ICO Review: Choon ($NOTE)

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Disclaimer: I was not paid for this review nor have I invested in this project. On my ICO rankings sheet Choon ranks in the "I would consider" category (all projects highighted in yellow). Also, my sheet is a bit more unconventional since no project will score above a 70%. That's just how my sheet is configured.

It has been awhile since I published a dApp review and thought it might be time to publish a new one. The last one I covered was Mithril, a social media platform similar to Snapchat. A new project called Choon came across my desk and what caught my eye immediately was it was founded by Gareth Emery, an electronic music producer I listen to. Naturally I was curious so let's a look.

Choon is a music streaming platform (think Spotify or Soundcloud) where independent artists can post their music and earn NOTE tokens from their fans. This is the third platform (Tune Token, Dsound by Steem are the others) I have come across trying to disrupt the music industry. When I analyze industries in their infancy I look for whether there are multiple startups tackling the same problem, however in slightly different ways. Competition breeds innovation as well as provides confirmation that this is indeed a problem to be solved.

Before reading my review it might help to watch Choon's YouTube introduction video.

Centralized Streaming Services

So why do we need Choon or any of these crypto based music projects if we already have Spotify or Soundcloud? Although cloud streaming platforms are widely used, they are hard pressed to build highly profitable and sustainable businesses. Music labels still hold the pole position in this space due to their incredible network effects. The few, valuable artists in the space still turn to music labels for their ability to provide a wide variety of services at scale that no one else can: domestic and international marketing know how, music tours, upfront financing early in their careers to free up musician’s time to write/record full time, and PR expertise. This suite of gadgets in their toolbox draws in artists at various levels of their career. Over time, a handful of artists make it to stardom and stay on with the labels for their all encompassing expertise. Streaming providers such as Soundcloud and Pandora are then forced to make deals with the few, concentrated proprietors of these music libraries. With such a strong bargaining chip in their favor, the labels exert powerful supplier power effects (see Porter’s Five Forces) on the streaming providers.

We’ve seen this before with Netflix’s streaming business. Netflix does not carry every title out there and recently lost Disney content since its owners just launched its own streaming service. Netflix has hedged against this risk with a vertical strategy by creating their own content. Over the coming years if Soundcloud or Spotify do not find a long term solution their investors may wear thin and these companies ultimately become acquisition bait. Choon’s strategy of focusing on independent artists who wish to own their content from creation to distribution could pick up steam and serve as a valuable hedge against the dominance of music labels.

The Team

There’s not much for me to say about the team from a technology perspective. When you think about the infrastructure you’re really just looking at a smart contract and a centralized music streaming platform. Choon should be judged more for its business fundamentals rather than its underlying technology. For that reason I spend more time on the business risks section down below.

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Token Metrics

  • Ticker: NOTES
  • Standard: ERC20
  • Hardcap: $16.5M
  • Public Sale: July 2nd, 2018
  • Total Supply: 2,000,000,000 NOTES (only the token sale and advisory sales will be in existence at TGE)
  • Tokens for Sale: 25%, 500,000,000 NOTES
  • Block rewards details:
    • 50% of NOTES total supply distributed over first ten years
    • 375,000 NOTES per day
    • Distribution based on number of streams
  • MVP: TGE will happen after platform launch (mainnet launch)

Features of Choon

Many of the items below are less technological but more along the lines of business execution, which in many ways is refreshing to see. An often dodged question when talking to projects is “what is your business model?”. Choon focuses on its business strategy and for a dApp that goes a long way in evaluating its potential. Whether it succeeds or not is going to depend on the team's combination of skills, timing, and a little bit of luck.

Hybrid Architecture, Portions are Centralized

The NOTES token itself is an ERC20 standard token so artists will own their own decentralized assets. But storing files and playing music off of the Ethereum blockchain would be prohibitively expensive. The technology infrastructure needed for this would be centralized. If an attacker wanted to take down the network they could coordinate a hack against Choon. Other centralized components of the platform include an ownership registry maintained by Choon, and a record of payment vouchers to NOTES holders. Decentralized components include the Choon Ethereum smart contract that processes the payment vouchers to voucher holders, and another Ethereum smart contract to mint the daily block reward.

Artist Payments

Similar to Steem’s block reward mechanism, Choon will distribute NOTES to artists based on their contribution and ability to generate listens. The amount of the block reward is mentioned above. Choon will also have an 80/20 split where 80% of proits will be plowed back to the artists compared to the streaming music model of 70/30 split where 70% goes to labels of which 10-15% of goes to the artists.

Listener Payments

As a music listener Choon will offer payments as well. Similar to Steem’s curation payout, fans who create playlists with songs enabled for payout will receive NOTES for high quality playlists that are leveraged by others in the network. Artists can also tip their fans directly. I imagine this is a very powerful feature that should be highlighted more when they go to market. If an artist ran a “giveaway” directly I can imagine the increased hype behind a direct relationship between fan and artist.

Smart Remix Contracts

Sampling and remixing music is common in the music industry. Normally royalties are settled and paid by the complicated web of contracts in the music industry. Choon introduces its Smart Remix Contracts which will allow artists to volunteer their music to fellow Choon artists with the ability to decide what should be paid between the two parties.


Choon’s subscription packages will be free for the first twelve months as it ramps its library. After that, listeners can pay either in NOTES or in fiat.

Smart Record Contracts

Choon offers programatically how artists will split their payments to those who work with them. This is a great use case of smart contracts replacing old paper contracts. Artists can decide who gets paid what, when, and where.


Payment in crypto

Will independent artists want to be paid in cryptocurrency as opposed to fiat? Ultimately, this is macro level risk inherent to all "payment in crypto" rewards platforms. Artists have multiple choices when it comes to publishing and distributing their content such as centralized platforms such as Soundcloud and Mixcloud. What they trade away in licenses to their creations, they gain in platforms that already have a large and engaged user base. For the independent artist, earning a living is not a goal early in their career. Broadening exposure and working their way up the music industry ladder is paramount.

Network spam

If rewards are paid out based on listens, how will the network prevent independent artists colluding with others to listen to specific content with multiple accounts.

Choon will need to amass an impressive library before charging

Without a valuable library of music it will be difficult to attract subscribers. One thing Choon can do is leverage Gareth Emergy’s relationships to bootstrap the music library with quality artists or joint partnerships with other labels.

Musicians just want to play music

Choon will have to develop an ease-of-use smart record contract. Musicians will likely focus on creating music and outsource the management of their business dealings to others. That would defeat the purpose of smart record contracts in my view.

Price manipulation

What happens if the music labels sense a credible threat and secretly launch attacks against the value of NOTE. Long term depressed NOTE prices could drive away the financially motivated artists on the platform. There may be artists less motivated by finances and more motivated by broad exposure of their work.

Copyright infringement

Choon uses the Gracenote API (used by Apple, Spotify) to scan tracks prior to content upload onto Choon's platform. Choon will also remove accounts infringing on content. With these processes in place most issues should hopefully be caught in time. Choon would do well to amass a decent warchest to head off any legal battles just in case.


Excellent use case

Disintermediating middlemen to allow for more direct payments is one of the killer applications of cryptocurrencies. Independent artists just starting out could potentially use Choon to build their audience while earning a bit here and there.

Platform beta already launched

Compared to other cryptocurrency projects Choon already has 2,000 artists as of June 2018 on its platform. Last year many projects launched with nothing more than a whitepaper. Reading through the whitepaper it’s very clear Choon is focused on the business strategy and operations. I visited their website and just started playing music off of it.

Low market cap out the gate

I typically use a formula to define what the multiple would be to crack CoinMarketcap’s top 100 coins. At the time of this writing that figure is roughly $150M. Roughly 25% of NOTES tokens will be sold and another 1.25% held by advisors. Compared to premined coins, Choon’s value lies in its ability to grow its user base and its user engagement. Ultimately, Choon hopes this is a direct relationship where more listeners and more artists will equate to higher network value. Alright let’s look at the math.

With a hard cap of $16.5M and 26.25% tokens for sale (25% sale, 1.25% advisors - glad to see small percentage to advisors here) that would equate to an implied market cap of $62.85M. To get to $150M and crack that coveted top 100 it would need a 2.38 multiplier. If Choon hums along and cracks that top 100 (similar to how Mithril landed at #96 on day 1) it could mean a nice little gain for investors (P.S. Not financial advice).

Gareth Emery

Not sure if this is a real benefit, but the fact that this platform was conceived by a long time, successful artist indicates there is a need for artists to cut out intermediaries and connect directly with fans.


Choon represents an experiment in the “direct rewards for work” space. Cutting out intermediaries for independent artists in theory makes perfect sense. The investment case for Choon is one based on the belief that eventually certain networks will be the primary hub for specific activities such as music, videos, the gig economy. From the perspective of a feedback loop, the more artists producing great independent work the more listeners join the platform the more rewards earned by artists the more artists join in on the fun. Bootstrapping a network to get to those coveted “network effects” levels of Facebook or Spotify is a daunting task. With celebrity management behind Choon the real task is acquiring great talent early. Overall I am positive for the use case of the platform but I believe acquiring users will be a daunting hurdle in the early days of Choon. Lastly, I am actually considering picking up some Choon if it hits exchanges primarily because of three reasons: 1) the platform is already in beta, 2) the implied market cap is incredibly low, and 3) I am familiar with the Steem ecosystem (see here for my explanation of its ecosystem) and how block rewards incentivize content creators. The primary difference is that Steem is a highly unequally distributed platform (see my article on why Steem is worse than North Korea in terms of equality) while Choon’s distribution looks far more equal. Decide for yourself if this project is for you.

Thanks for reading.

Other content projects

  • High end art: Codex Protocol, Fres Trust (Elastos ecosystem), Fresco (Elastos ecosystem)
  • Music: Choon, Tune Token, Dsound (ecosystem)
  • Video: ViewChain (Elastos ecosystem), Dtube (Steem ecosystem)


Quantalysus publishes blockchain research and analysis for the crypto community. Please follow on Twitter, Steem (please follow and upvote if you can – thanks!), Telegram channel (New!), and Medium to stay up to date.

My ICO rankings (anything above a 60 by the way I would seriously considering investing in… call me a harsh grader)

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думаю что с вами соглашусь, можно рассмотреть это ICO

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Great analysis, mate! Have been following this project for about three months already. It has potential but too little hype, which unfortunately matters a lot nowadays.

Wow you're way ahead of me on this one :) What else are you looking at?

Good writeup! I must admit I didn't have time to fine-read the entire article today, but I will for sure when I'm back from my vacation. As well as give my feedback =)