The event drew 2,000 attendees to a Brooklyn warehouse. Blue, green, and red strobe lights pulsed around the improvised club’s open bar in November. The Strokes performed after Beck, Chris Rock, and Aziz Ansari. Wylie Aronow was swaying with his girlfriend when she exclaimed.
Aronow had colitis, which causes digestive tract inflammation, a year ago. He dropped out of college and spent much of his twenties sick. Aronow, now known as Gordon Goner, helped start Bored Ape Yacht Club NFT.
The concert ended Ape Fest, a series of New York-based events for Bored Ape Yacht Club NFT owners. Earlier events included a yacht party and a gallery of nontraditional things. That week, the Bored Ape Yacht Club went from internet curiosity to physical subculture.
The Bored Ape Yacht Club has expanded. Aronow envisioned BAYC as a Web3-based Supreme. It now includes merchandise, live events, and a video game. Yuga Labs, founded by the Bored Ape Yacht Club’s four founders, has more than 100 workers and a $4 billion valuation.
Yuga Labs intends to show that Web3 is legal and the future in an industry full of scammers and fraudsters, as proven by the fall of the FTX exchange and its developer, Sam Bankman-Fried.
The Bored Ape Yacht Club is the symbol of NFTs. The lowest BAYC NFT is $88,000, making it impossible for new members to join. Mutant Ape Yacht Club, Yuga’s second NFT collection, starts at $19,000. Yuga Labs is creating a metaverse-based crypto-integrated game to attract Web3 adopters.
Bear market ape
Cryptocurrency is risky right now
Bitcoin and ether declined sharply in 2022 from their 2021 highs. Ether, a prominent NFT cryptocurrency, has dropped 70% of its value since its peak.
“Crypto winter” hurts people beyond the blood-red price graphs. When Terra stablecoin crashed in May, it took out billions of dollars and caused significant losses. Things have become worse since then. The cryptocurrency exchange FTX, once worth $26 billion, went out of operation in November. FTX buys and holds the coins its consumers request. This mandate led to $8 billion in debt, illustrating how unethical entrepreneurs can use cryptocurrencies’ lack of responsibility and trigger spectacular crashes.
Bankman-Fried, as SBF, was a trusted crypto figure in October. His fall from grace has hurt crypto’s reputation. Sen. Elizabeth Warren claimed the crypto business might harm the economy if not regulated.
John Reed Stark, former head of the SEC’s Office of Internet Enforcement and current president of John Reed Stark Consulting, says regulatory monitoring is “exceptional” and will only get worse. I’ve never seen a crypto company with the maturity or resources to handle such regulation. Yuga Labs is one of many companies the SEC is investigating as it examines the industry. Web3 must be user-friendly at a time when consumers are suspicious of crypto.
Aronow and Solano spend a lot of time playing World of Warcraft. It will be a quest-filled fantasy realm. Like Roblox or Minecraft, individuals can construct, explore, or hang out. In Minecraft and Roblox, many of the virtual places where players hang out, like Nikeland in Roblox, are constructed by players and brands. Otherside’s digital ownership sets it unique from other games. Unlike Roblox or Fortnite, items you buy or make are digital property. When completed, sell, trade, or give them away.
Web3 has had trouble attracting gamers. Even though games are an obvious next step for NFTs, gamers get angry when firms include them. People distrust NFTs and huge game businesses have utilized covert microtransaction techniques. Yuga Labs thinks players will change their attitudes once they own anything digitally.
Yuga believes Otherside can leverage crypto and NFTs to construct an in-game economy. NFTs are game-made items. Sell NFTs or make in-game services to get crypto. This isn’t a place for quick riches. Instead, the goal is to build a platform where physical and digital things are paid equally.
Solano is talking to games like Skyrim, which has a century modding community, and Dota, a full Warcraft III mod. Skyrim mod Forgotten City was a famous 2021 game. Otherside’s release date is unknown. They insisted on a staged launch. It will be produced by its community to use a decentralized cryptocurrency model. This has prompted a debate about whether the technology has real-world applications. Yuga’s metaverse bet will show someone right.
Ethereum’s first game
NFTs have been in games since the start. When bitcoin approached $20,000 in November 2017, Axiom Zen released CryptoKitties for ethereum. First ethereum game. CryptoKitties was a proof-of-concept, not a “game.” Axiom Zen made 35,000 CryptoKitties in the app’s first year. Let two Crypto breed to get a third. Some CryptoKitties were valued more because of rarer features.
Solano was new to crypto when CryptoKitties came out. In the fall of 2017, he and his brother-in-law put a few hundred dollars in ethereum. Solano liked cryptocurrency, so he “hooked” Aronow. Colitis causes Aronow to get lost in virtual worlds and rabbit holes.
NFT’s plan
CryptoPunks was the long-term NFT success story of 2017.
Larva Labs released 10,000 free pixelated avatars in 2017. It’s the first PFP collection. Some tokens are more valuable than others due to hairstyles, accessories, and apparel. It paved the way for NFT four years later. Most NFT pieces are from PFP collections with 10,000 pieces. Aronow and Solano used ideas from CryptoPunks. The Bored Ape Yacht Club is the second NFT playbook. BAYC was unique compared to other early 2021 projects. Bored Ape Yacht Club NFTs cost 0.08 ether, or $230. When “bonding curves” were popular, the price of minting an NFT rose as more were sold. In one scenario, minting the first NFT cost 0.1 ether and the final 100 ether.
BAYC was unique compared to other early 2021 projects. Bored Ape Yacht Club NFTs cost 0.08 ether, or $230. When “bonding curves” were popular, the price of minting an NFT rose as more were sold. In one scenario, minting the first NFT cost 0.1 ether and the final 100 ether. BAYC said owning NFT would have long-term benefits like free stuff, access to games, and more.
Bored Ape NFT holders can aid the brand by using their ape. NFTs gain value as their image spreads. Yuga Labs earns 2.5% of each BAYC NFT sale. No one knows if crowdsourced marketing will work long-term, yet NFTs employ it now. Aronow and Solano’s Bored Ape Yacht Club didn’t work. Solano and Aronow commissioned five artists to create the ape. These would be put into an algorithm to make the 10,000 cartoon primate avatars everyone knows and likes. Two friends were hired to write smart contracts and manage technology. Bored Ape Yacht Club NFT launch cost $40,000. After a few months, each artist was paid an extra $1 million for their efforts. Best reason to buy an ape: add a pixel to the dive bar bathroom wall every 15 minutes.
Bored Ape summer
Josh Ong bought a Bored Ape at the collection’s opening sale for $235 plus $15. Still his. On OpenSea, Ong’s ape has a $85,000 offer. Ong, who wears the same Hawaiian shirt as his ape, liked the BAYC art and paid 0.08 ether on it. Bored Ape Yacht Club did well after its debut. Its floor price ranged from $3,000 to $15,000 until July. Steph Curry bought an ape for $150,000 in August 2014, claims Ong. The NBA star used his NFT as his Twitter profile picture and joined the group’s Discord to talk with other holders. Justin Bieber, Timbaland, and Gwyneth Paltrow would join Bored Ape Yacht Club and use NFTs as profile pictures. Not all of the star focus on BAYC was good. Jimmy Fallon compared his Bored Ape to Paris Hilton’s in January.
As more celebrities showed off their apes on social media and the Bored Ape Yacht Club’s floor price rose, an NFT became a pass to an elite club.
The Mutant Ape Yacht Club was dropped the day after Curry bought his ape. Everyone who had a BAYC was given a vial of mutant serum. That serum could be saved or used to make a new Mutant Ape Yacht Club NFT from their existing Bored Ape.
The auction was in Dutch and started at 3 ether, which is about $9,000. It sold out almost right away, making another $96 million for Yuga Labs.
Around that time, Ong held one of the first Bored Ape Yacht Club events outside of the internet. It wasn’t much: a few people he’d met in the group’s Discord were going to an NBA game in New York. They considered how to promote the Bored Ape Yacht Club and bring people together. Before planning a yacht party, Ong set up two more get-togethers.
Ape Fest is a party held at the NFT.NYC convention for the past two years. Ape Fest 2021 was a yacht party, an open gallery with Bored and Mutant Ape art, and a Brooklyn warehouse party with the Strokes. The founders didn’t know if there would be enough demand or if it would be possible to move energy from Discord to real life.
The founders weren’t sure if there would be enough demand or if they could transfer Discord enthusiasm to real life. On the first day of Ape Fest, there was a 4 line for wristbands. Solano gave bracelets. Because the venue’s founders used fake names, most thought he worked there.
Doxed Ape Yacht Club
Aronow and Solano hid behind fake names at Ape Fest 2021.
Bad actors abuse Web3-accepted pseudonymity. Untrustworthy founders can launch a cryptocurrency or NFT project, make money, disappear before delivering the promised utility.
Even inside NFT, pseudonymity is divisive. In May, when it was discovered that Azuki, the creator of a popular collection, had abandoned two NFT projects, the practice’s wisdom was questioned.
Web3 Disney
Yuga Labs has dominated the NFT industry. Mutant Apes and Bored Ape Yacht Club are the second and third largest NFT collections. CryptoPunks, the first major NFT set, is the only collection to surpass BAYC. Yuga Labs acquired CryptoPunks from Larva Labs in March, along with the No. 11 Meebits collection.
“This is where we’re not like Disney,” Muniz answered. “We might own 30% to 40% of the market, but also our holders own 30% to 40% of the market, and I mean that in an IP sense. Our collections are some of the only collections that truly give away IP rights. … You have exclusive commercial IP rights, and that also means, by the way, Yuga does not.”
She cited Ape Fest’s Bored and Mutant Ape art galleries as an illustration. In each instance, Muniz required the ape’s consent of the people. Solano said Adidas didn’t consult Yuga Labs before using Indigo Herz in a World Cup ad.
As lucrative it has been, its focus on NFT circles limit its growth. Yuga must recruit more people into the NFT industry or design a product for NFT buyers to grow.
A big birthday break
The Bored Ape Yacht Club celebrated their first anniversary by breaking ethereum. Yuga held its largest public sale to date on April 30, 2022, when it introduced the Otherdeed collection. These NFTs are not designed to be used as profile pictures, unlike the Bored and Mutant Ape collections. They are virtual land titles in Otherside.
Otherdeed NFTs have two benefits. First, holders can participate in Otherside’s beta tests and influence game development. Second, once Otherside is online, an Otherdeed NFT’s land will become the owner’s in-game property.
Yuga Labs sold 55,000 Otherdeeds for $320 million. During that time, ethereum was inaccessible. Many people paid $1,500 for failed transactions, meaning they couldn’t mint NFT. This shows blockchain’s flaw.
Stark, who used to be an SEC enforcer, wonders if the NFT space can get away from all the speculation.
But in other areas where NFTs have been criticized in the past, there has been a lot of progress. The huge carbon footprint of ethereum, the blockchain on which most NFTs are built, is a common and valid reason why people don’t want to use them. In other areas where NFTs were criticized, progress has been made. Most NFTs are built on the blockchain ethereum. In September, blockchain added proof-of-stake. This changed cryptocurrency “mine” and cut carbon output by 99%.
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