The Business of Bored Apes: Fueling FOMO, Selling Air

Author: Rekt

Original Title: 《MONKEY BUSINESS》

Compiled by: Yangz, DeFi之道

In just one year, the Bored Ape Yacht Club (BAYC) has transformed from a niche NFT into a complete ecosystem and has become a mainstream means of flaunting wealth.

Looking at the timeline on Twitter, the Bored Apes have brought NFTs into the public eye, while providing enormous profits for all early collectors and traders.

The minting price for the series was 0.08 ETH (only $190 in April 2021), but now the cheapest ape costs at least ~$340,000.

However, the rise of BAYC has left many initial digital art enthusiasts feeling disgusted, as they believe the project has been taken over by awkward, scam-prone newcomers and celebrities, while the core team has abandoned the most important values of Crypto.

For many, the recent scandal surrounding the Otherdeeds minting was the last straw.

Since its launch, APE, BAYC, and OTHR have all seen significant declines.

With confidence shaken and loyalty waning, what does the future hold for the Bored Apes?

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The initial success of the Bored Apes can be partly attributed to timing; they emerged during the peak of Shitcoin‌ when DeFi tokens were about to crash, followed by the onset of NFT summer.

BAYC's aesthetics and additional products successfully resonated with holders, while its predecessors missed those resonances.

In fact, the project has completely overshadowed CryptoPunks. First, there was the "flip‌" at the end of last year, when the continuously rising BAYC floor price surpassed Punks' 60 ETH, followed by Yuga's acquisition of Larva Labs for an undisclosed amount in March.

However, success always attracts haters. Currently, there are numerous attempts to smear the project, and whether they are truly worth paying attention to is up to you to decide.

• Remember when the team was doxxed?
• Remember when the Bored Apes were involved in racism?
• Remember all the times "Bored Apes were hacked"?

It can be said that most people in the NFT space are not "in it for the technology."

Claims that BAYC owners have become victims of scams and "hacks" have never ceased, and there is evidence to back it up.

During the market's frenzy, when everyone was aping in, the Bored Apes brought substantial profits‌; however, the biggest profits went to those hunters‌.

There are many ways to separate the Bored Apes from their owners, from verified Twitter accounts‌ posting phishing links to exploiting vulnerabilities in the OpenSea user interface‌, BAYC's Discord‌ was hacked, and of course, the recent Instagram‌ hack, with total losses estimated at 2.4 million dollars‌.

The project is not short of scandals, but that hasn't stopped it from going mainstream.

Snoop Dogg is just one of the many celebrities involved in the project, many of whom received assistance from the agency "Moonpay" that provides NFTs to celebrities, or should we say Moonpay received assistance from these celebrities?

A variety of celebrities have participated in NFTs, and their reactions are always polarized.

Bagholders are ecstatic, while onlookers are fearful of the two brands' unnatural collaboration, as both brands are vying for your attention.

We can forgive those who doubt the authenticity of celebrities appearing in NFTs.

Yuga Labs and fans continue to capitalize on BAYC's success, launching derivatives like the Bored Ape Kennel Club and Mutant Ape Yacht Club, and even opening a physical burger joint‌.

However, the ultimate monetization strategy is inevitable.

ApeCoin, the currency of the Bored Apes, was launched on March 16 and airdropped to all BAYC holders.

With a staking plan that can be described as "paying ApeCoin holders with ApeCoin‌," can it be said that providing exit liquidity for the team is a key feature of the ApeCoin tokenomics?

Maybe not…… ApeCoin can be used to purchase NFTs on OpenSea, and it will be the native currency of the much heralded‌ Bored Ape metaverse. In "Otherside," fans will be able to use ApeCoin to purchase land (Otherdeeds).

The Otherdeeds minting began shortly after the launch of ApeCoin, as Yuga Labs was eager to provide some utility for the token.

The minting achieved great success‌, but primarily for Yuga Labs, not for anyone else.
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The first warning sign appeared before the launch.

Minting required users to undergo KYC before paying the minting price of 305 APE (about $6,000) to ensure that the price of APE would be driven above $25 in anticipation of potential landowners purchasing.

Then, aside from the mandatory network scams‌, the release caused the Ethereum network to crash for two hours. Gas prices soared, and users paid 60,234 ETH‌ ($170.8 million) to mint land NFTs, with 1,653 ETH ($4.7 million) lost purely due to failed transactions.

Yuga Labs announced that they would refund‌ all fees for failed transactions, but of course, the plan turned into another phishing site's target‌.

Aside from gas, this release brought Yuga $320 million in minting fees, plus about $475 million in secondary sales, pushing OpenSea's daily trading volume to historic highs.

All BAYC-related products saw a significant drop in value after launch.

ApeCoin is currently down > 40%, and Otherdeeds itself has dropped over 50%.

Yuga Labs' response to this chaos was deemed arrogant, blaming "Ethereum's bottleneck" and suggesting that the Bored Ape universe move to its own chain.

The statement was not well-received, with some pointing out that the lack of Gas optimization‌ in the minting contract led to over 40,000‌ excess ETH (> $100 million) being burned.

Burning so much ETH might benefit a bull market, but it seems purely wasteful.
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Aside from the poor OpSec stories of the holders, this has already become the first undisputed negative PR event in the BAYC world.

Through its steady stream of new product releases, Yuga Labs excels at maintaining the necessary hype around the BAYC ecosystem.

Could an Ape-chain be their next solution? Perhaps, who can blame them for going this route?

For them (and their holders), a centralized L1 might be a better solution. They are so wealthy and capable of building whatever they want.

Yuga is not a tech company (as we saw from the minting), but they perform excellently in their work, and if they can maintain the hype, their current focus on branding and marketing will surely lead to more.

Yuga's revenue model essentially fuels FOMO, selling heated air (or recently launched gas), which works very effectively for them.

However, even marketing masters cannot escape the Elon effect‌.