Bored Ape Yacht Club NFTs: Past, Present and Future
If you don't already know anything about NFTs then before you read on please check out a couple of articles that I have written where I explain what NFTs are and how they are being used (Article 1 / Article 2). OK, so now you get the gist of how these novel pieces of blockchain code are being utilised, particularly by artists, in this article I will now dive into one particular group of NFT collection kings known as 'Bored Ape Yacht Club' (BAYC). I'll break down the full story behind BAYC, what they've done and what they've got planned in the future.
The king of NFT collections
The floor prices (NFT terminology for the cheapest NFT in a collection) of some of the top collections have gone absolutely ballistic in recent months. Bored Apes, CryptoPunks, Doodles, and Cool Cats saw over 30% gains in just the last 7 days alone (since the time of writing). To round out ‘The Big Five,’ CloneX is up over 100% (Comparatively, their floor was the lowest of the five). Azuki, one of the newest serious projects in NFTs, saw their floor propel to just under 15 ETH / $42,000 (at time of writing), from just 4 ETH / $11,000 in a little over a week. These are quite insane gains in NFT projects in a little over a week. As the saying goes: “a rising tide lifts all boats,” and even smaller collections profitably rode those waves. However, the market is still being lead by the king of all collections: Bored Ape Yacht Club (BAYC). Their floor soaring to an all-time high of 119 ETH / $333,000 (at time of writing), they are by far the most valuable NFT. For comparison, the second most valuable collection is CryptoPunks, and their floor stands at 84 ETH / $235,000.
What is Bored Ape Yacht Club?
The legend of the Bored Apes is that they spent all of the 2020s irresponsibly trading cryptocurrencies and made so much money that they are bored to death so spend their days hanging around the Yacht Club dive bar.
(Bored Ape Yacht Club logo taken from their website)
In April 2021, the Bored Ape Yacht Club was launched by its creators, Yuga Labs. The project is an NFT collection of (you guessed it) Bored Apes that are meant to act as your profile picture on social media apps (as well as being unique pieces of art). There will only ever be 10,000 Bored Apes, each of which are entirely unique.
Finally, your Bored Ape is your membership pass to (once more, you guessed it) the Bored Ape Yacht Club. Membership benefits include anything the developers and community come up with.
(Image taken from BAYC website)
The thesis behind the creation of BAYC is twofold:
1. NFTs can have utility beyond art authentication.
Although a Bored Ape exists as a unique piece of art, the greater utility is that it is a provable stake in a club — that the ownership of the token grants you access to a special community. What intrinsically comes from this “access”? Multiple things. For one, the support of the community is unparalleled. “See Ape, Follow Ape” is a common phrase you’ll see on Twitter, which is one of the unwritten rules of the Yacht Club — all Apes must follow all other Apes! This support alone can give someone the platform to grow their audience. Think about how difficult it is to grow a large following of 6,000. Community benefits extend beyond support though. The BAYC, is actually filled with some quite intelligent holders — Apes will often share investment ideas together, explain their NFT journey for other Apes to learn from, and even collaborate on projects together. Oftentimes, Apes with a lot of technical knowledge will help other Apes with things such as maneuvering wallets and helping demonstrate safe practices across Web3. Finally, the “access” to the Yacht Club afforded by your Bored Ape also gives you claim to everything the developers create for Apes. Many times these “creations” end up becoming super lucrative for holders of Bored Apes — but more on that later.
(Image taken from BAYC website)
2. Digital avatars will be a major part of our future.
Where Web2 thinkers see Bored Apes as profile pictures, Web3 thinkers see them as digital avatars. Although in their current form Bored Apes exist predominantly as profile pictures on social media sites, the potential holders believe they have in representing their owners goes much, much further. The big bet by holders of Bored Apes is that the metaverse will exist in the far-reaching and all-immersive way people have theorised it to become. In short, the metaverse is the idea that most, if not all, of our technological activity will move to an entirely virtual world (powered by Virtual Reality Headsets). It doesn’t stop there, either — many experts also suggest that many of our real-world tasks, events, habits, or routines, will, in some way, be moved to the metaverse.
The metaverse is perhaps the most interesting and important concept in all of blockchain technology, and I highly recommend you do more research on it. For today’s purposes I need to bring this back to Bored Apes. So I hope you have some understanding of Bored Apes and the metaverse, How might the two relate, you’re probably wondering? As digital avatars, Bored Apes were created with the focus of the metaverse in mind. It is one of the biggest goals (if not the biggest goal) of the Yacht Club — to have our Bored Apes act as our digital skin in the metaverse.
What will this look like in practice?
If you play Fortnite in the metaverse, you will do so as your Ape. If you go to metaverse events, you will do so as your Ape. You might ask, why would I want to look like an Ape? Why wouldn’t I just want to be me? Many people believe digital skins are going to be the norm. Why not switch it up and have some fun? Secondly, we come to the idea of status. Why would you spend lots of money on a Rolex when your phone can tell you the time just fine? The Rolex signals something about you that the phone cannot — a certain level of wealth, prestige, and status. So, it’s possible that when we are given the choice between appearing as a Bored Ape or appearing as ourselves, we might prefer the Bored Ape. Why? In something as simple as the digital skin you wear, you can communicate your history as an NFT OG, wealth in the fact that you have the money to own the avatar, and clout as a member of a community made up of other highly successful people. Now let’s have a look at the detailed history of all of the membership benefits Bored Apes have experienced so far.
1. June 2021 - Bored Ape Kennel Club
In an effort to expand the BAYC ecosystem, the developers released a companion NFT collection known as the Bored Ape Kennel Club, roughly a month and a half after launch. Every Bored Ape Yacht Club owner was given a Dog for free. Although the Dogs in the BAKC don’t offer official membership to the Yacht Club, they were devised as a low-tier entryway into the BAYC family. Today (as of time of writing), Dogs are worth 10.75 ETH. That’s around $30,000 dollars of value given to Bored Apes holders for free. (Side note: for the first month of trading, all fees earned by the BAYC from Dogs were donated to animal charities.)
2. August 2021 - Mutant Ape Yacht Club
In almost the exact same vein as the BAKC, in August of 2021 (the peak of the NFT market so far), the BAYC released their first official collection that does offer membership to the Yacht Club (if only partial) — the Mutant Ape Yacht Club.
(Image taken from @BoredApeYC Twitter)
The release of Mutant Apes was a highly anticipated NFT collection. In fact, many believe it was the reason the NFT market faced such a massive crash quickly thereafter. So how did the mechanics of the drop exactly go down? All Bored Apes were airdropped a Mutant Serum, of which there were three different rarities.
M1 — the most common. Supply: 7,500
M2 — rarer than M1, but not the rarest. Supply: 2,492
Mega — the rarest serum by far. Supply: 8
(Image taken from OpenSea.io)
So, what is a serum and how does one work? Once a Bored Ape was airdropped a serum, they could go to the BAYC website with both their Ape and serum in their crypto wallet, and mutate their Ape! Their serum NFT would be burned forever, and in exchange they received another Ape on top of the one they already had, only this one was a Mutant.
(Image taken from nfts.wtf)
Mutant Apes look almost entirely different from the Bored Apes — every single trait was redesigned to fit the mutant theme. Pretty wild stuff. Today, an M1 Serum is worth 27 ETH / $76,000, an M2 is worth 60 ETH / $168,000, and the cheapest Mega Serum is listed for 6,942 ETH / $19.4m! The last Mega Sale was for 1,592 ETH, or over $6,000,000 (value of ETH at the time.) Remember, all of these Serums were airdropped to Bored Ape owners for free. (If you’re keeping track, this is a minimum of 37 ETH in tangible value returned to Bored Ape holders, or nearly $105,000). But there’s more to the MAYC Club story. Immediately after each Bored Ape was airdropped a serum, a public Dutch auction started for another 10,000 Mutant Apes. The MAYC collection stands at a potential 20,000 NFTs, should all the remaining serums be used. (There is no obligation to use your serum.) This public sale was the first time since the launch of BAYC that those who did not hold an Ape could join the community — the Dutch auction was open to anybody. The auction was a wild success, with people estimating that the BAYC took in over $80 million from the sell-out. It was this insane amount of liquidity taken out of the NFT market by the public sale of Mutants that many attribute to the NFT crash that followed it, as mentioned above. So, why did the BAYC release a collection that offers membership benefits and a supply so large? Didn’t that dilute the supply of original Bored Apes? Originally, I agreed with that line of thinking. I believed that the Mutant Apes were a cash grab. People were promised a never-changing supply of 10,000 Bored Apes. Over time, though, I came to understand that I was wrong for a few reasons.
Mutant Apes do not offer the same membership access as Bored Apes. Although this remains to be seen, the BAYC has been promised that Mutant Apes will not have the same benefits as the Bored Apes. Therefore, the supply of Mutants does not inherently dilute the supply of Bored Apes.
The greater point is that Mutants will actually do more good than harm for Bored Apes in the long run.
You might be asking “how?” Let’s go back to our thesis on the metaverse. If in theory hundreds of millions — and one day billions — of people are expected to join the metaverse, a supply of 30,000 total BAYC digital avatars (10,000 Bored Apes plus 20,000 Mutant Apes) will still be extremely scarce. But 10,000 is still scarcer. The problem is that the onboarding of the rest of the world to the metaverse is still years away. In order to maintain value, Bored Apes must retain their status as desirable NFTs. Keeping the supply to 10,000 limits the number of people who can get in on the fun. With a limited supply and astronomical prices, Bored Apes, in my opinion, might no longer be perceived as a cool, countercultural symbol. It is simply human nature to become harsher critics as Bored Apes holders look down on us, in this alternative timeline. The solution to this problem? Expand the collection and continue building the community out. This is exactly what the developers of the BAYC achieved with the release of Mutant Apes, and it was bloody genius.
3. November 2021 - ApeFest
You might be reading this and asking yourself, “All of these new NFTs are cool, but I’m still not seeing what you can actually use them for.” You wouldn’t be entirely wrong. But in comes ApeFest… As NFT collectors from all over the world descended upon New York City in early November 2021 for NFTCON, the Bored Apes figured it would be the perfect time to throw their inaugural ApeFest for their holders in the same city. The result? Madness! ApeFest is exactly how it reads. A BAYC festival, open only to holders of Bored Apes or Mutant Apes. Events the BAYC threw for their collectors blew all the other experiences and events at NFTCON out of the water. For Halloween, they arranged an immersive-gallery viewing of Apes, with a costume contest and after-party and more cool activities to add to the fun. Alternatively, Apes could have spent their Halloween on a yacht with 1,000 other BAYC holders for a separate wild party, cruising down the Hudson River. The partying only continued, with the most exciting night being the Warehouse Party, where top acts in the world such as Lil Baby and The Strokes performed music, and comedians Chris Rock and Aziz Ansari performed stand-up.
(Images taken from @tropofarmer on Twitter)
Finally, ApeFest concluded with a VIP dinner at Carbone, where proceeds from the limited number of tickets were auctioned off and donated to charity. These were just the main events from ApeFest — there is a lot here that isn’t named, including things such as new merchandise made available and the experience of being able to meet up with all of the community members you’d gotten to know so well online. This was the first major utility given to members of the Bored Ape Yacht Club, and it was by all accounts a raging success. Further, it served as strong confirmation that the BAYC had the capacity to build world-class experiences, strengthening the fervor of their holder base.
4. September 2021-Present — MoonPay and the Guy Oseary Celebrity Juggernaut
You may have noticed that, more so than any other NFT collection by far, Bored Apes have had a number of major A-list celebrities join their ranks as holders. This can be attributed to 2 entities almost entirely: MoonPay and Guy Oseary. What is MoonPay? Who is Guy Oseary? How do they intersect? MoonPay is a company that allows people to buy cryptocurrency with conventional payment methods such as Apple Pay, Google Pay or debit and credit cards. Guy Oseary is a talent manager, whose clients include Madonna and U2. He joined the BAYC team as their primary community manager. What do the two have to do with each other? As a marketing play, MoonPay has transferred multiple Bored Apes and Mutant Apes to some of the biggest stars in the world in exchange for their endorsements about the company’s services. Guy Oseary is the one with the network, connecting MoonPay with these megastars and helping convince them to take the BAYC plunge. I think it’s one of the greatest marketing plays I’ve seen in a very long time. Celebrities that have joined the Yacht Club through MoonPay and Oseary are Snoop Dogg, Kevin Hart, Paris Hilton, Post Malone, Jimmy Fallon, Gwyneth Paltrow, DJ Khaled, Lil Baby, Meek Mill, Eva Longoria, Martin Garrix, Diplo, and many more. As a result of these big names getting involved, we’ve seen a number of other celebrities act on their own accord and join the BAYC without MoonPay or Oseary. These include, but are not limited to, Neymar Jr., Justin Bieber, Eminem, Steph Curry, Shaquille O’Neal, Steve Aoki, and various others.
(Images taken from Hypebeast, Black Enterprise, and Luxury Launches)
Each time a superstar joins the ranks of the BAYC, its chances of long-term success increase. Although the onboarding of celebrities is not necessarily a use case for holders of BAYC products, the effort by the developers to do so has returned a lot of value to the collection, and is a big reason why prices are where they are today.
What does the BAYC have planned? — Road map 2.0
Most of what I just described to you was planned and announced in BAYC’s first road map, released during the project launch in April 2021. Of course, the scale was far greater than the developers could have ever imagined, but nonetheless, much of what we experienced in 2021 was realised — particularly with the success achieved in the Bored Ape Kennel Club and Mutant Ape Yacht Club releases. ApeFest was actually the very first part of another year-long plan of major development of the project. Here’s an image of BAYC’s second (and current) road map that we’ll go through together:
(Image taken from Bored Ape Yacht Club’s Twitter account)
First up was ApeFest, which we already briefly went through. The second event on the road map was a 6-day mobile game event available to play only by Apes and Mutants (the players with the highest scores won a BAYC pinball machine and a Mutant customized Honda Accord, respectively). Although a lot of the road map’s meaning is still unclear due to a lack of details, the parts that are clear to us have made the holders of Apes quite bullish on the future of the project. The next upcoming development in the project is the release of $APE, the token said to play a major role in the ecosystem at large. Details on what purpose $APE will serve and its tokenomics are kept under heavy wraps, but many theorise it will be a way for Apes to generate passive income on their holdings. It is popularly believed that $APE will be the benchmark low-barrier-to-entry opportunity for all investors bullish on the BAYC as a whole, but priced out of owning any of their NFTs. Continuing with the road map, we see “The Trial of Jimmy the Monkey” and “MD vs MMI,” which nobody in the club knows anything about. It is unlikely that either have to do much with a physical product (perhaps the mechanical dog fist alludes to a Kennel Club spinoff) but rather that these will be segments of the road map that build the BAYC club legend we briefly mentioned at the start of the piece. Following that, Bored Apes will enjoy a handful of smaller developments, including the release of 3D models of their Apes, a treasure hunt (they gave away a Bored Ape as a prize in each of the last two they’ve held), and a fully built-out digital experience on their plot of land in The Sandbox. The final stages of the road map are where things become extremely intriguing for BAYC holders. What’s currently planned includes the opening of a real Bored Ape Yacht Club clubhouse (available exclusively to holders, presumably), a play-to-earn blockchain game, and the transition of the entire project into a decentralised autonomous organization (DAO). I hope the picture of why Apes are valued so highly by the market is becoming clearer. A physical clubhouse enhances the community by providing a go-to networking space and international headquarters. A play-to-earn game adds another layer to the lucrative proposition of owning a BAYC NFT, currently consisting of rich airdrops and the prospects of $APE token. Finally, transitioning the entire project into a DAO converts the collection into a true Web3 entity, and feeds into the ownership economy by allowing the community to take the project where they want it to go. With all of these new benefits coming up the pipeline, one could even argue that the BAYC ecosystem is still undervalued. Let’s strip away 90% of what I just communicated to you about the project. Forget the airdrops, festivals, treasure hunts, video games, tokens, and DAOs. Instead, let’s go back to the first concept we discussed today — using your Ape as your digital avatar in the metaverse. How much would somebody pay for that? To own the most coveted digital skin on the planet? To be able to go anywhere in the metaverse and receive appreciation of your digital avatar? A school of thought grows each day that believes Apes have become what are known as Veblen goods: a type of luxury good for which the demand for it increases as its price increases. I don’t think this idea is far-fetched at all — simply look at how much the uber-wealthy spend on sports cars, homes, watches, jewelry, and fine art. Who’s to say that they won’t continue these collecting habits with the most popular digital good on the face of the planet, the Bored Apes. Just this thesis alone should make one bullish on the long-term potential of Bored Apes. If we take a second to add back in all of the things we’ve talked about, including all the things we already know are on the way for the BAYC, heck, who knows where this thing can go.