The Bored Ape Yacht Club is the latest NFT project to become a collector’s item and a ticket into an innovative community. I spoke with some of the Bored Apes owners about the project to find out why it’s so successful.
What is BAYC?
BAYC is a collection of 10,000 Bored Ape NFTs—unique digital collectibles living on the Ethereum blockchain. All ten thousand apes have a different set of the 170 possible traits. Just like the Cryptopunks, the value of the ape is determined by the rarity of the traits it has and by its aesthetic. The NFT project was launched on the BAYC website at the price of 0.08 ETH. For this price, you could buy any randomly generated ape. The company’s objective is not just offer an avatar or a piece of art. According to their website, when you buy a Bored Ape, you are also gaining membership access to a club with several benefits and offerings. Additionally, your NFT will increase in value over time.
There have already been some cool perks Ape owners have benefited from. For example, giveaways of other NFT projects, exclusive merchandise, and the ability to get a bunch of new followers on Twitter. Another thing where the company is working on is being able to get a 3D version of their Bored Ape piece and running it in the virtual game Sandbox or Decentraland. By playing this game, you can make your NFTs come to life and purchase land to build and play on with other ape owners. The BAYC already owns parcels of land and are planning to develop more activities inside the metaverse.
The success story
The hype around NFT projects has never been as big as it was this year. The number of projects that launched NFTs and tried to sell them on a platform like Opensea or Nifty Gateway is increasing every day. Realistically, though, 90% of all NFTs that launched tend to fail. Still, just like with physical art, creators or projects that become popular often see their art skyrocket in value. Cryptopunks are a great example of a success story in the NFT world. With the recent auction of the Covid Alien for $11.75 Million at Sotheby’s, there are clear signs that collectors willing to pay large amounts of money for the right NFT.
The Bored Ape Yacht Club is one of the few projects that have managed to become so well-known in the NFT space. At the moment, the cheapest apes are being sold for around 1.7 to 2 ETH ($4.649,56). The biggest sale the apes have seen so far was for 55 ETH ($ 127.582,95). The owners of the apes think this rise in value is because of the strong community that is behind these digital drawings. “The apes, despite their boringness, really do have a good time. The community is warm and embracing to all members and will always help a fellow ape out” Zeneca an NFT collector that is active in the BAYC community said.
As well, many celebrities have started buying the apes in the recent weeks, which is bringing more attention to the project. Some examples of celebrities are NBA player LaMelo Ball, the president of the NBA Daryl Morey, DJ duo Bassjackers, DJ 3lau and popular Asian actor Kai Ko. These celebrities have fuelled the interest of buyers in the NFTs.
APEJACKERS 🦍 🦧 @BoredApeYC
🎶 Say What U Want pic.twitter.com/Ewq0Ygqflx
— BASSJACKERS (@Bassjackers) June 5, 2021
“Becoming part of a group is important to us”
For centuries, humans have lived in groups and bonded with others. Many of us have probably been active in some type of club, from the Boy Scouts to a football team or perhaps a clan in your favorite online game. Many of our parents were often part of a book club, a golf club, or a cooking club. Others of us connect by finding people with the same hobbies and interests online.
It seems like BAYC wants to offer this social space and connection to its community. By owning an ape you become a member of The Bored Ape Yacht Club and meet other ape owners. By owning your NFT, you become connected to others. But, these apes are now worth thousands of dollars and the avatar has become a status symbol in the ape community. Being part of this club is becoming more and more exclusive. Some ape owners have even said that buying an NFT can be comparable to buying a Rolex.
For many people, spending such a large amount of money on a watch is ridiculous, but for a small group of people, it can be an investment. As well, it is seen as a status symbol that they can show to people on social media. The difference is still that a Rolex is a physical object and has historical value, but there are certainly similarities. Also, the fact that there are only ten thousand unique apes means that the number of members is limited. For now, the club has about four thousand unique members, which is 40% of the supply available. This represents one of the largest number of unique owners of a product in the NFT space. In the future, many of the apes hope that number will grow larger and this will lead to a more diverse community.
Tips and tricks for NFT investing
According to the collectors I spoke with, one of the most important things about investing in NFTs is to make sure you’re buying art you’ll still want to own when the price starts to drop. They all agreed that the NFT market is risky and that it’s hard to know exactly what piece of art will become valuable. That’s why many of the collectors I talked to don’t buy NFTs they wouldn’t own if they became worthless. They also told me that it is important to pay attention to the floor price of an NFT. The floor price is the price of the lowest selling piece in a collection.
According to these owners, it is important for the valuation of a project that the floor price increases over time and that it has a healthy sales volume in the market where it is sold. Some of the collectors also pay attention to the percentage of individual owners, as this indicates whether it is just a small group of people who own it. This is especially true if the art is widely distributed in a much larger community. There are many tools you can use to see this data, as for example Degendata or NonFungible.
If you are planning to buy an NFT, you need to understand its rarity. Rarity is often defined by certain characteristics that generative NFTs have that make them rarer or sometimes less rare. There are many tools you can use to check rarity, such as rarity.tools. Opensea often shows the traits of the NFT along with the percentage of characters that have that characteristic. Sometimes, the price of an NFT is not defined by rarity but by aesthetics. This is why you should look to the community of the NFT you want to buy. By joining Discords or following them on Twitter, you can learn which items are popular.
Investing in NFTs can be really fun. It feels like a treasure hunt and the art often looks good. At the same time, it carries serious financial risks. Many NFT projects fail or end up as cash grabs, and several collectors have fallen victim to this at least once. Just like cryptocurrencies, this is still a very young market, so risk management is important when deciding to invest in digital art.