- Ditto Music is looking to launch a DeFi lending platform, Opulous, for musicians.
- The platform will enable artists to borrow funds without using traditional financial institutions.
The popular record label services and music distribution company, Ditto Music, is set to launch a blockchain-based lending platform targeted at music artists. The decentralized finance (DeFi) platform dubbed Opulous will enable streaming artists to secure loans or raise capital without depending on traditional financial institutions. The DeFi platform will operate on a peer-to-peer model and will basically use “music as the asset class.”
A blockchain lending platform for musicians
According to the information by Musicweek on February 1, Opulous is being designed on Algorand to function as a loan pool that will use blockchain technology to connect investors with musicians looking to raise capital. Loans from the DeFi lending platform will be given to the artists based on their past streaming revenues with copyrights. This serves as the collateral for any loan secured.
Aside from borrowing funds from the lending platforms, other artists and investors can choose to allocate funds to the Opulous pool, which comes with a ten percent interest on a yearly basis. Like a smart contract, the interest or profits from the pool will be automatically directed to the pool contributors, according to the report. Stating a reason for the development today, the CEO of Ditto, Lee Parsons, noted that music artists are often neglected when seeking loans from traditional banking institutions.
Using DeFi, Opulous cuts out traditional banking, providing musicians with a platform with minimal interest payments, while giving investors the chance to stake a claim in one of the most exciting and fastest-growing financial industries in the world.Parsons added.
Blockchain adoption in the music industry
Blockchain is gaining traction in the musical space. Recently, Alibaba acquired a patent to debut a blockchain-based system to address the issue of copyrights and plagiarism detection. Additionally, some musicians are already using blockchain to develop their digital currencies. A recent instance is an American rapper Lil Pump, who’s planning to launch his Pumpcoin digital currency, as reported in December.