How does a computerized caricature of an ape become worth almost $500,000? This is what it is and why it sells for what it does.
Most people are still perplexed by Web 3.0 and NFTs despite the plethora of explanations that have inundated the internet since their launch.
The fact that the market is full of absurd purchases, like Eminem’s $460,000 purchase of a cartoon ape, doesn’t help. One of 10,000 gorillas in the NFT collection known as the Bored Ape Yacht Club.
You undoubtedly have a lot of inquiries. The Bored Ape Yacht Club—what is it? Why are cartoons so pricey? A new financial bubble posing as innovation, perhaps? Well, we do have responses. Let’s get going.
The Bored Ape Yacht Club: What Is It?
The Ethereum blockchain is the foundation for the 10,000 distinct NFTs that make up Bored Apes. The Bored Apes are grungy simian avatars with a variety of traits, some of which are more uncommon than others. For instance, only 5% of Bored Apes have red fur, and only 3% are wearing motorcycle vests. A Bored Ape is likely to cost more money if its features are scarce.
The Bored Apes Yacht Club is an elite group that is led by the, you got it, Bored Apes. The first of these privileges is THE BATHROOM, a public drawing board where Bored Ape owners can create digital graffiti. Your Bored Ape also serves as your Yacht Club membership card and gives you access to members-only benefits. Access to a personal Discord server where you can hang out and converse with other owners is another benefit of owning a Bored Ape.
At the time of release, all of the Bored Apes were allotted on a first-come, first-served basis and cost the same—0.8 ETH. But because they all rapidly sold out, they are now available on OpenSea, a secondary market for NFTs that is similar to eBay. As of this writing, 108 ETH, or roughly $368,000, is the floor price for an ape on OpenSea.
Through their business Yuga Labs, the four founders founded the Bored Ape Yacht Club in 2021. Emperor Tomato Ketchup, Gargamel, Gordon Goner, and No Sass are some of the founders’ comical aliases. Or at least they did until BuzzFeed made Gordon Goner and Gargamel’s identities public in February 2022.
The author and book reviewer Greg Solano is revealed to be Gargamel, and Wylie Aronow, 35, is Gordon Goner. Both went on to tweet about their Bored Apes and reveal their real identities. Emperor Tomato Ketchup and No Sass then proceeded to follow suit.
In a Rolling Stone interview, the founders stated that contemporary NFT OGs like CryptoPunks, which have evolved into a type of cultural currency, served as an inspiration for BAYC. Similar to Bored Apes, CryptoPunks is a 10,000-strong collection of one-of-a-kind NFT avatars that is extremely expensive, with one selling for a staggering $11.7 million. Get up to speed on the latest CryptoPunk news and learn why they’re so pricey if you haven’t already.
The idea behind BAYC was to merge the collectible-art aspect of NFTs with community involvement, effectively extending the usefulness of NFT ownership beyond its status as a status symbol for crypto cool kids.
Why Do Bored Apes Cost So Much?
The biggest query of them all is: why does Bored Apes cost so much? Even memberships to the most elite clubs in the US don’t cost $368,000. What’s the big deal? We’ll see.
Utility
In addition to acting as a digital identity, bored ape art is valuable due to the related economic usage rights. Owners of Bored Ape are permitted to sell offshoot goods based on the artwork in addition to reselling the NFT for a profit.
A Bored Ape owner created a Twitter account for his or her ape and made up a whole tale about how Jenkins, the ape, was a valet at the Yacht Club. Jenkins has the right personality, knowledge of cryptocurrency, and outstanding storytelling skills to have a successful Twitter account.
Jenkins was the cheapest ape in the collection, which affected his persona as a valet, making his narrative all the more appealing. People are drawn to the traditional “rise of the underdog” story on a fundamental level.
Jenkins joined a real-world agency in September 2021 to look into publishing prospects for books, podcasts, movies, TV shows, and other media. Additionally, Neil Strauss, a New York Times bestselling novelist, will contribute to his own biography.
By enabling users to purchase NFTs that act as voting rights for the creative direction of Jenkins’ debut book release, Jenkins’ owners are fostering a kind of sub-BAYC community. In essence, it’s a sizable communal endeavor, except in this instance, people pay to take part.
The possibility of possibilities like this raises a Bored Ape’s worth.
Brands have also “aped in,” as evidenced by Arizona Iced Tea’s August 2021 purchase of a Bored Ape Yacht Club NFT and subsequent use of the image in promotional materials. Adidas additionally bought a BAYC NFT with the intention of creating a character and storyline.
Scarcity
Here are some fundamentals of economics: the supply of NFT art is somewhat constrained because there are only 10,000 Bored Apes. We have a high-demand/low-supply dynamic, which when combined with the enormous interest in the brand, inevitably raises costs.
Additionally, different Bored Ape avatars from the same collection have different rarities. A unique, 170-trait combination, including backdrop color, earrings, facial expression, headgear, attire, etc., is used to create each individual ape. Some Bored Apes are expensive because of this derived scarcity.
Exclusive material
Bored Ape owners receive special content benefits from BAYC, some of which are described in the comprehensive roadmap on the Bored Ape Yacht Club website. The founders plan to cross items off the roadmap, which serves as a type of to-do list, when they achieve their desired sales percentages.
The 10th goalpost of the BAYC, which is to discover “new ways to ape with our friends,” has inspired the organization to be even more inventive in its community-building strategies.
For instance, starting in June 2021, every Bored Ape owner would be able to “adopt” a dog companion NFT for free (they would only need to pay for “gas,” which is the cost associated with processing transactions on the Ethereum network). Thus, Bored Ape Kennel Club was established. The club raised $1 million for animal shelters through secondary sales of these canine friends.
Despite the fact that these canines were provided free of charge to BAYC holders, the current floor price for a Bored Ape Kennel Club dog is 7.60 ETH, or around $17,000 at the current ETH exchange rate.
BAYC bred 20,000 mutant apes in August 2021. They offered 10,000 to the general public for 3 ETH in order to recruit new members. It was successful; the complete set was sold out in less than an hour, bringing in $96 million.
However, 10,000 digital vials of mutant serum were airdropped for free to all Bored Ape owners, allowing them to create new mutant apes from their existing Bored Apes. Additionally, they may make money by selling the new NFT on the secondary market.
And in March 2022, the BAYC introduced the APE coin and airdropped $ape tokens to all holders of BAYC and MAYC. Owners of BAYC NFTs will be eligible to receive roughly 10,000 ApeCoin each, or about $100,000 for each holder, as compensation.
Snoop Dogg and Wiz Khalifa published an eight-track NFT mixtape for $APE holders, demonstrating how the APE currencies are already used within the BAYC community.
Finally, BAYC has begun hosting club members at actual, offline events; this will turn into an annual tradition. In November 2021, BAYC conducted its first-ever Ape Fest, which featured a gallery display, a costume contest, and a party aboard a genuine yacht with a 1000-person capacity off the shore of Manhattan. At the big finale “warehouse” party in Brooklyn, Lil Baby, the Strokes, Questlove, Beck, Chris Rock, and Aziz Ansari all made unexpected debuts.
Celebrity Support
Bored Apes is jointly owned by Jimmy Fallon, Post Malone, Mark Cuban, Paris Hilton, Snoop Dogg, Stephen Curry, Eminem, and Shaquille O’Neal. Additionally, it is common knowledge that engaging celebrities in anything can increase interest—and costs.
Bored Apes have developed into a status symbol because of the prominent celebrity engagement; like a digital Veblen good, the more expensive one is, the more people desire to own one.
Early Admission
Bored Apes are one of the few NFT compilations available, while not being the first. Not to discount the creativity, but novelty does play a role in the success of the movement. For instance, CryptoPunks are valuable solely due to the fact that they are the first NFT collection.
Early in March 2022, BAYC acquired Cryptopunks—a move that drastically reduced competition and cemented their status as the movement’s forerunners in the NFT-community. Similar to what they did with the owners of Bored Ape, BAYC intends to award CryptoPunks owners intellectual property and commercialization rights. This will unavoidably raise demand, which will cause prices to rise.
That’s some monkey business, huh?
Recently, BAYC secured $450 million in investment to create Otherside, its own gamified, decentralized Metaverse project. A “Ready-Player One-Esque” experience that combines virtual reality and reality is what the company is aiming for. If their Metaverse project is successful, the value of the BAYC’s services will skyrocket.
The future of the NFT industry in the cryptosphere is surrounded by a lot of uncertainty, but the BAYC’s actions are solidifying the brand as more than just a collectible. If anyone felt the BAYC was an anomaly, the company’s strategies for fostering community and rewarding involvement should persuade them otherwise. This is undoubtedly a brand to watch.
