The music NFT platform Sound.xyz has faced scrutiny over a royalty distribution vulnerability that led to creator losses. In 2023, a flaw in the platform’s smart contract system reportedly caused inconsistent royalty payouts for artists, with some receiving significantly less than expected from secondary market sales. This issue, tied to the platform’s 10% royalty cap, disrupted earnings for creators like Daniel Allan, who relied on Sound.xyz for substantial revenue. The lack of transparency in the platform’s centralized decision-making process exacerbated the problem, as artists had no input on fee structure changes. Sound.xyz has since addressed the issue with updates to its Sound Protocol, but the incident raised concerns about trust and reliability in Web3 music platforms.