NFTS

Why BAYC is the biggest thing in NFTs

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Your five-minute guide to the best of Protocol (and the internet) from the week that was, from the biggest thing in NFTs to the internal power structure at Meta.

Planet of the Bored Ape Yacht Club

In the NFT world, there’s the Bored Ape Yacht Club and there’s everything else.

Roughly $17.7 billion was spent on NFTs last year, according to the annual report Non-Fungible released this week. The NFT market is growing like a weed on practically every metric, and the Bored Ape Yacht Club continues to be the most interesting project in the space.

Actually, before I get to that, a couple of other interesting NFT facts from the report. That $17.7 billion comprised about 27.4 million sales, and the average price of an NFT was about $807. About 2.3 million buyers were active in 2021, which means the average NFT owner made about 11 transactions last year. And the demand is vastly outstripping the supply; the number of active Smart Contracts, which is a decent proxy for the number of NFT projects on the market, quadrupled while the number of buyers went up almost 3,000%. The NFT market is still relatively niche, everybody’s getting rich and as the report found, everybody’s “awaiting new projects with greater added value in order to live up to the promise made by NFT technology.”

And that brings us back to the Bored Apes. If you want to understand the true potential of NFTs — the promise of exclusive club access, ownership of a culturally relevant piece of art and a community bigger and cooler than most — the Bored Ape Yacht Club is the closest thing you’ll find. It was the second-highest-grossing NFT collection in 2021, according to Non-Fungible’s study, just behind the CryptoPunks, and the report’s authors said it could take the top spot this year.

But the BAYC and its creators at Yuga Labs are culturally relevant in a way no other NFT project can touch. Following the Bored Apes is like getting a whirlwind tour through the entire NFT-verse. Over here, a band full of NFTs is debuting a terrible song called “WAGMI!” Over there, the BAYC is raising millions for Ukraine! There’s Bored Ape weed and Bored Ape apparel and Bored Ape trading cards and on and on it goes. Yuga Labs is working on a Bored Apes token and partnering with Animoca on a play-to-earn game that’s sure to spark fights in the industry. (There’s also lots of speculation that Bored Apes are coming to Sandbox or maybe another metaverse real-estate platform.) Bored Apes are turning into Mutant Apes through another Yuga Labs project, and owners are hanging out in the collaborative graffiti board known as The Bathroom . The point is, Bored Apes aren’t just an art project; they’re a genuine cultural phenomenon.

This comes with downsides, too: The Bored Apes are also at the forefront of all the complicated questions about crypto regulation and security. A Bored Apes owner is suing OpenSea over a bug that led to him selling his Ape for 0.01 ETH, and there have been a number of other Bored-Ape-related issues on OpenSea. OpenSea at one point froze a number of Apes on its site, which raised an interesting question: Isn’t that exactly the kind of thing the blockchain is supposed to make impossible?

This week, the latest BAYC project — a mysterious website called somethingisbrewing.xyz — appeared and got a lot of users excited. Almost immediately, it sparked a controversy: The page required people to link their MetaMask wallets and submit some personal information required under Know Your Customer laws. That’s a fairly normal thing to ask when money’s being thrown around, but it definitely violates the anonymous and pseudonymous NFT culture. The Bored Apes won’t be the last to reckon with this, either.

Going forward, Yuga Labs has a tricky situation to navigate. Apes have become so expensive that the BAYC is now virtually impenetrable; but in some ways, that exclusivity is exactly the point. Anything Yuga Labs does to open the gates a bit and bring more people into the Ape-verse also inevitably diminishes the value of the 10,000 NFTs that gave the company its start. Right now, the Apes are among the few NFTs that are genuinely more than a JPG, and that’s a status the BAYC doesn’t want to lose.

But there are other ways to expand. Yuga Labs announced Friday that it’s acquiring CryptoPunks and the Meebits, the two other largest NFT projects on the market, from Larva Labs. But the Apes are still the company’s focus; “the BAYC ecosystem will remain the center of our universe,” Yuga Labs tweeted. “We believe that what’s good for Punks is good for Apes and the rest of the space. Likewise, what’s good for Apes is good for Punks. We want to grow the pie, not fight over slices.”

We still haven’t figured out what NFTs will be for, I don’t think. Even Yuga Labs is still just experimenting and trying things, taking advantage of the BAYC goodwill and cachet. But it’s increasingly clear that if you want to know where this is headed — good or bad, up or down, world-takeover or total crash — all you really need to do is watch the Bored Apes.

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You tell us

We asked you to tell us about your first NFT purchase, and you responded! Here were a couple of our favorite answers:

“After doing a ton of research on NFTs last summer, I quickly realized the industry was saturated with men led projects. The discords were filled with dudes and felt like a hangout at a frat party, it was not necessarily a community that I felt part of.

I began really paying attention to some women-led NFT projects that were popping up. One that really caught my eye in September was called the Crypto Chicks. I really loved the art and felt that the community was warm, supportive, and one that I wanted to be part of. Finally, in late October, I took the plunge as the prices continued to skyrocket and bought my first NFT, a crypto chick! As soon as I bought it, I announced it on Twitter, and was immediately flooded with hundreds of welcome messages from others throughout the community. I finally understood what NFTs were all about, not just necessarily about owning digital art, but being part of a community of people that were there to hype and support each other.

I have since bought many NFTs, most of which are women-led and purpose driven as well. I still think the Crypto Chicks community is the best and I definitely have my eye on more of them.” —Anastasia Dellaccio

“I own some NFTs — mostly through Rally.io, where I run the $CMO coin and hold various creators’ NFTs as well. I like experimenting with them, like using football-themed NFTs as entry tickets for a Super Bowl pool. I do also have a number of moments from NBA Top Shot, even if I can’t name more than a handful of players in the whole league.” —David Berkowitz

“I bought a CryptoKitty in June 2018. Not yet a billionaire. It’s been fascinating to watch the same boom and bust cycle repeat itself: ’21/’22 looks a lot like ’17/’18, just 10x bigger.” —Christian Keil

The best of Protocol

The hunt for Russian crypto is on, by Ben Pimentel

  • Crypto’s role in the war in Ukraine continues to be complicated. And as the world cracks down on money moving around in Russia, the sanctions enforcers are keeping an increasingly close eye on the blockchain. Because sometimes, anonymity isn’t all that anonymous.

Amazon’s entrepreneur dream is closer to a nightmare for many, by Anna Kramer

  • The Delivery Service Partner program sounds to many entrepreneurs like a dream job: working with Amazon, but owning your own business. Amazon is a ruthless partner, though, and sometimes even being “Fantastic Plus” isn’t good enough. When that happens, these business owners are finding it hard to get out and move on.

Working with the military is lucrative. For enterprise AI companies, it’s also a minefield, by Kate Kaye

  • Military contracts for tech companies are a complicated thing. For all the money and patriotic fervor, there’s also going to be a backlash from employees who don’t want to work in the service of war. But for the companies themselves? They’re finding it’s mostly worth the trade. Because it’s really good business.

Want to engage your remote team? Turn that corporate presentation into ‘The Tonight Show’, by Lizzy Lawrence

  • The future of presentations is you doing a Steven Colbert impression, sitting at a desk with a virtual screen floating over your left shoulder as you try your best to entertainingly disseminate quarterly results. Get ready, because the expectations are only going up.

Elden Ring is a triumphant success. It’s also a lightning rod for controversy, by Nick Statt and Janko Roettgers

  • Gamers everywhere are obsessed with Elden Ring, one of the biggest and most immersive open-world games ever made. But is it too hard? Does its maker, FromSoftware, have an obligation to do better? And what does it mean if “punishingly difficult” is the way of the future?

Exit interview: Facebook’s former counterterrorism chief talks Meta’s moves in Russia, by Issie Lapowsky

  • How to think about social platforms’ responsibility in Ukraine, courtesy of Brian Fishman, who would know. This line will be one we come back to: “One of the things that we’ve got to be careful of therefore saying is: Well, if [Meta] did something here in this Russian invasion of Ukraine, they must do it in other places.”

The best of everything else

Facebook Libra: the inside story of how the company’s cryptocurrency dream died —The Financial Times

  • A terrific deep dive into the life and death of Libra that comes to a not-terribly-surprising conclusion: So long as it was a Facebook project, Libra never had a chance. It makes you wonder what chance Meta might ever have to innovate again.

The many escapes of Justin Sun — The Verge

  • Your crypto caper of the week, digging into the mysterious Tron founder who seems to be both everywhere and nowhere all the time. It’s a story about risk tolerance, about the checks and balances that don’t really exist in crypto and about what it takes to stay one step ahead of the system.

Inside the volunteer ‘police department’ arresting people in VR —Input

  • A group of self-selected users is patrolling a popular VR world, trying to keep the peace. Except for when they’re causing trouble. It’s Neighborhood Watch meets LARPing meets the metaverse, and it feels like a preview of a world to come.

The infinite reach of Joel Kaplan, Facebook’s man in Washington —Wired

  • It’s undeniably true that Meta is Mark Zuckerberg’s company, and what he says, goes. It’s also true that Joel Kaplan may have Zuckerberg’s ear more than any other single person at the company. And the way he uses that influence is changing the way Facebook approaches politics and the way it operates in the real world.

How Redditors exposed the stock market — The Problem With Jon Stewart

  • This one caused a ruckus on Twitter, as Jon Stewart takes a blowtorch to basically everyone involved in the bonkers current state of the financial industry. But it’s fun and funny, and I bet you’ll nod your head at more of it than you’d like.

At the bottom of an icy sea, one of history’s great wrecks is found —The New York Times

  • Ernest Shackleton’s voyage on the Endurance is a classic story of grit and determination, and the kind of story many people in tech like to share and cite in conversation. More than 100 years after the ship sank, researchers found it. It took more grit, more determination and a lot of seriously cool tech.

A MESSAGE FROM AURA

From fraudsters to hackers, the web has its share of bad actors. Aura’s all-in-one digital protection keeps them at bay, so you can do what you love to do online—safely. Sign up for your free trial to experience how our powerful security fits seamlessly into your life.

Learn more

Thoughts, questions, tips? Send them to our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

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