NFTs have been around for five years, but the nonfungible token boom only truly began in 2021. It coincided almost perfectly with the launch of Bored Ape Yacht Club, a collection of 10,000 cartoon ape NFTs that's come to embody the whole industry. BAYC has over the past year become a bellwether for NFTs, just like bitcoin is for the crypto market at large.
When NFTs were at their hottest, in April, the entry price for Bored Ape Yacht Club NFTs was $400,000. Following the crypto crash, , that's fallen closer to $150,000. Far from the all-time-high, but insane considering these NFTs sold for about $200 apiece last April.
You've probably seen a BAYC, even if you didn't realize you were looking at one.
Bored Ape owners currently using their NFT as a Twiter profile picture include Timbaland (1.6 million followers), Eminem (22.6 million followers) and footballer Neyman Jr. (55 million followers). Jimmy Fallon and Paris Hilton are also BAYC holders, discussing their Apes in a (cringey) Tonight Show segment. Justin Bieber made headlines with his purchase of a $1.29 million Bored Ape Yacht Club NFT in February.
In June, Eminem and Snoop Dogg released a video clip in which the rappers are depicted by their respective Bored Apes.
Yuga Labs, the company behind the NFT collection, has already expanded the ecosystem to include a cryptocurrency (Ape Coin). More importantly, it's developing a "metaverse" MMORPG game called "Otherside." People holding Bored Ape NFTs are betting that the brand will completely break through and go mainstream. Already it's collaborated with brands like Adidas and Gucci, and last year a Bored Ape graced the cover of Rolling Stone magazine.
Like everything else to do with NFTs, the Bored Ape Yacht Club is contentious. Apes inspire jealousy among those who own and trade NFT art but confusion and suspicion among people who don't. Their value is instrinsically tied to ether, the second biggest cryptocurrency. That means NFTs like BAYC are likely to lose their lustre if crypto collapses -- something critics have prophesized for years.
Here's what you need to know about the collection.
Wait, what are NFTs again?
NFT is short for nonfungible token. These are tokens verify ownership on the blockchain. In essence, an NFT is like a certificate of authenticity for a fancy watch or the deed to a house. It certifies that the digital asset -- in this case a cartoon picture of an ape -- is legitimate, and denotes who the owner is.
The most ubiquitous criticism of NFTs is that they're useless because pictures can simply be right-clicked and saved for free. The point of NFT technology is that it makes public who the owner of an asset is. The idea is that anyone can buy a Mona Lisa print for a few bucks, but only one person or institution can own the original. Everyone in the world can save a BAYC jpeg on their computer, but only one person can own the NFT.
Whether that makes NFTs valuable is a judgement call. Some people think they'll revolutionize the internet, at last allowing digital goods to be bought and sold like real-world, physical products. Others think they're an environmentally-costly ponzi scheme.
Why are there 10,000 Bored Apes?
Broadly speaking, there are two types of NFT art. First, you have one-off visuals that are sold as non-fungible tokens, just like paintings in real life. Think thethat were sold at Christie's for as high as $69 million. Second, you have NFT collections like the Bored Ape Yacht Club, which are mostly designed to be used as profile pictures on social media. The latter have become the dominant style, where most of the money is spent.
Pioneered by CryptoPunks in 2017, NFT collections are a little like Pokemon cards. You have a set amount -- usually between 5,000 and 10,000 -- which all have the same template, but each has different attributes that make them unique. In the case of BAYC, there are 10,000 apes, each with varying fur types, facial expressions, clothing, accessories and more. Each attribute has a rarity component, which makes some much more valuable than others.
These properties are displayed on OpenSea, the main platform where NFTs are traded. On any given NFT's page, its properties will be listed as well as the percentage of NFTs in the collection that share the property. Usually, anything under 1% is considered rare. For instance out of 10,000 apes only 46 have solid gold fur, making these particularly valuable.
As noted, the "floor price" for the project -- what you'll pay for an ape with common traits -- is currently about $150,000 (85 ether). Apes with the golden fur trait are rare, and so sell for much more. One sold in January for $1.3 million. Another with gold fur and laser eyes, two sub-1% traits, went for $3 million.
BAYC is the biggest NFT project of this kind, recently eclipsing CryptoPunks, which is credited as the first "pfp" (profile picture) collections. Other notable sets .
What makes Bored Ape Yacht Club valuable?
This is a complicated question. The short answer is that, and like all status symbols their value comes from perception and branding rather than utility. Just like a CEO may try to communicate business acumen with a Rolex or a luxury suit, people who trade NFTs display their success with a Bored Ape Yacht Club NFT. Their argument is that NFTs are better status symbols than real-world items, since when used as profile pictures they can be seen by millions of people on Twitter and Instagram.
Let's start at the beginning. Bored Ape Yacht Club was launched last April. It took 12 hours for all 10,000 to sell out at a price of $190 (0.08 ether). The price of Bored Ape NFTs rose steadily until July, when they spiked dramatically and the collection became a blue-chip set.
What makes an NFT collection successful is highly subjective. Broadly, it's a mix of four things: Influencer or celebrity involvement, mainstream potential, utility for members and community appeal.
The first and second are obvious. When famous people own an NFT, it makes others want to own one too. When celebrities like Jimmy Fallon and Justin Bieber bought into Bored Ape, it caused a run in sales and hype -- and hype is what the NFT market is all about. People buying into BAYC today, at a steep price of over $150,000, are likely to believe that the brand could one day adorn more than celebrity social media accounts: Netflix shows, popular games and Hollywood movies are the goal.
Thirdly, utility. Most NFT projects claim to offer a utility of some sort, which means it does something other than act as a profile picture. That can be access to play-to-earn games or the option to stake an NFT in exchange for an associated cryptocurrency.
Bored Ape Yacht Club has done a few things to keep owners interested. First, it created the Bored Ape Kennel Club, offering owners the opportunity to "adopt" a dog NFT with traits that mimic those of the Bored Apes. Another freebie came in August of 2021: Digital vials of mutant serum. Owners could mix their Bored Ape with the serum to create a Mutant Ape Yacht Club NFT (see below).
The advent of this second collection last August is when the Bored Ape brand really popped. Seen as doing innovative things with NFT technology, and coinciding with a huge amount of money entering the space that month, Bored Ape Yacht Club started to be seen as the premiere NFT brand.
Both Kennel Club and Mutant Ape NFTs now sell for a lot. The Mutant Ape Yacht Club collection entry point is about $30,000, while Bored Ape Kennel Clubs are selling for about half that. (Remember, these were free to BAYC holders.)
Last but not least is the community that's built around a collection. NFTs double as membership cards to holder groups. The more valuable people find belonging to that community, the less they'll want to sell their NFT. Bored Ape Yacht Club has organized meetups in New York and California, and there have been Bored Ape get-togethers in Hong Kong and the UK, too. This past June, BAYC holders were treated to "Ape Fest", a festival that included performances from Eminem, Snoop Dogg, LCD Soundsystem and Amy Schumer.
But "community value" also extends to financial self interest. The higher the floor price on a collection, the more crypto-rich traders you can expect to be holders. These savvy investors trade information within locked Discord groups, providing valuable (sometimes insanely valuable) tips to one another. Sell your NFT and you'll no longer be privvy to such tips.
Who's behind the Bored Ape Yacht Club?
The Bored Ape Yacht Club was developed by Yuga Labs. At the time, Yuga Labs consisted of four people, all of whom went by pseudonyms. There's Gordon Goner and Gargamel, who are the two co-founders, and two friends who helped on the development side, No Sass and Emperor Tomato Ketchup.
All four went exclusively by their pseudonyms until February, when BuzzFeed reported the identities of Gordon Goner and Gargamel. Gargamel is Greg Solano, a writer and book critic, and Gordon Goner is 35-year-old Wylie Aronow. Both went on to post pictures of themselves on Twitter alongside their Bored Apes. Following that, Emperor Tomato Ketchup and Sass both "doxxed" themselves -- that is, revealed their identity -- by doing the same.
The actual art was created by freelance artist Seneca, who's not part of Yuga Labs.
Yuga Labs has big plans for its Bored Ape Yacht Club brand, plans that are both on- and offchain. (That is, both on the blockchain and in the real world.)
Start with more blockchain stuff. In March, Yuga Labs released Ape Coin, its own cryptocurrency. All Bored Ape holders were airdropped just over 10,000 Ape Coins at launch, worth around $100,000 at the time (now about $70,000). Ape Coin will be the primary currency in Otherside,.
Metaverses are big, virtual spaces shared by hundreds or thousands of people at a time. They've existed for a long time, think Second Life or even Fortnite. Blockchain-integrated metaverses are different only in the sense that the land, building and items within the world are owned by users as NFTs. Yuga Labs has already sold land for the metaverse,.
Out in the physical world, the Bored Apes are integrating themselves into fashion. Adidas launched its first NFT project, Into The Metaverse, in collaboration with several NFT brands, Bored Ape Yacht Club chief among them. Collaborations between Adidas and BAYC on both virtual and physical clothing are coming soon.
The Bored Ape Yacht Club brand has popped up in other industries too. Literally in the case of food: A pop-up restaurant in Los Angeles was recently turned into a permanent burger spot. In January, a mobile game, Apes vs. Mutants, launched on both the App Store and Google's Play Store. (Reviews have been unkind.) Another mobile game is in production, scheduled for Q2. Bored Ape figurines by Super Plastic are on the way too.
More unusual, though, is what people are doing with their apes. Owning a Bored Ape NFT gives you full commercial rights to it, and holders are taking advantage of that in some creative ways. One Bored Ape owner set up a Twitter account for his ape where he created a backstory, turning him into Jenkins, a valet that works for the Yacht Club. Jenkins is now signed to a real-world agency, and . Universal Music Group has invested by signing a band consisting of three Bored Apes and one Mutant Ape.
You might think NFTs are silly -- and terrible for the environment -- but don't expect the Bored Apes to disappear anytime soon.