Blockchain-enabled groups, such as Friends With Benefits, invest in their own creative communities using cryptocurrency tokens. This technology has potentially revolutionary implications for the music industry—if harnessed responsibly.

As Miami DJ Sister System played early '90s Coil in a suitably eerie, orange-colored room, a friend of mine started introducing me to people left and right. Words like "DAO," "Web3," "blockchain" and "seed" were being thrown around as I tried to keep up. I saw people I only knew on the internet, and ran into old friends I didn't expect to see, none of whom I realized were "into" cryptocurrency. Later, when Yves Tumor took to the decks, Diplo suddenly appeared, wearing a NASCAR jersey covered in Bitcoin logos. He went up to the booth, twerked up against it and then promptly disappeared, quashing rumours of a surprise DJ set. This was back in early June, in Miami, at a cryptocurrency party thrown during the Bitcoin conference for members of decentralized autonomous organization Friends With Benefits. What made it a cryptocurrency party? To get in, you either had to know someone involved or hold a certain number of FWB tokens.

FWB is a social token, which means it's a cryptocurrency you can buy and hold onto like any other. It's on the Ethereum blockchain, a versatile system that allows people to send cryptocurrency to each other and manage complex transactions like smart contracts. (NFTs are bought and sold on the Ethereum blockchain, for example.) Friends With Benefits, spelled out, is a decentralized autonomous organization (DAO) built on the token and based on a Discord server that you can only access by holding a certain amount of the currency, and thereby investing in the community. You can meet like-minded people in your industry, network with fellow travelers, find new collaborators, get restaurant and travel recommendations, help with a project—it's all right there in the name: Friends With Benefits.

Within its community are electronic music fans and artists, alongside other people from a myriad of tech, culinary, or other creative industries—basically, anyone with an interest in culture and maybe a passing interest in crypto. In one year, FWB has amassed around 1,500 members, thrown in-person events in Europe and North America, created its own ticketing system and is getting ready to launch an entire editorial platform centering the cultural intersections that interest its members. They speak of democratizing knowledge, revolutionizing journalism, even paying DJs equitably, lofty promises for what started as a glorified private message board. It might sound ridiculous, like a pipe dream. And for now, it kind of is. But this technology does have potentially revolutionary implications for the music industry—if harnessed responsibly.

A DAO is any kind of community that exists on a blockchain that follows its own laws, terms and methods of operation. These groups are entirely independent of any centralized finance system or existing infrastructure, and the only rules it abides by are the ones written into its own code. The terminology is loose, and a DAO can be pretty much anything, from a business to a place to simply fuck around with your friends.

The DAO model has existed for a few years and hasn't been without its issues. One of the very first examples, simply called The DAO, became notorious after one person stole approximately one-third of all the funds after exploiting a vulnerability in the code (what's usually referred to as a "hack"). Others have compared these groups, which encourage growth and valuation via growing membership—invite your friends to make more money!—to pyramid schemes or multi-level marketing. There are plenty plenty examples of those, too. But a good DAO, written with bulletproof code (to deter scammers and bad actors) and based on a dedicated community and real plans to produce something—other than just simply existing on Blockchain and accruing value—has incredible potential, especially when it comes to cultural industries."

My running joke about DAOs is that they're like a Model [United Nations] with money," cracks Raihan Anwar, a fragrance maker and all-around techno internet personality who works in the high-end coffee world, and helps out with FWB's social media and outreach. "You have full governance sections, you have message boards and you have people really thinking about the formalities of a DAO. For us, it really starts with the people—me, for example, I focus on building community, talking to folks, getting the conversation going. Our community is our largest asset."

Another way that DAOs were described to me, especially socially-oriented DAOs like Friends With Benefits, is that they are essentially like a decentralized co-op. Everyone pays in and everyone participates and everyone helps. A good, stable DAO will have a strong board of governors and abide by its own firm rules.

This autonomous ideology is part of the fabric of Web3, the name given to the larger Blockchain world that presents a new vision of the internet, compared to the familiar version often referred to as Web2. Web3 is decentralized and self-regulating, out of the hands of profit-hungry tech monopolies—though also government regulation and international law, for better or for worse."

Web3 is conducive to so much," FWB membership director Patti Hauseman explained to me. "I think the best way to look at it is that an artist can control their entire financial future, soup-to-nuts. They don't have to rely on Spotify or other decentralized service providers—royalties are transparent because of the blockchain and the Ledger accounting system, and it offers a way to sell a brand new format, a whole new source of revenue at a time when streaming revenues are suffering."

Though they seem within the realm of possibility, these ideas are still abstract—we're a long way from musicians not needing to rely on traditional models of income. And even after hearing all this, my gut instinct remained that crypto was some kind of tech bro scheme with myriad moral quandaries. Doesn't this sound too good to be true? What makes FWB different than any other humorously-named cryptocurrency coin, many of which have had dramatic ups, downs, scandals and humiliations? From what I could see, people involved with FWB were more interested in creating community and offering opportunities on a platform they saw as more transparent and future-proof than the world of Web2 and big banks. But were they for real?

Friends With Benefits started as the brainchild of Trevor McFedries, a former music executive perhaps best known as the co-creator of Lil Miquela, a CGI influencer that has raised questions (and heckles) over its sometimes controversial misappropriation of victim narratives. McFedries, ever a savvy and creative businessman, leveraged Miquela—including collaborations with the likes of Kim Kardashian—into a 100-plus million dollar enterprise via his creative agency Brud. For him, Web3 was the obvious next step for creatives."

People were stuck on Patreon, Substack… on these treadmills where they would have to keep cranking out work," McFedries told me. "I felt like if we showed them a way to create value with community, they'd be more intrigued by the space we wanted to build. I also thought there should be more creative people in crypto, I wanted to connect those dots. And having people have a stake in the community made it feel really warm."

Events are a big part of that: FWB put on its second IRL party in July at the Ethereum Community Conference in Paris. This time, the event was built more firmly into FWB's blockchain world—if you didn't hold the currency beforehand, you could simply buy some, even outside the club, and show it to the door person thanks to a new app created within one week by members of the DAO. (And if you didn't want to join the community, you could simply sell or swap it back after the event.)

French DJ Maelstrom headlined that party. I spoke to him while he was traveling across France for a residency surrounding Louisahhh's latest live show. He said he took the FWB gig because he was intrigued about getting paid on the blockchain—a secure transaction that, if he chose to hold onto that DJ fee, could become worth exponentially more than what he originally got paid. (Of course, it could also lose value, too, and that's all part of the game.) And again, for him, it was about more than just making money."

I'm more interested in the cultural aspect of it—you know, the potential of what you can do with smart contracts, and communities," he said. "After the party, I got more deeply into the DAO itself, and I realized there were so many people that I already knew there, people whose music I respected and admired, they were already in there trying to find ways to use the blockchain, to develop new avenues and new templates for musicians to make a living from their music."