal say. "It's essentially whatever they want to do with the money—they pitch that to the community and we decide what we want to make happen." Nightfund could also help protect DIY venues from closing down. "Not every space has a massive reach and fame level to achieve success via crowdfunding," they note. "We want to create a structure for all types of smaller, independent venues, promoters and artists can access support." Plastician, a member of TWT's Discord and FWB, told RA that he's currently thinking about organising events under Nightfund. "I am excited to see how their membership raises go and I think they've got a really promising community in its early stages," he says.

TWT was formed in hopes of revalitizing London nightlife. The city now has the fewest number of nightclubs since the mid-'90s—a result of pandemic-related bankruptcies and policies that benefit property developers, according to the UK's Night Time Industries Association. The financial reality of operating a space limits the playing field for grassroots venues, laments SODAA, a crew looking to run a multi-use venue in London. Established late last year, SODAA isn't officially a DAO yet and is still working out the costs and form of its membership. So far, it has a Discord base of over 400 people. Funds from membership and events will be invested into SODAA's eventual physical space.

SODAA's mission is to center queer, working class and POC communities while promoting harm reduction, drug safety and disability accessibility. Like TWT, it plans to take over existing spaces, such as underused or empty buildings, but that will depend on licensing approval from local councils. While SODAA is dedicated to artistic experimentation, its other priority is uplifting workers. "Most venues operate in a hierarchical way which excludes the majority of the workforce from benefiting from their labour," the team warns. "Too much focus on DJs eclipses the importance of behind the scenes roles, including—but not limited to—security, bar staff, cleaners, door people, technicians." By offering each member a voice in management decisions, autonomy in working practices and artistic curation, "we want to position them at a more equal level," says SODAA.

Scaling And Governance

In a rapidly tumbling and unregulated cryptocurrency market, the financial structure of DAOs raises major concerns. These collectives plan to fund their respective ventures through tokens but still require near-term capital in the form of grants and investors. If crypto-focused venture capitalists bankroll a DAO, how does that align with the platform's community values? "It's almost naive to not call out how intertwined Web2 and Web3 are," says Kassim.

Many would like to believe DAO-backed venues are more insulated against crises such as a recession because unlike conventional spaces, alcohol or ticket sales aren't prime concerns. But in a weak economy, investors are more likely to buy traditional safe haven assets rather than crypto, which could affect a DAO's NFT sales and membership levels.

"Communication between the sellers of tokens or NFTs to the holders will have to be extremely solid to ensure investors don't feel like they're being fleeced," warns Plastician. Even as a Web3 proponent, he's still wary of tokenization. "Sometimes, simplifying the process for investors to get involved will open the door to more traditional finance raises," he says. "If we can appeal to those but verify ownership or shares in the form of NFTs as more of a secondary thought, we might get off the ground a little quicker."

The curation and administration of DAOs is also a hot topic among fans and critics. Collective, transparent ownership sounds great on paper, but execution is a different matter. Membership scale is a major hurdle. As their numbers grow, how can these DAOs ensure everyone has a say in programming? And can these groups really call themselves decentralized if they have a core team that makes the final calls?

Cherie Hu, founder of the research DAO Water & Music, sees curation as better distributed rather than completely decentralized. Curation and gatekeeping, to her, are both ways for people to dictate an artists' ability to reach fans. As DAOs enable more crowd participation in that process, it's important to filter the resulting noise, she says. "People need some kind of guide or navigator to help sift through that noise otherwise, they're gonna be very overwhelmed or confused to the point of not wanting to participate as consumers or supporters. Curation inherently provides value by cutting through noise, I think, in a music industry context." Having a small group of curators who are experienced, know local scenes and absorb feedback from DAO members could ensure that distribution of access to opportunity is much more horizontal than it is currently, Hu continues.

Balancing multiple interests to form a unified identity is also a daunting task. SODAA, for one, is experimenting with plural voting—a system that avoids what it calls the "tyranny of the majority," i.e., policies that only matter to the majority of members. Plural voting "allows voters to express the intensity of their preferences, allocating 'voice credits' on things that matter to them," the team say. "This way, when the community is called to vote on a series of proposals, you get a more nuanced view of voters’ intentions and you also make sure that a less 'popular' motion or idea can still get enough votes to be implemented." They also claim that regular review mechanisms could ensure operating practices remain flexible.

It's all about installing infrastructure to make sure DAOs are listening to niche interests in their respective communities, advocates say. Water & Music, an alumnus of Seed Club's accelerator program, holds barometer surveys to get a sense of what topics are most important to members. It also has various channels for feedback that inform its projects while core teams actively participate in community conversations. "Ideally, as the community grows, you're having more people on the ground getting feedback and that feedback is then being synthesised and aggregated in some way that is communicated across the organisation in terms of priorities," Hu says.

DAOs remain a social experiment for now. Still, their alleged potential to transform the status-quo has captivated several hearts and minds who believe these disruptive networks may be the music industry's only viable answer for a better future. As Kassim sums up: "The ability to facilitate dialogue and output by means of these autonomous structures that could be made of complete strangers and still be bound by a guaranteed system of trust is what’s revolutionary to me."