Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.
The Bored Ape Yacht Club is the latest super-successful set of crypto collectibles. So popular and scarce are the apes that a single primate can sell for millions.
Holders gain access to a members-only club that grants them exclusive rights to buying “clothes,” an invite-only virtual “graffiti” board on which they can scrawl whatever they please, and exclusive copyrights to the image.
Plenty of holders have replaced their profile pictures on social media accounts with Bored Ape Yacht Club NFTs. The images, alongside a handful of others in this burgeoning industry, are markers of digital status.Buy and Sell Bitcoin, Ethereum, and dozens more cryptocurrencies with Wealthsimple. Sign up and Trade here.
Although anyone can technically upload anything they want as their profile picture, being able to prove that you’ve spent hundreds of thousands of dollars is, in some people’s eyes, no different from flashing a Rolex or rolling up to a club in a Maserati.
But it’s not just money or status. Some people conceive of avatar communities like The Bored Ape Yacht Club and ApeCoin as an easy way to network and an entry into exclusive communities. “When I had an ape as my profile picture, I could DM any other ape and connect with them,” Spencer Gordon-Sand, an NFT investor and venture capitalist, told The Verge. “This is a really easy in to a community of people.”
According to CryptoSlam, The Bored Ape Yacht Club is the fifth-most popular NFT project, having generated $386 million in sales. Add its offshoot projects to that, Mutant Ape Yacht Club’s $178 million and Bored Ape Kennel Club’s $74 million, and the brand has generated $638 million in sales from its NFTs. More than two-thirds of Bored Ape Yacht Club’s sales took place in August 2020 alone.
How did The Bored Ape Yacht Club come about?
The Bored Ape Yacht Club is a collection of NFTs, or non-fungible tokens. These are cryptocurrency tokens that run on the Ethereum blockchain—the second-most popular blockchain after Bitcoin.
Non-fungible tokens are a kind of cryptocurrency. They are provably unique and therefore useful as a means of proving scarcity of a digital asset, like a picture, image, or legal document.
Ethereum first hosted NFT technology back in 2017 (some people claim as early as 2016), but some projects are now hosted on other, cheaper, newer blockchains, such as Flow and Solana. This is because Ethereum is slow and charges sky-high transaction fees. On a particularly busy day at the end of August 2021, swapping a token on Etheruem-based decentralized exchange Uniswap cost an average of $54.21.
In 2021, NFTs blew up. The craze started with digital art: Single pieces of high-quality artworks started selling for millions of dollars, culminating in the sale of a collection of NFT art from digital artist Beeple for $69 million in March 2021. Then people started to realise that they could mint anything at all, and, so hot was the market, they could probably find a buyer.
Rarity and scarcity was—and still is—crucial to selling an NFT for a lot of money, and buyers and NFT artists quickly learned that selling collections of NFTs was the best way to make fat stacks of digital cash. Lower serial numbers sell for more, as do funny or lucky numbers (the Chinese like the number 8), as well as any items with rare characteristics.
One such project that did incredibly well in 2021 was CryptoPunks. Created in 2017 by two Brooklyn-based artists, CryptoPunks was a collection of 10,000 computer-generated avatars. Some have rare traits, like smoking cigarettes or being aliens, which makes them more valuable than others.
And limiting the collection to a cool 10,000 made all of them pretty valuable, and soon enough, in August 2021, they started to sell for at least $400,000 each, and some sold at prestigious auction houses, like Sotheby’s and Christie’s, for well over a million dollars.
The market clamored for more crypto collectible projects, and in April 2021, The Bored Ape Yacht Club heeded the call. The team, Yuga Labs, hired some artists to create an avatar project around apes, then released them to the community for $186 in ETH, the native token of Ethereum. Yuga Labs filed the trademark for Bored Ape Yacht Club on May 31, 2021. As of August, it still hasn’t been registered.
One of the project’s pseudonymous co-founders, Gargamel, told The Verge, “We were thinking, we have this club, this dive bar, what kind of people do we imagine would go into this bar? Who do we want? What kind of club would we ourselves want to be a part of?”
“After a long night of brainstorming, it came to [Gordon, another co-founder] in a dream: Bored Ape Yacht Club.” The name likely refers to a culture of cryptocurrency investors who are ready to “ape” into projects—invest lots of money without doing much research. “Bored” could refer to the casual manner with which they invest, and the indifference to the wealth they have so easily amassed. The yacht is a marker of exclusivity and status—what someone might hope to acquire by buying an ape.
The apes themselves are a collection of 10,000 avatars, the same size as CryptoPunks. Each one comes with rare characteristics, like smoking a cigarette, wearing tweed suits, or boasting colored fur. Roughly speaking, rare traits increase the value of an ape.
The NFTs are based on the ERC-721 token standard, and the images of the apes are hosted on a decentralized file storage system called IPFS.
What can you do with a Bored Ape Yacht Club NFT?
The apes can be resold on secondary markets. The most prominent one is OpenSea, which by the time apes had become popular was dominating the market for secondary NFT sales. To buy on OpenSea, you have you create an account and deposit cryptocurrency to buy your NFTs. Most are denominated in ETH.
As mentioned, buying an ape grants you certain rights. According to the website, owning an Bored Ape NFT “doubles as your membership to a swamp club for apes.”
The first advantage to being part of the club is that collaborative graffiti board, called THE BATHROOM. Holders can draw a pixel on the wall every fifteen minutes. “Think of it as a collaborative art experiment for the cryptosphere. A members-only canvas for the discerning minds of crypto twitter.”
Then, members can access an “Exclusive BAYC Merch Store,” from which “Limited Edition tees, hoodies, and other goodies can be bought.” There’s also a YouTube channel for LoFi hip hop radio.
Yuga Lab also launched a Bored Ape Yacht Club NFT20 pool, in which ape holders can opt to lock up their NFTs and receive $BAYC20, an Ethereum-based derivative of their NFT, as a reward. They can use those tokens to provide liquidity to the BAYC/ETH pool on decentralized exchange Uniswap (i.e., to push money through the exchange so that people can trade BAYC20 tokens for Ethereum tokens). Holders of enough BAYC20 tokens can also redeem other Bored Apes from the liquidity pool.
Still on the agenda is to start a treasure hunt by making a “Mysterious note legible.” The first person to solve the mystery gets 5 ETH and a Bored Ape NFT.
Perhaps the largest change to the collection was the introduction of two new types of Bored Ape NFTs: the Bored Ape Kennel Club NFTs, a collection of canine companion NFTs gifted to each Bored Ape Yacht Club NFT holder for free, and the Mutant Ape Yacht Club, another 20,000 apes.
During the Mutant Ape Yacht Club drop, 10,000 vials of “serum” were given to Bored Ape Yacht Club holders for free. Holders of the serum could “breed” a mutant version of their ape, effectively allowing them to mint a new NFT for free. A further 10,000 were sold on the open market for a little under $10,000 each. The sale generated about $86 million in a single hour.
What’s next for the Bored Ape Yacht Club? Will it maintain its momentum, or fizzle out like so many other forgotten cryptocurrency projects and, in hindsight, turn out to be a passing fad?
That’s difficult to judge, and the success of the project largely depends on whether Yuga Labs can sustain the interest of its growing fanbase and make the apes an exclusive item for years to come. However, its success so far has revealed a trend that is likely to persist: People yearn for things that reflect their status and wealth online, and love spending money on digital assets that will allow them to do that. Even if Bored Ape Yacht Club fades away, the desire will surely mutate into something new.
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