Introducing Streaming Payments for Ujo with Connext Payment Channels and Dai

Ujo Team
Ujo Music
Published in
5 min readMar 28, 2019

TL;DR: Ujo now supports streaming payments via Connext’s payment channel technology and MakerDAO’s Dai, an Ethereum stablecoin valued at $1. This feature is still in testing, but we’ll be refining it further over coming months.

Ujo’s mission is to make artists more money. That is why we’re excited to announce our newest feature on the Ujo Portal: streaming payments.

In December, we released the first complete, public version of the Ujo Portal that allowed fans to download an artist’s music in exchange for ETH. Now, music groups will receive payments in Dai, a decentralized stablecoin, for all streams by logged in users.

Payment Channels: The Why and How

State channels are a “Layer 2” scaling technology for Ethereum, allowing users to transact directly amongst themselves using a networked, off-chain layer that avoids the gas fees and block confirmation times of the Ethereum mainnet. Payment channels, meanwhile, are a subset of state channels optimized for peer-to-peer payments. We’ve partnered with Connext, a leading provider of payment channel infrastructure who has open sourced their software. Without Connext, we could not have delivered payment channels to our Portal as quickly as we did.

“Moving dApps into the mainstream will rely on fast, user-friendly, and economically viable P2P payment infrastructure. We believe that Ujo is leading a shift in how users pay for content on the internet and we’re thrilled to be working with MakerDAO and Ujo to drive value directly from consumers to creators.”

- Arjun Bhuptani, co-founder of Connext.

We integrated Connext’s payment channel implementation to minimize fees per transaction. Since streaming pay events are frequent and low in cost, it didn’t make sense to process every transaction on Ethereum Mainnet. By using payment channels, transaction gas costs are only paid when a channel is closed and money is withdrawn. We’ll conduct an in-depth technical overview to explain how this works in detail in a future post.

Dai: Mitigating Volatility in Payments

Apart from using Connext’s Payment Network, we’re equally excited to introduce Ujo’s use of the Dai stablecoin. “A core benefit of Dai is that it brings the stability and utility of money into the future by unlocking the power of a decentralized stablecoin,” said Rune Christensen, CEO, and co-founder of MakerDAO. “In working with Ujo and Connext to enable streaming payments for artists, we are doing our part to help creatives benefit from the speed, efficiency, and security that comes with the blockchain.”

Additionally, Grammy-winning musician RAC, a big fan of Ethereum and decentralization weighed in:

“It’s been really exciting to watch the Ethereum ecosystem develop over the years since we released the first record. State channels and stablecoins address the key bottlenecks in the system and bring us closer to the promise of this technology. I’m especially happy that a decentralized stablecoin (MakerDAO’s Dai) is a reality and eliminates one of the main complaints about crypto, price volatility. Streaming royalties using this technology brings it to parity with legacy infrastructure, and now the real fun part begins.”

Streaming Payments on Ujo: Proof of Concept

The streaming payments feature has gone from a long-standing idea at Ujo to, finally, implementation. When we built out the Portal, we started out simple with digital downloads. Now, with streaming payments, we‘re demonstrating an even more user-friendly way to demonstrate royalty payment splits for music groups with smart contracts. The transaction throughput per second and gas cost associated with ETH payments turned out to be the biggest obstacle for implementing and supporting stream payments. These challenges led us to explore using Plasma Cash. We inevitably settled on payment channels as our Layer 2 solution.

Automatic streaming payments on Ujo.

We built this first version as lightweight as possible, think ‘MVP’ of ‘MVP.’ We had one goal; to launch a pay event for streams in a few weeks. We were already in touch with Connext in regards to using their payment channel infrastructure. When they announced that they were rolling out a Dai Card stablecoin integration, we eagerly jumped at the opportunity.

In this release, we are restricting the ability to deposit and withdraw funds. To test our PoC, we’re self-issuing the first funds by giving $1 worth of Dai to a select amount of user’s Dai cards when they log in. During this test phase, all streams will pay one cent (USD) in Dai to the beneficiaries of a given song. This development satisfies our goal of getting more money flowing in the direction of artists.

In the near future, we’re building out support for users to deposit their own money and withdraw to their mainnet wallet. Beyond that, we’re incredibly excited to give music group’s the freedom to set their own rate for streaming prices. Embedded flexibility for artists to control their works is a permanent tenant of our mission.

Since we began our mission in 2015, we have continually researched, developed, and uncovered a glimpse into the future possibilities of artist and fan interaction. This journey has required us to dive head-on into pushing its boundaries and equally exploring in depth the world of music licensing. We still maintain that the blockchain ecosystem is in its early stage of changing the way the world of music operates, but decentralized streaming payments bring us one step closer to that future.

Check out your Dai Card on Ujo — A limited amount of new and existing users to log in will receive $1 to get started!

Disclaimer: The views expressed by the author above do not necessarily represent the views of Consensys AG. ConsenSys is a decentralized community with ConsenSys Media being a platform for members to freely express their diverse ideas and perspectives. To learn more about ConsenSys and Ethereum, please visit our website.

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Published in Ujo Music

Ujo Music is an Ethereum based, ConsenSys backed music software services company for the modern economic landscape of music.

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