Miami-based Yuga Labs is best known as the NFT firm behind Bored Ape Yacht Club and it has had a prolific rise over the last year. Since launching its collection a year ago, the company has made waves in the industry with many considering the project to be the face of NFTs. But what led to Yuga Lab’s surge in popularity and can the company keep up this momentum going forward?
Since its launch last year, Bored Ape’s NFT collection has exploded into the mainstream. It has made waves from Twitter feeds to billboards in Manhattan to even being on the cover of magazines and having a movie produced (in collaboration with Coinbase). BYAC’s popularity has attracted celebrity bytes such as Justin Bieber, rappers Snoop Dogg and Eminem, Serena Williams, Jimmy Fallon, and Tom Brady. The collection, which features over 10,000 NFTs, debuted at the end of April 2021 with an initial mint of 0.08 Ether (approximately $200 at the time). The project sold out in just under a week. Since then, the collection has been traded for a combined value of over $1.5 billion while currently boasting a market cap of nearly $3.9 billion (making it the most valued NFT collection currently). But BAYC’s popularity is often misunderstood, with the project being seen as an enigma in the NFT space.
In reality, BAYC’s artwork isn’t ridiculously valuable because it looks good. It’s valuable because it also serves as a digital identity – for which its owner receives commercial usage rights. This means that they can sell any sort of spinoff product based on the art. In addition, BAYC tokens act as ID cards, giving owners access to an online Soho House and other real-world private events. Traits like these increase its scarcity & utility, thus driving up the price. In addition to the 10,000 Bored Apes that currently exist, Yuga Labs’ BAYC ecosystem has three additional NFT projects, namely The Mutant Ape Yacht Club (3rd most value NFT project), The Bored Ape Kennels (14th largest by market cap), and The Bored Ape Chemistry Club. The estimated market cap for the four collections has risen to an outstanding $5.5 billion. With the meteoric rise of BAYC, Yuga Labs has been doubling down on its vision over the last few months through several launches and acquisitions in the space.
In March, Yuga Labs acquired the rights to CryptoPunks and Meebits from Larva Labs. CryptoPunks is one of the oldest and most valuable brands in the NFT space, while Meebits has quickly cracked the top ten NFT projects since launching in May of last year. Part of the deal includes the transfer of 400 CryptoPunks and 1,700 Meebits from Larva Labs to Yuga Labs. Yuga Labs’ acquisition of the IP rights to CryptoPunks and Meebits helps it consolidate its position as the leader in the market while also bringing it one step closer to fulfilling its grand ambitions. CryptoPunks and Meebits have an estimated market cap of $1.9 billion and $350 million. The inclusion of these and BAYC’s existing projects elevates the brand value to over $7.7 billion, representing nearly 39% of the $20 billion market cap of Ethereum’s top 100 NFT collections.
While the purchase of Cryptopunks and Meebits makes the company a juggernaut in the space, it comes when NFT volumes have started to cool off. Daily NFT sales have fallen from a peak of $400 million at the end of August to $70 million in April. Despite the short-term challenges, Yuga Labs’ acquisition remains significant for its future ambitions.
Yuga Labs is looking to grow the BAYC collection beyond just NFTs. To achieve this, the company is launching a metaverse project called Otherside which connects various NFT projects. Co-founder Gordon Goner has compared Otherside to a player-run virtual world seen in movies such as ‘Ready Player One’, which is interoperable, decentralized, and gamified. Yuga Labs’ acquisition of Cryptopunks and Meebits also gives it a portfolio of some of the largest NFT IPs to pull from while crafting Otherside.
Yuga Labs has had several positive developments over the last month to help it reach its goals in the metaverse. In late March, the company launched a cryptocurrency called ApeCoin which is expected to serve as a primary token for new products and services from the company. This includes a play-to-earn blockchain developed by the company in partnership with the nWay. Yuga Labs aims to improve the interoperability of the metaverse by enabling ApeCoin to be used as a currency in other gaming titles or as a general-purpose digital currency. While a DAO oversees ApeCoin, it could position BAYC as the center of a new open-standard metaverse.
Just a few weeks after announcing the acquisition of Cryptopunks and the launch of ApeCoin, Yuga Labs continued to build momentum by raising $450 million at a $4 billion valuation. The round was led by Andreessen Horowitz, making it one of the largest raise rounds for a company in the NFT space. The funding, combined with the company’s existing IPs and cryptocurrency, should help it to bring Otherside to life. Otherside is expected to be an interoperable digital playground, not limited to BAYC holders, thus making it seem like a compelling alternative compared to Meta’s centrally focused Horizon Worlds.
In just over a year, the team at Yuga Labs has been able to build not one but three successful NFT projects. However, the company hasn’t been resting on its laurels and is now looking to launch the next leg of development on its metaverse project through successful acquisitions of Cryptopunks and Meetbits, the launch of its cryptocurrency, and raising funding to increase collaborative projects. The company’s future success will depend on its execution while also trying to maintain momentum from a currently engaged company.
Nicole Muniz is CEO of Yuga Labs LLC with Greg Solano and Wylie Aronow listed as founders.
The NFT stands for Non-fungible Token and is a token standard on cryptocurrency networks. Fungibility refers to the identical and interchangeable properties of an asset’s units, such as a bitcoin or a US Dollar. NFTs have no such properties as the asset can only exist as one unit; there are no other units that can replace it, examples being a one-of-a-kind piece of art or a fingerprint.
The APE token is available APE/USDT on AscendEX.
Currently, Yuga Labs LLC owns the IP to Cryptopunks.
Yuga Labs LLC acquired rights to Cryptopunks on March 11 2022, but the terms were not publicly listed. A rough estimate based on the value of Cryptopunks at the time was more than $100 million.