Artists can launch their music NFT editions through Sound.xyz and collect edition purchase payments (supply-side fees).

Sound.xyz is an NFT launchpad built for musicians and artists. Sound.xyz was founded by Vignesh Hirudayakanth, David Greenstein & Matt Masurka and launched in 2021.

Sound.xyz team owns and governs the protocol. They currently take a protocol fee of edition purchases (revenue).

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Sound.xyz

# Sound.xyz Average revenue per user (ARPU) Methodology

## 1. Overview

Average revenue per user (ARPU) measures the revenue generated per active user on Sound.xyz over a fixed 24-hour window. It is calculated as total daily revenue divided by active users (daily), reflecting the protocol's ability to monetize individual users on a daily basis. Revenue is generated through protocol fees on both primary sales (mints) and secondary sales (trades) of music NFTs.

## 2. Data sources

- **Blockchain events**: `Minted` events from `MerkleDropMinter` and `RangeEditionMinter` contracts, `EditionPurchased` events from `Artist` contracts, `Bought` and `Sold` events from `SAM` (Sound Automated Market) contracts, `SoundEditionCreated` events from `Creator` contracts, and `CreatedArtist` events from `ArtistCreator` contracts, covering Ethereum and Optimism
- **Revenue**: Derived from the Revenue metric
- **Active users (daily)**: Derived from the Active users (daily) metric
- **External data**: End-of-day price feeds for native assets and asset metadata for decimal precision

## 3. Step-by-step calculation

### Component A: User identification and activity tracking

- **Purpose**: Identifies unique active users (daily) across all Sound.xyz protocol interactions
- **Logic**: User addresses are extracted from `buyer`, `seller`, and `deployer` parameters across minting, trading, and creation events. For creator activities, addresses are identified from `deployer` parameters in `SoundEditionCreated` events or by joining `CreatedArtist` events from `ArtistCreator` contracts with transaction records to retrieve the transaction `from_address`. Unique users are counted and deduplicated on a daily basis across both Ethereum and Optimism.
- **Key fields**: `buyer`, `seller`, `deployer`, and transaction `from_address`

### Component B: Primary sale revenue collection

- **Purpose**: Calculates protocol fee revenue from the primary issuance (minting) of NFTs
- **Logic**: Fees are aggregated from multiple minting contract versions. Protocol revenue is captured from the `platformFee` parameter in `Minted` events from `MerkleDropMinter` and `RangeEditionMinter` contracts. For legacy artist editions, revenue is determined by joining `EditionPurchased` events from `Artist` contracts with price change records to identify the applicable price at the time of the transaction.
- **Key fields**: `platformFee`, `amount`, and `requiredEtherValue`

### Component C: Secondary market revenue collection

- **Purpose**: Calculates protocol fee revenue from secondary market trades
- **Logic**: Fees are aggregated from Sound Swap interactions. For buy transactions, protocol fees are captured from the `platformFee` parameter in `Bought` events from `SAM` contracts. For sell transactions, the basis for revenue is captured from the `totalPayout` parameter in `Sold` events.
- **Key fields**: `platformFee`, `totalPayout`, and `totalPayment`

### Component D: Normalization and ARPU calculation

- **Purpose**: Converts revenue to USD and calculates the final ARPU figure
- **Logic**: All collected protocol fees are normalized by decimal precision and converted to USD using end-of-day price feeds. Total daily revenue is divided by the number of unique active users (daily) for the same 24-hour period. Missing values are filled with zeros to ensure a continuous daily time series.
- **Key fields**: `revenue` (USD) and `user_dau` (Active users daily)

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Sound.xyz

Average revenue per user (ARPU)

Average revenue per user (ARPU)

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