The world of crypto is going apes! Over the past month, we’ve seen new all-time highs in most major cryptocurrencies, as Bitcoin passed $65,000 and Ethereum passed $4,500. The success is not limited to the blue-chip projects. Even embarrassing meme coin projects, like Dodge and Shiba Inu, have seen their market caps rise by billions.
But the rise in crypto prices is not the “going apes” I’m referring to.
I’m talking about the Bored Ape Yacht Club.
In case you haven’t heard of the Bored Ape Yacht Club, it’s definitely something that should be on your radar. It’s the hottest project in crypto right now because it’s at the intersection of NFTs, gaming and the metaverse.
And the best part is that they’ve partnered with Horizen Labs to help launch a token! Over the past month, I’ve worked closely with the Bored Ape Yacht Club founders to execute what will surely be THE biggest token offering of 2022.
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What is the Bored Ape Yacht Club?
Bored Ape Yacht Club (BAYC) is a blockchain project most notable for its collection of 10,000 Bored Ape Non-fungible Tokens (NFTs). These are unique digital collectibles that exist on the Ethereum blockchain.
In April 2021, BAYC created 10,000 unique iterations of ape avatars and put them up for sale as NFTs. The 10,000 avatars were programmatically generated from over 170 possible traits. From the apes’ skin color, headwear, and clothing no two apes are the same. Each Bored Ape NFT design remained hidden until the initial collector paid for it.
At the time of launch, BAYC sold each NFT at a standard price of 0.08 ETH (roughly $200 at the time of issue).
Since then, the value of each BAYC NFT has skyrocketed. Today, BAYC NFTs are trading at a floor price of about $140,000. Meanwhile, the cumulative market capitalization of all BAYC NFTs is around $1.7 billion. This makes BAYC NFTs one of the most successful NFT projects to date.
What are NFTs?
NFTs, or Non-fungible Tokens, are digital assets issued with a unique identifier code. NFTs are non-fungible because one cannot partition or trade the tokens fractionally. Meanwhile, owners can verify the uniqueness of their NFT on the blockchain.
This is different from most cryptocurrencies in use today, such as BTC or ETH, where each token is indistinguishable from another (fungible) and exchangeable in fractions of a token.
In the past year, artists from all over the world have begun producing digital paintings, collectibles, and music albums as NFTs. NFTs enable fans to claim ownership of unique creative works with verifiable scarcity. In some cases, ownership of an NFT even gives access to exclusive communities or benefits.
NFTs have also opened up new funding methods for artists and creators, as royalties can be directly programmed into the tokens. This enables creators to automatically earn a percentage of every resale of their NFTs in perpetuity. All without the need for a publisher or other middleman to manage the process.
As the space is evolving, we are discovering new use cases for NFTs on a daily basis.
What Makes Bored Ape Yacht Club Special?
As excitement around NFTs builds, new projects spring up every day. But don’t get confused. BAYC isn’t just another trendy NFT project.
BAYC has reached a level of success that is hard for most people to comprehend. It is now an entertainment company that rivals mainstream media giants. Soon expect to see deals with every major brand, just as you would a new Marvel or Disney movie. And also, expect to see new games built around the BAYC ecosystem.
BAYC even signed a talent deal with Guy Oseary, one of Hollywood’s most powerful managers, representing Madonna, U2 and dozens of other high-profile artists.
But what makes BAYC NFTs so unique and valuable is not just the entertainment value of its brand. The real value lies in the fact that the owner of each BAYC NFT owns the commercial rights to exploit that NFT as he or she desires.
That’s right. Owning a BAYC NFT allows you to exploit the NFT and earn money.
As a BAYC NFT holder, this means that you can sell t-shirts and hats with your ape’s image. You can put your ape in movies or TV (many ape holders have already signed talent agreements with CAA, the most powerful talent agency in Hollywood). And you can even make derivative NFT collections based on your ape.
In fact, one of my favorite derivative works of the BAYC is a new NFT project called Metasaurs. Metasaurs is a collection of 9,999 NFTs made by combining one BAYC NFT (named Dr. DMT) with a collection of dinosaurs. The Metasaurs project has exploded in popularity over recent months and its NFT collection is now worth tens of millions of dollars.
What does this mean for Crypto Law Insiders?
As much as mainstream media pundits act like NFTs are a fleeting trend, like Beanie Babies or a pet rock, they’re real and here to stay.
Sure, the value of many existing NFT projects will go to zero. So I’m not suggesting you invest your life savings in NFTs.
But the industry that’s being built today will be here forever.
Embrace NFTs because they represent the future of gaming, entertainment and the digitization of assets. If you’re thinking of launching a new project or are part of an existing project, I highly suggest incorporating NFTs into your activities.
One day soon NFTs will be an integral part of everyday life. They may be what finally makes blockchain mainstream.
In future articles, I will follow up with some of the new legal issues arising from NFTs, so stay tuned.