Last week, I wrote an article on ApeCoin, the new cryptocurrency launched to be “the primary token for all new products and services” from the Bored Ape Yacht Club (BAYC). I won’t go over previously covered ground, but to summarise it quickly, ApeCoin is an ERC-20 governance token; the thesis is that holders can vote on potential changes to Bored Ape Yacht Club, in addition to gaining access to exclusive events and merchandise, as well as use it for in-game currency.
After a bit of a volatile start (who would have guessed?) the coin has gone vertical, with a market cap of $3.7 billion at time of writing. BAYC have yet again proved that everything they touch turns to gold (although Bitcoin diehards may not like the choice of words in that expression).
$450 million raise
Yuga Labs, the creator behind BAYC, followed up the ApeCoin launch by this week announcing that they had raised $450 million funding – equating to a valuation of $4 billion. The plan is to build out its own metaverse, titled Otherside. They also recently bought the intellectual property rights to two of the biggest rival NFTs: Cryptopunks and Meebits. As Cardi B would say, they’re making money moves.
By all accounts, BAYC are building a juggernaut here. What has separated these cartoon apes from the thousands of run-of-the-mill NFT projects is the focus on community. If you own an Ape, you don’t merely hold a piece of art. The NFT serves as a ticket to events (including exclusive Miami Yacht parties plastered all over social media), merchandise, airdrops, social gatherings and countless other perks. Exclusivity and scarcity breed demand when marketed correctly – like Kanye West releasing only a certain number of his Yeezy shoes, to use a real-world example. And when you leverage the power of celebrities to advertise it (Eminem, Snoop Dogg, Serena Williams, Steph Curry to name just a few), the sky really is the limit.
Consolidation of Wealth
But it all makes me a little uncomfortable, for a couple of reasons.
In the airdrop of the tokens last week, each holder of a Bored Ape received 10,094 ApeCoin tokens. At current prices, that equates to mouth-watering $134,000 simply appearing in holders’ wallets, without having to do anything. And, recall that there are only 10,000 of these Apes and the floor price is currently 103 ETH, or $313,000. So, this is a small collection of already-very-very-rich people getting much, much richer.
Floor price of BAYC since inception,…