In-depth Analysis of Bored Ape: Creating a New Paradigm for Brand Operations

Original Title: "After Spending Over a Million on an Avatar, I Finally Started to Understand It"

Original Source: Empower Labs

Original Author: cwweb3

The night before Halloween, Manhattan, New York. The staff at Bright Moments Art Gallery were nervously preparing for the next day's event when they suddenly heard a cacophony of monkey howls.

It was 15 "apes" who had just landed, and although the Halloween event was scheduled for the next day, they couldn't wait to express their inner excitement.

By 7 AM the next morning, they were back, and this time there were not just 15 but a full line of 700 people stretching three blocks. They were all members of the Bored Ape Yacht Club, coming to collect tickets for a real yacht party. This was the grand opening of a week-long ape festival and a highlight of the NFT.NYC conference. A total of five thousand people flocked to New York during the pandemic to attend this NFT-themed extravaganza.

Over the past year, NFTs have been hot, whether in terms of concepts, project innovations, or market dynamics. But I never understood why someone would spend so much money on an avatar, especially when they often look quite ugly. I often say I don't understand art, which is true and is also the reason for my bias against these avatars, as well as a way to cover up my own ignorance about art-related NFTs.

A few weeks ago, I came across an article from Coinbase. The article recommended the Bored Ape Yacht Club as a leading DAO in the social category. I was intrigued by why a group of people who bought monkey avatars could be classified as a top DAO. Another trigger was Adidas purchasing a monkey and making a significant metaverse plan based on the acquired monkey IP.

These reflections made me realize: bias is a burden; it confuses the past, threatens the future, and prevents one from grasping the present. Perhaps I should abandon my biases and take a more serious look at the communities and underlying logic of these leading NFT projects. Even if there is a bubble, at least I should understand how the bubble came about.

NFTs are a vast technological concept that can extend into countless scenarios; this article discusses only a small part of the NFT landscape. NFTs are certainly not just avatars or on-chain artworks.

I spent two days seriously researching and learned quite a bit of background information, but I always felt there was a layer of separation that made it feel a bit off. After thinking it over, I realized that this layer was probably because I didn't truly own this monkey, so I was always observing from the outside. Observing from the outside and participating from the inside, sharing joys and sorrows, and growing together can lead to completely different perspectives. To be part of it, I decided to buy one. Monkeys are expensive, which has a bit of a risky element, but it’s not that risky because through some understanding, I had a certain recognition of the monkey's value. I comforted myself that even if I lost money, it wouldn't be too much. In the end, I spent almost 1.4 million, which was nearly the lowest price for a monkey NFT available on the market. Undoubtedly, monkeys at this price point are quite ugly and lack uniqueness; otherwise, they would certainly cost more. The expensive ones aren't that much better looking either, I reassured myself once again.

I have quite a few friends with monkeys in their circles, and there are still five or six who use monkeys as their avatars. However, based on my aesthetic preferences, I always thought this set of monkeys didn't look great, but since everyone spent a lot of money on them, I felt embarrassed to bring it up. When someone asked, I would just say I didn't understand, and I truly didn't. However, ever since I spent money myself, I surprisingly found some of the originally unattractive monkey avatars somewhat pleasing to the eye. This is probably the difference between being inside and outside the situation.

Many people view NFTs as investments, but I see this more as consumption. This monkey has become my learning material, a ticket to participate in the club, a basis for my identity within the monkey community, and also ownership of a commercial IP that I can use without restrictions. I can use its image to open a café, create a set of figurines to sell, or license it to other brands for commercial use. This is a very expensive consumption.

Bored Ape Yacht Club

Bored Ape Yacht Club, abbreviated as BAYC, launched at the end of April 2021. It is a collection of 10,000 NFTs featuring apes with different traits and attributes. These monkeys have various clothing styles and expressions, but all share a bored look. The initial pricing was around $200 each.

The Bored Ape Club was founded by four ordinary people who established a company called Yuga Labs as the operational entity behind the bored apes. These four individuals reportedly graduated from the same university. Two of them had some artistic background, while the other two had some technical knowledge. How ordinary were they? One of them, after making some money from the monkeys, immediately reacted by buying a new car, which was just a regular Volvo. When he told his mother that he had finally made some money, her reaction was to cry.

Perhaps it was the bored expressions that resonated with people, or perhaps the art style appealed to a certain group, or maybe a specific group had bought in early and was leading the trend. In any case, this set of ape avatars became unexpectedly popular.

Open - A New Paradigm for Brands

The rise of the monkeys was somewhat unexpected, but there was also an element of inevitability. The bored apes almost single-handedly pioneered a new era of open branding.

How to understand open branding? Simply put, when a person purchases a bored ape NFT, they are not just buying a piece of art; they are also gaining a ticket to a vibrant club and obtaining full commercial rights to the IP of their specific monkey.

Ownership statement and rights terms for the bored apes

The core statement translates as follows:

"Yuga Labs LLC grants you an unlimited global license to use, reproduce, and display the purchased artwork, as well as to create derivative works based on the artwork ('Commercial Use')."

This means that once a person purchases the artwork, they can use the image from this NFT in any commercial context and can also authorize others for secondary creations, etc. Although each monkey image is unique, everyone shares a large underlying IP within the community. Consumers are no longer just consumers; they become participants and owners.

For most cultural brands, such as Supreme, Marvel, and pop music, allowing intellectual property to circulate freely is not permitted. In contrast, the bored apes view their openness as an asset. "Anything people create with the apes will only grow the brand," said founder Goner.

As a result, a large number of derivative works quickly emerged. Ape jackets, ape skateboards, ape magazines, ape TV, and virtual bands featuring ape images. For a significant proportion of entrepreneurs using ape IP, the ape team also provides funding to encourage their creativity and expand brand influence. Because everyone using the ape image for their commercial products is participating in building this brand. Other community members are also empowering this community and brand in various ways. It's like a community version of SuperMe, where they combine the ape image with everything and create their own culture.

Various derivative products

I couldn't verify whether the bored apes were the first NFT project to fully grant brand IP to holders, but one thing is certain: before the bored apes emerged, no one had played this game through, and they not only played it through but did so on a large scale. Behind their success is a love for the culture this brand carries, recognition of the community, and a high degree of consensus and value alignment.

The model of open branding is easily replicable; after the success of the bored apes, everyone learned from it, but almost no one could replicate its success. The reason is simple: open branding only has value when a strong community and cultural consensus can be formed.

From this perspective, Yuga Labs' product may not be this set of NFTs at all, but rather a powerful community with shared culture, values, and a strong sense of self-identity, with the ape NFTs merely serving as the catalyst that brings everyone together.

Culture and Community

What exactly is the culture of the Bored Ape Club? I've been asking myself this since day one, but even now I can't provide a good answer.

There are many reasons people like the bored apes; some think they are cool, while others see this boredom as a form of rebellion. Some feel that the founding team is just ordinary people like you and me, seeing their own reflection, while others believe this openness represents a new world. Still, others think the bored apes embody the metaverse. From the very beginning, the bored apes attracted many young, rebellious individuals, especially from street culture, sports, and music circles. People in these circles often possess good creativity and the ability to communicate outwardly, which has indeed led to significant dissemination; in other words, everyone is quite adept at making things happen.

The founding team is the same; Yuga Labs has demonstrated an open attitude in its ongoing operations, continuously empowering the brand and gradually creating many innovative plays.

Initially, club members could only interact in a co-creation space called "the restroom," which could only be accessed by those who owned an ape after verification. They could admire artworks or participate in creation, adding one pixel every 15 minutes. The reason it was named the restroom is that the idea for the bored apes came to them while they were in the bathroom.

This is a picture I had to spend over a million to see

As the community developed, more and more activities were created. Airdropped dogs, mutated monkeys, monkey duels, and a more ambitious 2022 roadmap. While writing this article, I kept dozens of browser windows open on my computer with various materials about the bored apes. In the end, I gave up on integrating all the information into the article; there was too much, too long, and I couldn't keep writing, and I figured no one would want to read it all.

However, more valuable than these roadmaps is the formation of a friendly community. The central members of the community have a strong sense of shared identity (of course, there are also a significant proportion of investors and speculators), and everyone works together, supporting and helping each other.

Although Coinbase listed the bored apes as a DAO, this community has not yet formed a narrow DAO; there are no smart contracts, governance mechanisms, or voting. The community acknowledges this and has stated in its roadmap that it aims to become a DAO in 2022. But from a broader perspective, the bored apes are already a DAO; people have begun collaborating without a central management entity, and the founding team, Yuga Labs, is merely one member of this community. Countless apes are working towards a common goal.

When the apes are all working in the same community, reputation becomes incredibly important. People can leverage it to create immense value for themselves. Building this reputation takes a long time. However, if community members trust each other, this trust can be genuinely utilized, and people expect you to use this trust. This trust holds immense value for individuals. The emphasis on this reputation is also of great value to the community. In this context, every community member is striving to help the bored apes become stronger, while the bored apes are helping every community member.

Twitter and Celebrity Effect

I've seen many communities, but none have achieved the level of dissemination that the bored apes have. How this all happened, I have no conclusion. But one thing that can be easily observed is that the apes are sweeping through Twitter, using it as the main battlefield for spreading their brand and culture. On Twitter, hashtags like #apefollowape and #apetogetherstrong are emerging one after another and gaining high popularity. Since the supporters of the apes are scattered across various industries and not limited to the crypto sector, their dissemination can reach a wide audience. People become curious about why they keep seeing this ugly monkey lately.

In the past few days, many monkeys have spontaneously spread the message of "proudly joining the monkey club" on Twitter.

The queue is orderly

I even saw a young man who spends almost all his time helping various friends with apes create Twitter banners for free to expand this dissemination.

The celebrity effect has undoubtedly added fuel to this dissemination. As influence and culture expanded, NBA superstar Steph Curry joined in. NBC's top host also got involved, and legendary music star Eminem came on board as well. At least 20 other first-line celebrities have also joined. Moreover, many mid-tier KOLs with tens of thousands to hundreds of thousands of Twitter followers are also participating.

They all coincidentally use the monkey as their avatar.

Just the three people mentioned above have a combined Twitter following of nearly 100 million. If we can't imagine the impact this dissemination could have, we might as well make a comparison. If one day you see Yao Ming, Wang Han, and Li Zongsheng all change their avatars to a cartoon on Weibo, what would you think?

Organizations are also not idle; the rebellious Rolling Stone Records has joined in. Universal Music Group invested in a virtual band composed of bored apes.

The latest addition to this list is Adidas.

Adidas and the Bored Ape Metaverse

In November, Adidas purchased a bored ape numbered 8774, automatically obtaining the corresponding IP rights. Adidas named this monkey Indigo Hertz and created an image of it wearing sportswear. They used this ape in Adidas Originals series as their avatar on Twitter.

But this is clearly just the beginning.

In December, Adidas announced the launch of its own NFT series called "Into the Metaverse." During the creation of this series, Adidas collaborated with three NFT communities and integrated their brands, with the most profound integration being with the bored apes. Adidas's NFT series was limited to 30,000 pieces, of which 20,000 were allocated to the three communities, including the bored apes, for whitelist access (meaning they could purchase before the public sale and ensure their eligibility), while the remaining portion was available for public sale.

All NFTs sold out within seconds.

Adidas Originals team

What can this NFT do? Firstly, it can be exchanged for limited edition physical items in 2022, corresponding to three types of clothing (it can be expected that many people will show off the clothing they receive).

Adidas is also making significant plans for a metaverse application, and this NFT serves as a ticket to participate in Adidas's metaverse, allowing not only visits but also participation in co-construction.

Undoubtedly, Adidas understands the essence of the metaverse, which is users and communities. They express their understanding and attitude of standing with the community in this way.

The metaverse creates countless possibilities for user connections, the creation of works, and a sense of belonging. Especially regarding the sense of belonging that we initially focused on. Collaborating with communities like the bored apes has been a huge learning journey for Adidas. These communities are firmly betting on the future, and I believe we can learn something from them. As a brand, when our members want to join such spaces, can we be a trusted friend by their side? How can we help, educate, guide, and tell them the way forward? - Tareq Nazlawy, Senior Director of Digital Business at Adidas

Adidas aims to build the Adidas metaverse, but this is also part of the bored ape metaverse. As the saying goes, anything people create with the apes will only grow the brand.

But the ape metaverse goes far beyond that.

The bored ape NFT game, in collaboration with early metaverse player Animoca Brands, will launch in 2022. (The parent company of the well-known metaverse project Sandbox, which has invested heavily in various metaverse and NFT projects and owns a large amount of intellectual property.) The 3D bored ape images for the metaverse are already in the works.

And even more innovations and plans are continuously emerging.

Final Thoughts

The bored apes have pioneered a new paradigm for brand operations and are likely to be a brand model widely adopted by numerous commercial institutions globally for many years to come. They have formed a strong community, an excellent culture, and an IP with immense commercial value. This IP has already risen to the level of a cultural phenomenon in the United States and many other regions. The success of the bored apes has a certain inevitability, but it also has a significant element of chance. The various poor imitations that have emerged later are mostly scams and speculators. However, the success of the bored apes is by no means unique; it is to some extent replicable, but the difficulty is extremely high.

My understanding of the bored apes is still shallow, as I have only been involved for two weeks. The learning is far from over, and I am still just a wanderer on the edge of the community, far from truly understanding this community and its culture.

The price of the apes may already have a significant bubble, and their explosive popularity undoubtedly has a part driven by speculators. But I also vaguely see the infinite possibilities of the bored apes in the future. Is their value overestimated or underestimated? What kind of commercial value will this IP bring me in the future? How will this brand evolve in the metaverse era? Will everyone come together to create something even more amazing? I cannot judge.

I focus more on the community itself. Setting aside a significant proportion of speculators and investors, I see a lot of super friendly, super positive people with diverse backgrounds and rich knowledge at the center of the bored ape community. I can learn a lot from them, which makes me hope to participate more deeply in the community, learn, grow, help others when I can, or accept help from others when I encounter difficulties. This may also become a very important part of my social capital in the future.