Madster (initially called Aimster) appeared in Napster's wake in August 2000 and was intended to be a P2P file sharing service. It was shut down in December 2002 as a result of a lawsuit by the Recording Industry Association of America (RIAA).
According to John Deep, a professor at Rensselaer Polytechnic Institute, the Madster software was originally inspired by his daughter's use of instant messaging software. His idea was to combine instant messaging with file sharing. John Deep's daughter Aimee had an interest in providing privacy to her online friends; instant messaging was lacking when it came to privacy protection.
The Madster service was initially called Aimster, but it was later renamed to Madster due to concerns that the Aimster name infringed AOL's AIM (AOL Instant Messenger) trademark. The Madster software allowed users to share files via instant messaging services. In particular, users could share files specifically with users who were included on a "buddy list" with the advantage of privacy.
Around March 2001, support for encrypted network communications was included in a new release of the Madster software (at the time, the Aimster name was still in use.) Among other things, the Madster service hoped that the US Digital Millennium Copyright Act would have the effect of prohibiting others from monitoring the encrypted Madster network communications. In addition, the Madster operators argued that the encryption meant that they could not be aware of any copyright infringement that took place. Later on, around April-May 2001, a service was introduced wherein a network including tens of thousands of people could be searched for music and other content and new users would by default be added to this network although users could choose to instead restrict trading to buddy list members. At one point, the company announced a premium service that was available for US$4.95 per month.