November 2023

Limewire and Content Creation in an AI World

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In early 2022, our digital asset Fund 4 invested into the newly relaunched LimeWire. We wrote up our investment case and discussed how LimeWire was sitting at the intersection of NFTs and music.

Since that investment, LimeWire has gone from strength to strength. The platform went live, and a host of musicians signed up, conducting NFT drops and offering exclusive content. Then earlier this year, LimeWire went through somewhat of a strategic pivot. Rather than just allowing users to consume music and entertainment, they decided to use AI tools to help users create their own content on the platform. The new LimeWire Studio has struck a chord and is now onboarding 10,000 new users per day. This month we will bring you back up to speed with LimeWire and will outline the possible future of content creation in an AI-driven, blockchain-powered future.

By way of a quick refresher, LimeWire is not a new company and started back in the early 2000s. It was a file sharing platform and was shut down by a court order in 2010 due to copyright infringement. At its peak, the platform had over 50m monthly active users and was a household name alongside the similarly fated Napster. Leveraging the strong LimeWire brand, new management came in a couple of years ago with a vision to re-launch the platform as an entertainment hub that would utilise blockchain technology and NFTs. The new team raised money from strategic investors, including the likes of Kraken Ventures, Arrington Capital,, the musician deadmau5 and of course CMCC Global.

When the platform relaunched, the focus remained on being a home for music lovers. It allowed musicians to upload both visual and audio content in an NFT tokenized format. A digital wallet is integrated into the platform and customers can store their NFTs either on the website or can withdraw to their own wallets.

After the launch, LimeWire hosted a number of high-profile artist NFT drops and made a string of announcements. The company struck a deal with Universal Music Group for music NFT licensing, opening up the LimeWire collectibles marketplace to all artists under the Universal Music Group umbrella. The collections that it released incorporated original music tracks and artworks, as well as in-person experiences such as backstage passes or meet-and-greets and in Travis Barker’s case, a real drum kit. Collectors were able to purchase exclusive and unreleased music, video content and digital artwork in the same way they would collect a rare painting or buy a limited-edition vinyl of a song.

n late 2022, the LimeWire team noticed an upcoming trend with AI generated images and the start of AI generated music. While the platform was gaining traction through NFT drops, there was a missed opportunity. Users on the platform were treated as consumers of content and not as creators. The LimeWire team reasoned that with the advent of AI creation tools, many more people will start becoming content creators. There could be demand for a simple to use studio tool that allows people to use complex AI models in a UX friendly way. This was the rationale behind the creation of the LimeWire AI Studio.

To supercharge this pivot towards AI content generation, the team started to consider possible acquisitions of AI companies. Two months ago, it was announced that LimeWire had acquired BlueWillow, a leading image generation model, boasting the world’s 2nd largest Discord community with over 2m users. This community is wildly active and has generated over 500m images in 2023.

While the acquisition is recent, there have been two immediate impacts. Firstly, the sophistication of the LimeWire AI Studio has improved significantly by gaining exclusive access to BlueWillow’s AI models. As early users of the platform, we have noticed this improvement and are impressed by the quality of text-to-image generation that can be created in the studio. Secondly, LimeWire’s clean user-friendly interface is now open to BlueWillow’s community, not only allowing access to the AI models, but also allowing users to monetize their content through things like ad-revenue sharing in the $LMWR token. LimeWire has seen significant user growth and is now onboarding 10,000 new users a day.

This acquisition marks a clear shift in direction for LimeWire. Its mission is now to become the “number one platform to create, publish and monetize content for any type of creator”. Starting with text-to-image generation, the next step is for the LimeWire Studio to enable AI music and then AI video generation.

For example:

  • Today a user can type in a text prompt to generate a picture, such as “Mozart wearing headphones and playing a DJ set”.
  • With text-to-audio generation (the next iteration), a user could prompt to “convert Mozart’s Requiem in D minor into a 3-minute electronic dance track”.
  • Finally, the user will be able to user text-to-video generation and could prompt to make a video showing “Mozart DJ-ing to the throbbing crowd as he headlines Glastonbury”.

While the BlueWillow acquisition means that LimeWire is generating its own AI models, its aim is to become an aggregator of models and not the sole creator. LimeWire aims to become the leading platform for creators to generate content through the slick and easy-to-use interface. But more than this, LimeWire aims to help creators monetise. This is where blockchain technology comes into its own.

n an AI future, monetising content is challenging. If I use AI to generate a track that mixes a drum beat of Metallica with the distorted melody of a Beatles song and vocals that merge Adele with Frank Sinatra, then who should get paid royalties? If that track is then used and modified by another creator and becomes a hit single, should I also get paid? This is going to be a headache for future music industry execs. But already, we know that tracking the data surrounding the creative process on-chain will be hugely beneficial in sorting future royalty payments. With blockchain technology baked into the LimeWire platform, it is well positioned to track AI model usage and could become a central hub for facilitating payment streams to the artists of the future.

The market is excited by LimeWire’s recent moves, with the price of the $LMWR token up over 230% in the last 3 months. The token is integral to the operation of the platform. It is used as a payment token, allowing users to access different AI models and a portion of ad revenues are used to buy-back the token on the market, with some of these being given to creators and others burned. Our Fund 4 was an early-stage investor into LimeWire. This investment is currently marked at cost in the fund, given that our $LMWR tokens are vesting and are not yet liquidly available to the fund. Markets price the liquid token currently at 4x our investment.

We are extremely excited by the direction that LimeWire has taken. There will be no stopping AI generated art and the quality of it is improving rapidly. Over the last year, the improvement in text-to-image generation has been noticeable and many people have had their eyes opened by the power of ChatGPT. While text-to-music AI tools have not yet hit the mainstream, it is inevitable that they will and when they do, we will enter a new era of music creation. Positioning itself at the center of this cultural revolution, LimeWire will once again become a disruptive force in the world of music and entertainment.