ApeCoin is just the beginning: Bored Ape Yacht Club has big plans to enter the metaverse
After its $450 million funding round this week, Yuga Labs is officially the biggest name in NFTs, but it could also soon be the biggest name in the metaverse.
The recent funding round was led by VC powerhouse Andreessen Horowitz, and brought Yuga’s valuation up to a whopping $4 billion. But just as dramatic may be what Yuga wants to do with all that money: reshape the still-formative metaverse space.
To rewind a bit, Yuga is the firm that took center-stage in late 2021 and early 2022 as NFT mania took hold, culminating in NFT investments from celebrities including NBA star Steph Curry and pop star Justin Bieber. Like thousands of others, they own Yuga’s signature Bored Ape Yacht Club NFTs, the cheapest of which is currently worth more than $300,000.
What was already a huge business became even bigger earlier this month, when Yuga oversaw an “airdrop” of a special cryptocurrency token called ApeCoin, issued by a decentralized autonomous organization (DAO). Although technically separate from Yuga, Bored Ape NFT holders got thousands of free ApeCoin, and suddenly held an asset they could trade in for many thousands of real world dollars. ApeCoin surged as much as 90% in its second day of trading.
For its follow-up, Yuga wants to take the natural next step and let Bored Apes hang out with each other. And where better than the metaverse?
Yuga wants to take you to the Otherside
Shortly after the launch of ApeCoin, Yuga Labs teased a metaverse platform called Otherside.
Details are scarce, and there is no definite release date for the project, but Bored Ape Yacht Club’s co-founder Wylie Aronow, who goes by the pseudonym Gordon Goner, told the Verge that he imagines a multiplayer role-playing game and “an interoperable world” that will be “player-run.”
According to a leaked pitch deck that appears to be created by Yuga that was circulating in crypto communities on Reddit and Twitter, the company is already looking to use a potential metaverse platform to reward its existing community. The deck reveals that Yuga Labs plans to include a total of 200,000 plots of land, and 30% of the first 100,000 plots will be distributed to existing Bored Ape Yacht Club and Mutant Ape Yacht Club holders.
The prospect of free land is already making a buzz in the Bored Ape community, according to Ramon Govea, the founder of IP development studio Myth Division, and the owner of seven Bored Apes.
“Owning virtual real estate is a viable path for wealth building when you’re aligned with a company that is focused on infrastructure first,” Govea told Fortune. “Whatever is on the Otherside, as ApeCoin holders, we have an opportunity to define it.”
A ready-made metaverse community
Yuga Labs’ Otherside metaverse project will join an increasingly crowded group of metaverse platforms, some of which also incorporate NFTs and cryptocurrencies.
Platforms like The Sandbox and Decentraland have emerged as the most popular so-called Web3 metaverses. Both of them incorporate NFTs, which enables users to buy land and in-game assets like avatar outfits that technically belong to them and not the platform. Each also has its own cryptocurrency.
Yet, in building their metaverse platform, Yuga Labs has an advantage when it comes to the brands in its portfolio.
After acquiring the rights to the Meebits and CryptoPunks NFT collections earlier this month, Yuga Labs now controls four of the top NFT collections: Bored Ape Yacht Club, Mutant Ape Yacht Club, Meebits, and CryptoPunks. Each of these NFT collections has passionate communities that could make all the difference in whether Yuga’s metaverse is a vibrant metropolis or a ghost town.
To try and attract users, the Sandbox has partnered with notable companies like Adidas, Warner Music Group, and Atari while large companies like JPMorgan Chase and Samsung have opened virtual spaces in Decentraland. These companies are all essentially looking for their own metaverse communities, but Yuga already has one built in, or at least that’s the idea.
Still, Decentraland’s creative director Sam Hamilton says he’s not threatened by Yuga Lab’s entry into the metaverse space.
“We have collaborated in the past and I love their team, really cool people,” Hamilton told Fortune. “We don’t see other Metaverses as competition, we are all building the next iteration of the internet collaboratively, together and having BAYC building can only be good for everyone!”
Wealth inequality may bleed into the metaverse
Yuga Labs’ metaverse will not be limited to Bored Ape Yacht Club holders alone. It will allow owners of different NFT projects to present themselves within the game as well.
This opens the door to users who don’t own–and maybe couldn’t afford–NFTs from the top collections that Yuga controls. For example, many of the top Bored Ape NFTs have been sold for millions of dollars. Though some Bored Ape holders may have bought in early when prices were cheap, most are unaffordable to the average person.
Because of this, a metaverse where you identify as an expensive NFT may lead to an inequitable environment for those who aren’t able to drop a ton to own a “blue chip” NFT.
NFTs already carry a form of social capital online. Scrolling on Twitter, you’ll likely notice thousands of accounts with hexagonal profile pictures of cartoons and other NFT images.
With certain high-profile collections, like Bored Ape Yacht Club or CryptoPunks, there’s a sort of “flex utility”—or social status—that comes with identifying as one online, according to Gmoney, a notable NFT collector who created his own blockchain-based NFT game called Brick Breaker.
That’s why he spent six figures on his CryptoPunk NFT No. 8219, he tweeted in January 2021.
“With a NFT, by posting it as my avatar on Twitter and Discord, I can quickly ‘flex’ with a picture… It has the same effect as wearing that Rolex in real life, but digitally.”
He’s not alone–many people have bought NFTs for the same reason, and then refuse to sell, regardless of how much they could make, because of what the NFT means to them and their online brand.
This culture will likely bleed into the metaverse as well, Gmoney told Fortune.
“There will be biases that exist in the metaverse based on someone’s avatar, just as there are biases that exist in the real world,” he said.
Like deciding to wear a Rolex out to dinner or posting a picture of it online to impress friends, he thinks people will interact with the metaverse the way they interact in real life.
“Humans will be humans, whether we’re sitting behind a computer screen or speaking to someone face to face,” he said.
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