Speaking of the hottest NFT nowadays, bored ape Yacht Club (bayc) is firmly in the top position. Not long ago, the blockbuster news of NFT industry came from boring apes: first, it officially announced the acquisition of cryptopunks series IP, the ancestor of NFT avatar and once the first in market share, and then issued its own token apecoin (APE) and a new meta universe project otherside. The parent company Yuga labs also completed a financing of US $450 million in March this year, with a valuation of US $4 billion.
In April 2021, bayc launched pre-sale to the public, with an initial price of 0.08 eth, equivalent to about US $200. A year later, the floor price of bayc rose to 147eth in early May this year, and the price rose more than 1800 times.
Win the battle with the king of cryptopunks. Across art, fashion, entertainment and catering, the boring ape out of the circle has achieved great commercial success. It is no longer just a JPEG avatar circulating on social media, but an IP ecosystem. It has grown from the original niche circle to a phenomenal "NFT tide card", and is still marching into mass culture, with its value rising.
All this took only a year.
How do boring apes do it?
Four NFT novices, "kill" industry veterans
The creative source of boring ape is an imagination about wealth and freedom.
In the distant future, a group of apes who realize wealth and freedom by cryptocurrency get together. At this time, they have no mines to dig and stay bored in wooden houses in the swamp. The interior of the house is decorated like an underground bar. Colored lights of various shapes and a long string of ten thousand national flags are hung on the roof. Wine bottles are scattered on the ground and on the bar. The bent cigarette butts are not cleaned up. It's a mess.
Interior decoration of boring ape yacht club| Source: bayc official website
This is a club. The protagonists are apes who have both money and time. Most of them are expressionless, wearing all kinds of hats and sunglasses, colorful coats, some holding cigars, some biting pizza, and their eyes can emit two beams of light.
The apes' entertainment is graffiti on the bathroom wall of the club. Correspondingly, the holders of these NFTs in the real world can enter the virtual creation space bayc bathroom, where they can carry out digital creation and write and draw on the wall.
The behind the scenes team of boring apes is called Yuga labs, with four founding members and a part-time illustrator.
Among the four founding members, a pair of good friends are responsible for the creative content, one is gargamel (the gargamel of Smurfs) and the other is Gordon goner. These are their pseudonyms. Gargamel got a master's degree in creative writing. Gordon dropped out of art because of physical reasons. They like to stay together, drink beer, talk about literature, and talk about Hemingway and Wittgenstein.
Two people in the real world is very low-key, boring ape fire, their true identity has always been a mystery. Until February this year, foreign media revealed that they were all in their 30s. Gargamel's real name was Greg Solano, a writer and editor. Gordon's real name was Wylie aronow, born in Florida and a part-time trader.
The two men bought cryptocurrency in 2017 and made money at first. Later, they lost money because of blind leverage. As a result, they became believers in the encryption world. They always wanted to enter this field, but they didn't find a suitable way. They didn't get inspired until they saw the well-known NFT avatar project, such as encryption punk.
Cryptopunks was born in 2017. It is the first generation avatar NFT on Ethereum - a randomly generated 10000 pixel style character. At the beginning of the birth of encrypted punk, the concept of NFT has not been really established, and the relevant market is a blank. The founding team kept 1000 avatars, and the rest were sent to the wallet address of Ethereum users for free.
Encrypted punk NFT series| Source: larva Labs
In the following two or three years, NFT gradually came out of the circle. With its veteran status, cryptopunk has not only become the "top stream" of the crypto community, a symbol of identity and qualifications, but also the most watched blue chip project in the NFT market, with prices soaring in the secondary market. In March 2021, an encrypted punk avatar with a hat, sunglasses and a pipe sold for 4200 eth, about $7.6 million, setting the highest price record for a single NFT avatar at that time.
The founder of boring ape saw the success of encrypted punk and was inspired to try to make a avatar NFT, and then combine avatar and encrypted community through gameplay to create a new way of playing.
But neither of them knew technology, so they found two engineer friends to join. Their pseudonyms were no sass and Emperor tomato ketchup, which together formed the core team of boring apes. Later, Seneca, an Asian illustrator, was invited to be responsible for the image design and generation of apes.
One of the most thorny problems is that none of the four members has been in contact with NFT before, and the two engineers are not good at encryption and do not understand blockchain technology. Everything should start from scratch.
Working 14 hours a day, they soon found a way and knocked out the first string of code of the smart contract in February last year. Two months later, 10000 different styles of ape avatars NFT were born, and the pre-sale was officially launched. Each ape has its own exclusive number.
The image of a boring ape| Source: Yuga Labs
When these apes are observed together, they are more like "programming works" with random arrangement and combination of different single elements such as expression, coat and accessories, but in fact, they are scarce. According to media statistics, of the 10000 apes, only 49 have daggers in their mouths, 108 have zombie eyes and 115 wear Cross Earrings.
The unit price of pre-sale is 0.08 eth, about $200. This price was almost free in the cryptocurrency circle, and it took a week to sell it all. Also a week later, pranksy, a well-known collector in the NFT field, noticed the boring ape and began to promote it.
Since then, the boring ape has started the advanced road. A year later, it officially acquired its original "inspiration" encrypted punk series IP, recruited its predecessors, and ascended the throne of NFT.
Not just JPEG, to create "ape universe" IP
The success of boring apes is not a fluke. As the founder of cryptopunk said to the media after being acquired: "our specialty is to create in the early stage of technology, and we are not good at community management and maintaining public relations. Yuga labs are innovators of avatar NFT, and they are better at project operation."
Yuga labs is good at operation, which is first reflected in the expansion of ecosystem while the iron is hot.
After the first batch of 10000 boring ape avatars NFT sold out, the team felt that the words of byac series were too single. Two months later, they launched the "pet companion" NFT of 10000 boring apes - the bored ape Kennel Club (bakc), which was distributed to the holders of bayc free of charge.
Each holder can adopt a "pet dog" at random, which is the only corresponding relationship with the "owner". Of course, these "pet dogs" are also NFT.
Boring ape Kennel Club| Source: opensea
The world of boring apes is not enough with pets. The team continued to launch the derivative mutant ape Yacht Club (mayc) in August last year.
This batch of NFTs is the first "gene mutation version" of boring apes. The team airdropped the "serum" with mutant gene to the original group of holders, which is divided into three levels: M1, M2 and M3, from low to high. Different levels of serum determine the characteristics and degree of gene mutation of the original boring ape. The holders of M1 and M2 sera can see some original foundation after their ape mutation. If m3 is obtained, it means that very rare and unique mutant apes can be obtained, and the market price is higher.
Mutant ape yacht club| Source: opensea
The number of this issue is 20000. Half of them were airdropped to the original bayc holders, and the remaining 10000 sera were sold to the public at the unit price of 3eth and sold out within an hour. This brought the team $96 million in revenue.
Yuga labs expands its boring ape ecology step by step: there are protagonists and pets. The protagonists can also realize gene mutation and incarnate a new image.
The next step is to issue your own tokens. In March this year, bayc announced the launch of apecoin (APE) token, which is regarded as the original token of the boring ape universe.
According to the official introduction, ape is positioned as "a governance and practical token" to enable the decentralized construction of Web3. Holders can use ape to vote on community policies, and can also trade goods in the virtual world and the real world.
Otherside is one of the NFTs available for trading. This is the fourth NFT series newly launched by the team - a virtual land specially built for the meta universe.
There are 200000 NFTs in this series, half of which have been launched at the end of April. Similar to the previous playing method, the holders of bayc and mayc can apply for their own virtual land free of charge, and other members of the public can buy it with ape at a unit price of 305 apes.
Boring ape series has gone far beyond the scope of social avatars and become a growing ecosystem: in the encrypted world, there are story backgrounds, protagonist settings and entertainment activities, as well as their own land and currency.
A "ape universe" series IP has been born.
From curry to Sotheby's, boring apes out of circles
While creating wave after wave of "materials", the team's real operation ability is reflected in making boring ape IP a large cross-border household and stepping out of the niche of NFT and web 3.
Last summer, netizens saw that the twitter avatar of NBA star library was replaced by an ape image with blue hair, khaki tweed suit and blurred eyes.
Then the media revealed that curry spent 55 eth to buy the ape head, about $180000.
The celebrity effect has rapidly expanded the popularity and topic of boring apes, and people are curious or even puzzled: what kind of avatar is it, worth $180000? What's behind it?
This also drives the popularization of knowledge about NFT.
Some media have taken stock of a list of stars with boring ape NFT. Not only curry, but also basketball shark O'Neill, football star Neymar, pop singer Justin Bieber, rap star Eminem and Jay Chou.
In addition to making avatars for celebrities, what else can boring ape NFT do?
Universal Music Group has set up a super band kingship composed of four boring apes to hire artists and animators to transform the two-dimensional image of apes into 3D, so that they can perform in virtual reality and real scene in the future.
Rolling stone, a well-known foreign music magazine, has specially produced its first NFT digital cover. These apes have the same treatment as singer Bi Li.
Boring ape on the cover of Rolling Stone magazine| Source: rollingstone
Behind the boring ape project, there is a special marketing company, similar to MCN in NFT, which arranges the online red and KOL of the encryption circle for the boring ape series, and forwards and promotes it many times on social media every day.
Last September, Sotheby's, a world-renowned auction house, sold 101 ape NFTs and 101 kennel NFTs for $26.2 million, 30% higher than the upper limit of the valuation. In the same month, Christie's, another well-known auction house, also held an auction of boring ape NFT. A total of four NFTs were sold, with a total value of about $2.8 million.
The two auction houses are well-known in the field of traditional art, and the works of top artists such as Van Gogh and Monet will appear at the auction. The two public auctions of boring apes have improved the status of avatar NFT in traditional art circles in disguise, and the high price has once again attracted a wave of discussion and doubt. After all, people think it's just JPEG with different styles, not to mention aesthetic feeling, let alone the artistic achievements of master works.
If you don't understand, it doesn't affect the boring ape out of the circle. Star goods superimposed art auction. The cognitive impression of these ape NFT to the public is rare and expensive. Just like its initial plot setting in the virtual world, it is a toy belonging to the rich.
Investors and business leaders also began to buy boring apes, resulting in fomo psychology. "Fomo" is the jargon of the blockchain circle, which means fear of missing out, indicating a feeling of "fear of missing".
The cooperation between boring ape and fashion sports brand gives the general public a real opportunity to participate in and use this ape image instead of copying, pasting and storing it online.
At the end of April this year, "China Li Ning" announced that it had teamed up with boring apes to make the 4102 ape become the manager of the "boring ape Trend Sports Club" of Beijing Sanlitun flash store, and launched baseball caps, T-shirts and other fashion items printed with the image of boring apes. A huge image-based ape statue was also set up at the door of the store. Previously. Adidas has also cooperated with boring apes to launch peripheral products.
Li Ning boring flash store in Beijing Sanlitun, China| Source: Official microblog of Li Ning, China
Many brands are interested in the marketing and communication value of boring apes. Times, who focuses on intelligent health hardware, easily bought the ape image with number 1365 and plans to launch the "boring ape health club". Greenland Group, a Chinese real estate enterprise, also bought an ape image, symbolizing that it will get through virtual reality and enter the digital strategy.
In the United States, a boring ape themed restaurant has been opened, named "bored & amp; Hungary". The dishes include "boring ape set meal" and "mutant ape set meal". The former is hamburger and French fries, and the latter focuses on vegetarianism. In addition to the traditional card payment, customers can also pay with Eth and ape.
From virtual avatars to physical businesses, boring apes representing the trend culture have completely rushed out of the NFT world and realized the rise of super IP.
IP realization, NFT based business paradigm
The popularity and volume of boring ape IP are constantly improving, and the team has created its own business realization model. This is also different from other NFTs such as encrypted punk. It is a proven and feasible wealth password at present.
According to the circulation characteristics of NFT, generally speaking, the creator owns the copyright of the project. For each transaction, the creator can obtain a certain proportion of royalty income.
The uniqueness of the boring ape project party is that it has created its own business authorization mode, and transferred the commercial use right and sales right of IP to the holder. The holder can redesign and recreate these apes, and use and resell these apes according to their own needs. However, Yuga labs will be given a share of 2.5% of the selling price for each circulation.
For example, if Li Ning wants to launch boring ape series clothes, he needs to buy an ape NFT from the previous holder. After buying it, Li Ning has the right to make a secondary design of the ape image, integrate it into the brand logo, and then apply it to his various products, and then sell it to others.
Yuga labs studio is motivated to promote the circulation of these NFTs in the secondary market and encourage holders to use and sell them for many times. Because many of these holder groups or brands are well-known enough and have their own topic attributes. With their power, boring apes can cross the border and leave the circle, which can continue to stir up IP, even realize viral transmission, create more needs and recognition, and then achieve the most important effect - appreciation.
This is the result Yuga labs would like to see. Because as long as the copyright continues to circulate, the project party will have royalty income. The more times they sell, the higher the price, and the more they earn from it.
On the other hand, the holders also hope that the price will continue to rise. After they harvest a wave of marketing heat and product income, they can earn another price difference in subsequent resale.
In this sense, it doesn't matter who owns the copyright. The key is the circulation times and appreciation space, which determines the income of participants in all links.
Boring ape works with Adidas| Source: complex
According to the research report released by Nansen, a blockchain analysis platform, on May 11 this year, the secondary sales of boring ape series have accumulated more than 600000 eth. According to the 2.5% increase, Yuga labs has received at least 15000 eth of royalty revenue, more than 30 million US dollars.
Yuga labs has created an IP business model based on NFT liquidity. This business logic is not difficult to understand, but encrypted punk did not. Their terms restrict holders from using IP, so most people who buy encrypted punk just replace it with a avatar to show their identity on social media. However, all this came to an end with the boring ape's acquisition of encrypted punk.
Yuga labs announced that the later encrypted punk will be the same as the boring ape, and the holder can use and resell his own NFT copyright on demand for various scenarios such as products and marketing.
This commercialization path seems beautiful, but it also has defects and shortcomings. The widely known mature IP, such as Disney, Harry Potter and marvel, are based on complete story telling, supported by movies and comics, making the fan group stronger and cohesive. In contrast, the details of NFT are thin. Once the heat has passed, the sustainability and stamina of IP realization need to be verified.
It seems that boring ape is more like an IP business with blockchain technology and NFT application scenarios. It has realized the closed loop from the birth and rise of IP to the realization of value all the way, and created a set of NFT + IP business gameplay.
Yuga labs once said in an interview that he wanted to be a Web3 lifestyle company. In the future, the image of this ape may appear in more places you don't expect, but how long this heat can last and how far the IP road can go remain to be tested after the tide recedes.
reference material:
https://www.coindesk.com/learn/whats-the-story-behind-bored-ape-yacht-club-creator-yuga-labs/
https://www.buzzfeednews.com/article/katienotopoulos/bored-ape-nft-founder-identity
https://www.nansen.ai/research/more-than-jpegs-how-bored-ape-yacht-club-built-an-nft-empire