Everything you need to know about Bored Ape NFT, ApeCoin and Yuga Labs

If the explosion of non-fungible tokens (NFTs) has taught us one thing, it is that crypto and blockchain technology tends to appeal to a mainstream audience. This is especially true if the NFT project focuses on building an economy around a topic or trend that the everyday internet user can relate to. We have seen this play out in a majority of the most successful NFT projects thus far with Bored Ape Yacht Club (BAYC), in particular, pushing for new tropes that would further establish the concept of non-fungible tokens in our everyday lives.

So far, the creators of this fast-rising BAYC NFT collection have continued to introduce new paradigms that have quickly become the template for creating a sustainable hype around an NFT product. In light of this, it is only fair that we shine the spotlight on BAYC’s many wins, its shortcomings, and how all these elements have come together to define its importance in the ongoing NFT evolution. Here, you will find everything you need to know about BAYC, its creators, and future development plans.

What is BAYC?

Ever since the first NFT token standard (ERC721) was introduced on the Ethereum network, we have begun to see more and more utilities purposefully designed to capitalize on the possibility of establishing rarity and ownership via blockchain in the digital realm. For example, NFTs have begun to thrive in the gaming world thanks to the influx of NFT-based infrastructures that gives users full ownership over their in-game assets. However, much of the buzz surrounding NFTs have emanated from the digital art world where artists are increasingly incorporating blockchain as a tool for optimizing their outputs and democratizing the process of monetizing their creations.

At the height of this frenzy, there were record-breaking sales involving NFT arts with Beeple’s Everyday collage selling for $69 million in what still stands as a critical event in the nascent NFT space. While this is a given, we can fully capture the NFT art movement without mentioning the role that PFP (profile picture) NFTs play. For those unfamiliar with PFP-based NFTs, they are collections of digital artworks (usually over 1,000 pieces of artworks) that border on a common theme or character. More often than not, each piece in the collection comes with different traits that make them unique. The rarer the traits of the piece in question, the more valuable it automatically becomes.

Initially, CryptoPunks emerged as the de facto template for creating PFP NFTs, due to its unprecedented success that saw each NFT sell for anywhere from tens to hundreds of thousands of dollars. Following the success of CryptoPunks, more projects began to replicate this formula in hopes of attracting the same level of traction. Unfortunately, it proved a daunting task since CryptoPunk’s major propellant was the fact it was the first of its kind. This continued until April 2021, when Yuga Labs introduced Bored Ape Yacht Club, a collection centered around ape-themed NFTs. Unlike the PFP-based projects before it, Yuga Labs introduced elements that have helped create a sustainable buzz around its offering.

At the center of it all is the push to establish an active and close-knit community for the BAYC ecosystem such that holders can become a part of an exclusive club. While this was the initial goal, BAYC has gradually evolved into a movement in just under a year. Perhaps, the best way to describe BAYC lies in its current status as the most valuable NFT collection with its floor price currently $340,000 at the time of writing.

Simply put, BAYC is a collection of 10,000 ape NFTs showcasing unique traits and characteristics.

What inspired the creation of BAYC?

The creators of BAYC as well as the founders of Yuga Labs are Gargamel and Gordon Goner, which are pseudonyms. Before creating BAYC, the two friends had joined the crypto space in 2017 and they have featured mainly as traders and holders. However, they suddenly became aware of the opportunities that NFT provided and how it allowed them to contribute more to the ongoing crypto movement.

Gargamel, in an interview with Coindesk, stated that the emergence of NFT presented an avenue for them to showcase their creativity, and for the first time, take up active roles in the crypto community. He stated:

“It just seemed that … Hey, culture is coming to Ethereum. This is what we were waiting for. It felt like the doors were blown open to this whole new space, and as creative people that have been trying to be active – but in the end, quite passive – in interacting with crypto, we thought, here is a way for us to participate in crypto, and actually build something, even if it’s a ridiculous f**king club for apes.”

And so, they came up with an idea to create an exclusive club of NFT art owners that to an extent share the same experience or mentality. The idea that birthed this collection revolves around the fast-paced nature of the crypto market and the tendency of jumping blindly (aping) into crypto opportunities. So what happens when the market eventually slows down and there are no more crypto rewards and opportunities to capitalize on? BAYC looks to encapsulate the answer to this question as it postulates a future where crypto participants have become incredibly rich and bored. As such, they form a club and spend most of their time in a bar.

While speaking about how they came up with this idea, Goner explained that they believe that lazing around and spending money on weird stuff are some of the things they would do if they had made tons of money from crypto investments. He explained:

“And that’s the best part of that story, by the way. That was the turning point. I spent all night thinking about what that meant, that there was just going to be this d**k on the wall, as the first thing up. That’s when we came up with Bored Ape Yacht Club. The idea was that it was this place for degenerates to go, right? Because that’s who we were. We were they guys who aped into every f**king s**tcoin. We kind of are that person.”

Goner added that the whole idea bordered on the year 2035, long after much of the exciting crypto trends and money-generating opportunities had long faded away:

“We imagined it as, ‘Where would we go if we could go anywhere?’ It was the first time that we stopped thinking about what other people might want. And instead, the question became, “What would we want to buy?’ We just went back to our childhoods. And we said, ‘Oh, let’s put a swamp club in the Everglades, and fill it with apes who are just f**king super ‘80s hardcore and ‘90s hip-hop, and just super weird and crazy, you know?’ But more than anything, they’re just f**king bored, because the yield farms have dried up, and they’re all super-rich. It’s 2035 or whenever, and everyone who aped in is just rich beyond their wildest dreams. What do you do then? You just hang out with a bunch of apes and get weird, you know?”

Goner and Gargamel went on to recruit two software engineers, Emperor Tomato Ketchup and No Sass, to form the core founding team of BAYC. The collection eventually launched in April 2021. And while the initial response from the NFT community was lackluster, the project gradually generated hype and quickly became one of the hottest collections in the space. Before long, it surpassed CryptoPunk as the most valuable NFT collection with several celebrities including Paris Hilton and Steph Curry. So the question is: Why did BAYC become successfuL?

What is so special about BAYC?

Although BAYC was inspired by CryptoPunk, its creators opted for a more dynamic ecosystem that offers several utilities and privileges. For one, each Bored Ape NFT serves as a pass into the BAYC club and access to the community’s official Discord group. The exclusivity of this collection ensured that the NFTs retained their value. Not only that, it gave holders automatic invites to BAYC events and get-togethers.

Perhaps, more exciting is the possibility of having early access to other collections and products launched by Yuga Labs. Also, each holder received the commercial rights of the Bored Ape NFT in their possession. In other words, they could monetize the NFTs by selling merchandise and incorporating other money-generating strategies.

For Gargamel, what made BAYC special was the fact that users could relate to the narrative that birthed the project. It spoke of the crypto culture and maybe mirrors the personalities of core crypto investors and participants:

“Ever since the Bored Ape Yacht Club, we’ve seen like 1,000 different avatar collections come up, and a lot of them are really cool. But what we think was special – and what people could kind of read on top of ours – is that we didn’t just throw 3D glasses onto apes. And we didn’t have a long essay on what exactly what this was. But we knew what it was. It’s like Wittgenstein’s ‘let the unutterable be conveyed unutterably,’ or Hemingway’s iceberg theory. We knew all about what this world was, and why these apes are this way. And that somebody else might get a little tingle on their neck looking at it, thinking, ‘Yeah, this is kind of different. This isn’t just random.’ “

All in all, the success of BAYC can be attributed to the ecosystem’s ever-growing utilities. Goner pointed out that BAYC was arguably the first NFT art collection that kept building applications around its system:

“We just kept building. It’s funny. Before us, there were very few projects – not to say there were none – but there were very few projects where a founder stuck around and kept building utility. In fact, before us, very few people even talked about utility in NFTs. Everyone was just making a bunch of money selling NFT collections, and then f**king off to the south of France. We just sort of decided, what if we didn’t do that? Like, hey, what if we stayed an extremely small team? Yes, we made $2.2 million overnight, and then we worked 14 hours a day every day. And people see that. They know. We are always in our Discord, we have hundreds of DMs, we respond to almost all of them.”

What are MAYC and BAKC?

As part of the utilities made available, Yuga Labs has prioritized BAYC holders whenever it issues new NFT collections. More specifically, it usually distributes new NFTs to holders for free. In other words, part of the privileges of being a member of BAYC is that you get to receive free NFTs as in the case of the Bored Ape Kennel Club. Following the successful stint of BAYC, the creators decided to airdrop another collection of NFTs, called Bored Ape Kennel Club.

This time around, the NFTs were not sold to interested buyers. Instead, each BAYC holder received a free Kennel-themed NFT. As such, the BAKC collection consists of 10,000 NFTs just like the BAYC collection. At the time of writing, the floor price of BAKC is around $30,000. According to Gargamel, this move, in addition to the community’s charity works, was unprecedented and it did cement BAYC’s place at the top of the NFT market:

“One of the most innovative things we did was dropping our Bored Ape Kennel Club. We were exhausted, and we were thinking, ‘What if we just gave every Ape a dog?’ Everybody was aping into dogecoins. And crypto is so much about trust, so how do we signal that we want to stick around, we want to build utility here, and we want to think about the long term? What’s the best way to do that? So we thought, ‘Hey, what if we gave every single person an NFT for free, and gave all the royalties [off sales from exchanges like OpenSea] to charity?. We ended up donating around $900,000 to different animal charities for that.”

As a follow-up to the BAKC airdrop, Yuga Labs went a step further to launch another collection centered on the mutated variations of existing Bored Ape NFTs. To achieve this, Yuga Labs airdropped mutant serums with which BAYC holders can mint zombified versions of the Bored Ape NFTs in their possession. This collection was aptly named Mutant Ape Yacht Club (MAYC).

Note that the extent of the mutations depends on the tier of serums used by the BAYC holder. In total, there are 3 tiers named M1, M2, and M3. M1 and M2 serums usually yielded Mutant Apes that share some physical traits with the original Bored Apes NFTs. in contrast, the M3 serum effectively creates NFTs with very unique traits, which is why Mutant Apes mutated with M3 serums tend to cost more on the open market.

While speaking on the grotesque appearance of Mutant Apes and how surprisingly successful it has been, Will Gottsegen highlighted that, regardless of the factors propelling BAYC, its lack of artistic excellence may truncate its dominance:

“For now, this is what NFTs are, culturally. Mainstream consumers with a peripheral knowledge of NFTs aren’t thinking about Folia’s generative art experiments, or Hic et Nunc’s relatively diverse digital art collection, or even Meebits, the 3D NFT project from the creators of CryptoPunks that riffs on digital minimalism. Bored Apes, with their overwhelming aesthetic sameness and their all-important community aspect, are the blueprint, as they have been for the better part of this year. Of course, there are plenty of reasons to doubt whether BAYC will remain on top. The crypto market tends to move in cycles; if everything suddenly crashes, new NFT paradigms may emerge. There’s also the fact that Bored Ape-style NFTs are almost universally unappealing to look at (Lazy Lions, especially – Cool Cats get a pass, I think they’re kind of sweet). A Bored Ape spin-off collection called Mutant Ape Yacht Club takes those uncanny visuals to a grotesque extreme. It’s as if they’re daring you to mock them, to question how anyone could spend so much on these images. That the BAYC template has created real cultural impact beyond crypto is why it remains immensely successful, and it will always have a place in the canon for that reason. But there’s no reason it needs to continue to dominate to the exclusion of everything else.”

Daniel Roberts, the editor-in-chief of Decrypt also reiterated Gottsegen’s thought in an opinion piece where he noted that the explosion of “cartoon” NFTs, particularly BAYC, has diluted the potency of the NFT movement. He wrote:

“But I also blame Bored Apes for most of the NFT vitriol out there, and I don’t fault people who point to Bored Apes and conclude that NFTs are stupid. Those people aren’t reading about Art Blocks and the rise of generative art, or Axies and how they function as game pieces in a thriving digital world, or essays sold as NFTs through Mirror, or songs as NFTs via Royal. They see a cartoon ape with its tongue out that is supposedly worth $1 million, and they roll their eyes. When I watch that animated video of Bored Apes in space, I cringe just a little. There is no doubt that Bored Apes have become the poster child for NFTs. Is that good for the space?”

The rise of an NFT dynasty

Just as experts began to doubt the sustainability of BAYC, Yuga Labs reaffirmed its growing influence in the NFT space by buying the competitors. In what seems like a calculated move to dominate the NFT market, Yuga Labs, on March 11, 2022, acquired CryptoPunks and Meebits from Larva Labs. Note that CryptoPunks was BAYC’s major competitor. Hence, it is easy to see why Yuga Labs pursued this deal. With this acquisition, the company now owns the IP rights and copyrights to 1,711 Meetbits and 423 CryptoPunks.

Unsurprisingly, Yuga Labs has opted to replicate its BAYC working template for its two newly acquired collections. More specifically, holders of any of the CryptoPunk and Meebits NFTs that Yuga Labs controls now have commercial rights over their holdings.

While this is a given, experts have begun to raise concerns over the impact of Yuga Labs’ decision to acquire two of the most prominent collections in the NFT space. As argued in an article published on Coindesk and titled “The First NFT Monopoly,” Yuga Labs’ future decisions would have more impact on not just the value of BAYC, CryptoPunks, and Meebits but also the NFT market at large. The author, Will Gottsegen, explains:

“…Yuga Labs plans to add “utility” to the collection. ‘Utility’ is an increasingly nebulous buzzword in the NFT sector, and tends to refer to perks for investors down the line. If your NFT unlocks access to a private Discord channel, or to a pre-approved green list for another NFT mint, or a special 3D item on a metaverse platform – broadly speaking, that’s ‘utility.’ (Utility also has the potential to bring certain tokens under scrutiny from the SEC, since it can make NFTs look a lot like investment contracts.) What this means in practice is that the value of CryptoPunks will likely be closely tied to the value of Yuga Labs. Larva Labs isn’t exactly a mom-and-pop business, but its stubborn refusal to pump the value of its tokens in this specific way put it somewhat at odds with the ‘number go up’ ethos of the broader crypto community. (This isn’t to say its intentions were always totally pure – a controversy around a CryptoPunks subcollection known as ‘V1 Punks’ suggests the Larva Labs team hasn’t always handled community outreach in the best way.)”

Gottsegen went further to highlight the role of Andreessen Horowitz, the venture capital firm, in all of this, knowing fully well that the company has investment ties with all of the juggernauts of the NFT market, including Yuga Labs and OpenSea. He wrote:

“Where Bored Apes go, the rest of the NFT market goes. Now, whether they like it or not, CryptoPunk holders are joined at the hip with their Bored Ape counterparts. Such is the Matroyshka doll-like structure of the NFT market. Andreessen Horowitz has a stake in many of the valuable companies in crypto; OpenSea, an Andreessen Horowitz investment, controls most of the volume in the NFT market; and Yuga Labs, also reportedly an Andreessen Horowitz investment, now controls some of the market’s most valuable intellectual property. There’s no antitrust legislation in crypto – but maybe that’s the point.”

Armed with an array of prestigious NFT collections, Yuga Labs has announced plans to introduce its very own metaverse featuring BAYC, MAYC, Cryptopunks, Meebits, Cool Cats, CryptoToadz, and World of Women. Called Otherside, this metaverse would incorporate an interoperable landscape where all of the above-mentioned NFTs can coexist.

What are ApeCoin and ApeCoin DAO?

In March 2022, Yuga Labs launched ApeCoin, an ERC20 token designed to create more utilities for BAYC members. More importantly, ApeCoin functions as the governance token as holders can participate in the decision-making process of the BAYC ecosystem. Like most decentralized applications, the BAYC relies on ApeCoin to ensure that members can reach a consensus about policy changes and system upgrades.

Also, Yuga Labs announced that it would adopt ApeCoin as the utility token for all the services and products it launches henceforth, including Otherside. Yat Siu, the co-founder of Animoca, the company Yuga Labs is partnering with to build Otherside, noted that ApeCoin encapsulates BAYC’s culture, technology, and creativity. He stated:

“ApeCoin a token that represents the zeitgeist of NFTs today. It is, in a sense, the expression of the current culture of NFTs… ApeCoin itself has some starting utility, which will kick off with games and more to come. The benefits will be the creative energy that combines this mix of technology and culture that the BAYC community has kicked off already which will reach much larger audiences due to the fungible and transferable nature of ApeCoin.”

That said, Yuga Labs has gone the extra mile to ensure that it evades the regulatory implications of issuing an asset that may indeed prove to be unregistered securities. And so, the company has set up a convoluted system for the management and issuance of ApeCoin.

Going by the information made available, the issuance of ApeCoin was undertaken by ApeCoin DAO, which consists of council members namely, Reddit co-founder Alexis Ohanian; Amy Wu, head of crypto exchange FTX’s venture arm; Maaria Bajwa of Sound Ventures; Animoca Brands’ Yat Siu; and Dean Steinbeck of Horizen Labs. They will be responsible for enacting the decisions of the BAYC community.

Notably, these individuals will also double as the committee members of the Ape Foundation, an entity created for the sole purpose of managing daily operations. That said, Yuga Labs and the founders of BAYC control a sizable share of ApeCoin’s total supply. Specifically, Yuga Labs has received 160 million APE with 10 million APE going to charity. Apart from this, 10 million APE has been allocated to BAYC founders and another 140 million APE went to launch contributors, which is believed to include Yuga Labs’ partners and investors.

Doxxing BAYC founders

Remember that we stated that the two founders of BAYC used pseudonyms in an attempt to hide their identities. The two had kept their identities a secret, which is a common practice in the decentralized finance space. Those that support this practice argue that utilizing pseudonyms is a good way of ensuring that decentralization remains a key component of crypto projects. While there is some truth to this argument, using pseudonyms also offers bad actors an easier means to carry out their dastardly acts.

Bearing in mind the sensitivity of privacy in the crypto space, it is easy to see why the revelation of the identities of BAYC’s founders attracted a lot of scrutiny from both the pro-privacy and pro-transparency camps. In February 2022, Katie Notopoulos, while stating that the enormous size of the BAYC ecosystem requires that we scrutinize the competence and reputation of those with significant influence over projects, revealed that the real identities of the two creators of BAYC are Greg Solano and Wylie Aronow :

“As NFTs continue to expand into popular culture and Web3 goes mainstream, the issue of pseudonymously run companies dealing with real money — and lots of it — is a new economic and legal reality. There are reasons why in the traditional business world, the CEO or founder of a company uses their real name and not a pseudonym. For publicly traded companies, executives must be named in Securities and Exchange Commission disclosures and reports. For even smaller private companies, there are banking regulations and “know your customer” laws that require real names for banks lending money or holding accounts for companies. These laws are in part to prevent terrorists, criminals, or sanctioned nations from doing business in the US.”

In the aftermath of this revelation, Daniel Kuhn wrote that since Notopoulos only had to dig through public records to unravel the identities of BAYC’s founders, there was no foul play. He stated:

“Solano and Aronow could have chosen to keep BAYC as a widely successful NFT experiment and their identities secure. But they signed incorporation documents because there was a fortune to be made. It was in that moment of choice that the BAYC founders doxed themselves, forfeiting their right to privacy and secrecy. Now listen ye anons, I believe – along with my employer, which has a policy of respecting sources’ pseudonyms – that your identities are valid. That there is a general right to remain unknown, that pseudonymous celebrities may be trustworthy (within reason) based solely on the reputations they build. But if you must remain unknown, then you must also do everything you can to ensure that. No one is assisting you here. Crypto is an adversarial environment. Reporters are paid to bring private details to light. Competitors want your business secrets. The public has an unquenchable thirst for gossip. Scammers want to scam you, and knowing your secrets is leverage.”

Kuhn added that for an industry that is increasingly being influenced by corporate rules, the onus falls on those looking to remain anonymous to go the extra mile to keep their identities a secret:

“To some extent, crypto is playing by a new set of rules. It stands opposed to corporate and government power in trying to give people the ability to interact directly in a peer-to-peer fashion. It’s sold out a bit – giving an inch here and there for profits. It’s surrounded by rule-makers. It’s been forced to capitulate, sometimes. Not everyone is playing by crypto’s rules. Why would you expect otherwise? If you want to be anonymous, then you must cover your tracks. Rules were meant to be broken, after all.”

Lior Lamesh, co-founder and CEO for GK8, shares a similar view during an interview with Cointelegraph. He believes that Notopoulos was merely doing her job, which is to bring the hidden to the light. He stated:

“This should not be interpreted as a cause for concern. What can be said now is that these digital arts will almost certainly not be used as a conduit for money laundering because the BAYC team will implement new data protection methods. So, in terms of a chance to do the right thing, we can’t say the Buzzfeed journalist’s move is out of place.”

In contrast to Khun’s views, Giselle Nagle, operations head for PhotoChromic, told Cointelegraph that it should be the prerogative of individuals to either reveal their identities or not:

“To distill it down, there are two main aspects to your identity — personal and public. Pseudonymous identity works best when you need to trust that the individual behind the identity is who they say they are and when sensitive information is being exchanged. However, in both cases, the individual should have full autonomy over whether or not to expose their identity.”

As for 0xngmi, the pseudonymous founder of DefiLlama, the whole essence of the blockchain movement is that users should be empowered to make their own choices whether it is to invest in a project founded by an anonymous team or not. He wrote:

“You have your money and you can use it any way you want, whether that be by putting it on straight up ponzis, buying worthless coins, or farming on some protocol with an anon founder that could rug the whole thing. It lets users make their own risk assessments and execute them, without anyone restricting their autonomy… Let’s embrace this. If people want to put money on protocols with anon founders then that’s it, there’s no need for anyone to make decisions for anyone else, just let people make their own choices. Let’s abandon the idea that users are stupid and need to be protected by someone with more knowledge, they are just mature people that are making their own decisions based on their own risk assesments.”

0xngmi added that this is their approach at DefiLlama as they do not discriminate when listing decentralized projects:

“This is our approach at defillama: we list everything. Our role is just to provide accurate data, we don’t make decisions for our users. We won’t remove any protocol because a user could discover it on defillama, instead we treat users as autonomous people that can make their own decisions and we certainly don’t believe we are better than them and should be telling them what to do.”

Funny enough, following the doxxing fracas, BAYC announced that members had to scale KYC requirements to access one of its upcoming products.