Planet of the Ape’s Yacht Club
It’s easy to forget that BAYC isn’t even a year old at the time of this writing, and yet BAYC, or more appropriately Yuga Labs, has succeeded in dominating the blue-chip NFT scene with its recent acquisition of the CryptoPunks and Meebits intellectual property from Larva Labs. They also have a lengthy list of celebrity shillers and recently are teasing something big that involves know-your-client (KYC) integration. How did this all happen? What does this mean for other NFT projects, specifically PFP avatars? Most importantly, how the fuck did I miss out on BAYC when they’re not even a year old? For answers, we’ll have to go back to 2017, when this all began.
OG PFP NFT
CryptoPunks began over 4.5 years ago with a $7.56 gas transaction and not a whole lot of fanfare. John Watkinson and Matt Hall formed Larva Labs and, using a pixel generator, they randomly assigned attributes to base heads giving birth to both the first PFP NFT project and the idea of virtual rarity. Initially, only a few dozen were minted. Then on June 16, 2017, Mashable released an article explaining the value of algorithmically created art and the inspiration behind CryptoPunks.
The last line is particularly haunting: “Someday, owning a CryptoPunk might signify just how early of an adopter you were into the world of Ethereum and its thriving digital art scene. Or, they could just be a bunch of images.” I think we live in a world currently where both are true. Following the publication of the Mashable article, CryptoPunks sales began to soar. The entire collection was minted in a couple of hours, and the rise of the avatar commenced.
By the time BAYC hit the scene on April 23, 2021, the NFT PFP craze was just getting started. CryptoKitties were very popular, as were the aforementioned CryptoPunks, but most other PFP projects that we’re familiar with today were still only in development. The cost to mint a Bored Ape was 0.08 ETH, or about $220 at the time. Similar to CryptoPunks, they launched with little fanfare, initially having a very slow week where they only minted about 500 out of the original 10,000.
They say success doesn’t happen overnight, but they would be wrong. On the morning of May 1, 2021, the collection completely sold out, temporarily earning BAYC the title of the most-used smart contract on the Ethereum network. It was only a little more than a month after that when the average price of a BAYC became more than 1 ETH, and the floor has steadily risen since.
It Must be the Mutant Serum
Whatever magic BAYC had on that fateful morning, every project since has tried to replicate to little or no success. BAYC notably took a different route than CryptoPunks in allowing their holders commercial rights to the images they hold, whereas CryptoPunks did not. BAYC further was a pioneer in holder benefits, adding companion dogs (Bored Ape Kennel Club) less than two months after the initial mint. The more popular Mutant Ape Yacht Club was then launched two months after that, adding more value to the project and the holders. They continued with private events, including APE FEST, and on December 22, 2021, a mere eight months after initial mint, almost to the day, BAYC flipped CryptoPunks as the most valuable NFT to own. It’s worth noting that when BAYC launched eight months prior for 0.08 ETH each, the average price of a CryptoPunk was a little over 31 ETH.
The rise of celebrity adoption has certainly helped BAYC’s cause. Paris Hilton and Jimmy Fallon talked about their BAYC purchases on the Tonight Show, while athletes like Stephen Curry, LaMelo Ball, and Von Miller also aped in. Justin Bieber paid $1.3 million for BAYC #3001, and popular NFT influencer @GaryVee was one of the earliest adopters. MoonPay has positioned itself as a concierge service to introduce normie celebrities into the crypto/NFT space, and it’s difficult to say how much influence they had in Jimmy Fallon’s and Post Malone’s purchase, or Gwyneth Paltrow’s, or Diplo’s or DJ Khaled’s or Future’s, but it is clear that they are helping celebrities buy NFTs and those celebrities are buying BAYC.
Yuga’s the Captain Now
On March 7, 2022, the reverse-flippening happened, if only for a moment. @MikeMcDonald89 tweeted the occasion, but it flipped back into BAYC favor shortly after. Still, it raised some eyebrows and put BAYC members on notice that the OGs were here to stay. Well, kind of. Four days later, Yuga Labs, the creators of BAYC, bought the IP for both CryptoPunks and Meebits, as well as 423 actual CryptoPunks and 1711 Meebits. In one swift move, Yuga Labs became the dominant force in blue-chip NFTs. To the joy of many, they immediately granted commercial rights to all holders, so for the first time ever, CryptoPunk holders could use their punk for any commercial purpose they desired.
However, alarms are sounding. Many people have fears about the end of the NFT PFP, as the overconcentration of top-10 NFTs now squarely sits in Yuga’s hand and in OpenSea’s marketplace, which doesn’t say much for an industry that’s supposed to be decentralized. It quickly can lead to more consolidation in the space, especially as big Web2 players want to get their foundation set in Web3. Seeing as Andreessen Horowitz could be valuing Yuga Labs at $5 billion, mega conglomerates and venture capitalists are learning that there is some real money to be made here. Within a short period of time, we very much could see the NFT sphere turn into a version of Coke and Pepsi, with hundreds of different flavors underneath each portfolio.
Others have concerns over a cryptic tweet by BAYC about how Animoca, the thinktank behind Sandbox, are requiring KYCs for an upcoming feature that’s yet to be disclosed. Now that CryptoPunk owners are a part of Yuga Labs, many are wondering if they will need to subject themselves as well. Yat Siu, Chairman of Animoca, gave a detailed Twitter thread as to why KYC is necessary, but the replies seem less than satisfied. As the industry evolves, there will be the side that pushes for regulation and transparency, and there will be the side that pushes for decentralization and anonymity. If history is any teller of the future, then BAYC will give us all the blueprint for that fight as well.
