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 Earnings Methodology

## 1. Overview

Earnings represents the net profit generated by the Sound protocol, calculated as total protocol revenue minus operating expenses. Sound is a music NFT marketplace that enables artists to mint and sell music collectibles through various mechanisms including permissioned drops, fixed-price range editions, and secondary marketplace trading. The earnings metric captures the financial performance by measuring protocol fees collected from primary and secondary sales, minus any token incentives or operational costs.

## 2. Data sources

The calculation relies on the following raw data sources:

- **Sound v2 contract events**: Parsed smart contract events from Sound's minter contracts and marketplace contracts deployed on Ethereum and Optimism
- **Primary sales events**: `Minted` events from MerkleDropMinter contracts (permissioned drops), RangeEditionMinter contracts (fixed-price editions), and legacy Artist edition contracts
- **Secondary sales events**: `Bought` and `Sold` events from Sound Swap (SAM) marketplace contracts across multiple versions
- **Edition creation events**: `EditionCreated` events for legacy artist editions containing pricing information
- **End-of-day price feeds**: Token price data for USD conversion of fee amounts
- **Token metadata**: Decimal specifications for proper fee amount calculations

## 3. Step-by-step calculation

### Component A: Primary sales revenue
- **Purpose**: Calculates protocol fees collected from initial NFT mints across different minting mechanisms
- **Logic**: Extracts `platformFee` amounts from `Minted` events across multiple minter contract types on Ethereum and Optimism. For MerkleDropMinter events (permissioned drops) and RangeEditionMinter events (fixed-price range editions), the platform fee is directly available in the event data. For legacy Artist edition purchases, the calculation joins `EditionPurchased` events with price change data from `EditionCreated` events to determine the applicable pricing for each time period, as these contracts don't embed fee information directly in purchase events
- **Key fields**: `platformFee` for protocol fees, `edition` for NFT contract address, `requiredEtherValue` for total sale amount, `quantity` for mint count

### Component B: Secondary sales revenue  
- **Purpose**: Calculates protocol fees collected from secondary marketplace trading on Sound Swap
- **Logic**: Extracts `platformFee` amounts from Sound Swap marketplace events across Ethereum and Optimism. Combines both buy-side events (`Bought`) and sell-side events (`Sold`) from different SAM contract versions. Buy events contain artist fees, platform fees, and total payment amounts, while sell events contain total payout information. Only the platform fees are used for revenue calculation
- **Key fields**: `platformFee` for protocol fees, `artistFee` for creator royalties, `totalPayment` for buyer amount, `totalPayout` for seller amount

### Component C: Expenses calculation
- **Purpose**: Determines total operating expenses, primarily token incentives paid to users
- **Logic**: Currently hardcoded to zero as Sound does not operate a token incentive program or have other tracked operational expenses. The expenses component references the token incentives model which explicitly sets all incentive amounts to zero
- **Key fields**: `token_incentives` set to zero for all time periods

### Final aggregation
- **Combining components**: Revenue is calculated by summing protocol fees from both primary and secondary sales. Expenses remain at zero. Earnings equals revenue minus expenses
- **Currency conversion**: All fee amounts are converted to USD using end-of-day price feeds and corrected for token decimal places before aggregation
- **Time aggregation**: Data is aggregated to daily boundaries using timestamp truncation, with forward-fill logic applied to ensure no gaps in the time series
- **Final calculation**: Earnings = Total protocol fees from primary sales + Total protocol fees from secondary sales - Token incentives (zero) = Total protocol fees

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

Sound.xyz

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