In this article, we’ll dive into the world of Boring Apes (BAYC), see what they’re all about, and look at on-chain data to see if the hype is real.
NFTs have taken over the world. Extremely expensive pixelated cartoon characters, anime-themed art, and cartoon animals are increasingly becoming the avatars of choice for crypto investors. In this zoo, however, the Bored Ape (BAYC) is the most iconic.
The Bored Ape - Bored Ape Yacht Club (BAYC) - has become the most expensive and most influential NFT collectible line. In addition to having a total market cap of over 1.69 million ETH, the series has managed to gain endorsements from the likes of NBA stars Stephen Curry, Steve Aoiki, and Jimmy Fallon, just to name a few.
How did this collection of cartoon ape JPEGs turn into a multi-billion dollar brand in just over a year? Is BAYC really powerful, or is it just the latest buzzword thrown around by the "community" to gain traction?
In our first installment, Not Just JPEGs, we delve into the world of BAYCs to see what they're all about, and look at on-chain data to see if the hype is real.
"Ape" and "Apeing" have strong cultural significance in cryptocurrency. These words are often used to describe blindly investing in something, usually stocks, cryptocurrencies, and NFTs. As retail interest in investing has increased during the COVID-19 pandemic, so has the use of the term. Spend some time on subreddits like WallStreetBets or Crypto Twitter and you'll see the term pop up in every other thread.
According to an interview with CoinDesk, BAYC founders Gordan Goner and Gargamel imagined a bar where only members of the exclusive club could enter. Apes was the preferred member of this club, and the concept of the Bored Ape Yacht Club (BAYC) was born.
April 23, 2021 is the day BAYC launches. At a price of 0.08 ETH or about $200 at the time, minting was virtually free by today's standards, but it took about a week for the 10,000-NFT collectible series to finally sell out. No hype and no appeal. It wasn’t until a week later that Pranksy, one of the most profitable and prolific NFT collectors (currently outside the top 10 on the Nansen NFT Profitability Leaderboard) started to speak up for the collectible.
The BAYC series is the foundation of the ecosystem that Yuga Labs has built over the past year, but it does not represent the entire ecosystem. After feeling that BYAC alone was too one-dimensional, the Yuga team decided to create a companion collectible: about 2 months after BAYC launched, the Yuga team gave away 10,000 Bored Ape Kennel Club NFTs for free Distributed to holders of BAYC.
A third series, Mutant Ape Yacht Club (MAYC), will follow in August 2021. This time, the total size of the series is 20,000, double that of the previous two series. 10,000 mutated serums were given to 10,000 BAYC holders, which allowed them to create a mutated version of BAYC. The other 10,000 are sold to the public at a minting price of 3 ETH. This time, the collection sold out within an hour, and the team raised a total of $96 million.
Most recently, the team launched a fourth series: Otherside, a series of virtual lands for the upcoming BAYC metaverse. The total size of the series is 200,000 NFTs, of which 100,000 will be launched on April 30, 2022, and the rest will be distributed to NFT holders who contribute to the development of Otherside. Similar to previous collectibles, existing holders of BAYC and MAYC will be able to claim their Otherside NFT at no additional cost. The public can purchase the NFT for 305 ApeCoins.
The launch generated a lot of interest in the cryptocurrency space, with 112 smart currency addresses interacting with it in the sale contract. The Ethereum network gas price flew from 40-70 Gwei the previous day to a peak of 8100 Gwei during the minting period. The surge caused an uproar on Twitter, with many users disappointed by the mismanagement of the release and the quality of the smart contracts deployed. However, Vitalik himself has responded and concluded that optimizing contracts has little impact on gas fees.
In September 2021, world-renowned auction house Sotheby's sold a set of 101 Bored Apes (BAYC) and 101 Kennels (BAKC) for a total of US$26.2 million, more than 30% above the high estimate. In the same month, another well-known auction house, Christie's, also conducted its own BAYC NFT auction. In total, four Boring Apes were auctioned off and sold for a total of approximately $2.8 million.
Source: Sotheby's
Both auction houses are leaders in the art and luxury auction world. Looking for works by Vincent van Gogh, Raphael, Leonardo da Vinci and more? Sotheby's and Christie's are probably places you can buy them. In the eyes of the traditional art world, the presence of BAYC in auction house auctions adds a stamp of legitimacy to such collectibles and NFTs.
A rivalry between BAYC and CryptoPunks has been brewing since its rise to prominence. Over the years, Punks has been known as a preeminent "blue chip" NFT asset due to its long history and dedicated community. Although BAYC's floor price surpassed CryptoPunks' floor price many times, and finally broke through 100 ETH, CryptoPunks' OG status allows the series to maintain its crown in the NFT field.
However, when Yuga Labs acquired the CryptoPunks and Meebits intellectual property from Larva Labs, the debate over which was more influential was finally put to rest. CryptoPunks still maintains its OG status and historical relevance, but as of today, the king of NFTs is unquestionably BAYC.
To understand the success of BAYC and its world, let's dive into the on-chain data provided by Nansen to assess whether the series is really what it appears to be.
Here's a high-level overview of the series:
- Secondary sales over 528,000 ETH (data filtered through wash trading) (as of April 27th)
- The highest trading volume in a single day is 15,415 ETH
- The 30-day average daily trading volume is about 1800 ETH
- ~6200 holders
- 257 Boring Apes have been held since casting
Yuga Labs received a 2.5% royalty on secondary sales and has received approximately 14,100 ETH (approximately $33.8 million) in royalties.
Source: Nansen's NFT God Model
As mentioned earlier, the holders are over 6.2 K. It took about a week for the series to reach 200 unique addresses, but went parabolic from May to July, reaching more than 4,400 unique addresses. About 80% of NFTs have been held for at least 60 days, and about 63% have been held for at least 90 days. This shows that on average 63% of NFTs were purchased for 93 ETH or less. The floor price peaked at 150 ETH in late April and has since dropped to a floor price of around 100 ETH. The average buyer joined the club relatively early, but they are still breaking even or making a small profit during most market downtrends.
Source: Nansen's NFT God Model
In addition to examining the percentage of wallets with decent profits, let's look at the percentage of wallets holding only 1 BAYC NFT and the balance of diamond hands to assess the sustainability of the current floor price.
The proportion of wallets with only 1 BAYC in their wallets is high. In 81% of cases, it was higher than similar collectible lines in the Nansen Blue Chip - 10 Index, such as CloneX (71%), Azuki (76%) and CryptoPunks (72%). This makes holders less likely to sell their Boring Ape, since it is the only BAYC they hold, thus creating a more resilient floor price. Also, there aren’t that many “whale” holders who can liquidate their collections to drive down the price.
In addition, there are currently 5,200 BAYCs that have not been sold by wallets holding these NFTs. While this number is down slightly from the all-time high of nearly 6,000 NFTs, it is one of the few series that is gradually rising.
Source: Nansen's NFT God Model
We can also look at listing activity to understand the psychology of holders.
Only about 6.5% of BAYC are listed, with 0.10% within 15% of the floor price, most listed in the 180 - 360 ETH price range. This suggests that most holders are not thinking of selling, while a small minority are looking for prices well above the current reserve.
Source: Nansen's NFT God Model
Prices are high and only degens seem to buy collectibles at all-time high prices. It's hard to imagine smart money not being profitable at these prices, let alone ape in.
Looking at trends among smart money holders, two things stand out.
- The number of smart NFT early adopters and smart NFT traders is gradually decreasing.
- The number of smart NFT holders and smart NFT buyers is gradually increasing.
Source: Nansen's NFT God Model
Overall, early adopters have started to gradually reduce their holdings, and traders are taking profits and exiting as the price rises. Early adopters may see "financial freedom"-level profits. One of the top wallets on the BAYC Profit Leaderboard is a smart NFT early adopter, which earned a total of 1,404 ETH in profit, a profit margin of 41,326%.
Source: Nansen's NFT God Mode
Traders typically scale up as the price rises, and as BAYC keeps pushing to new highs, it's hard for them to hold onto their positions. However, smart money addresses leaning towards the long-term horizon have been increasing. That suggests they're optimistic about the series' long-term prospects.
Over the past 30 days, we see that smart money is indeed still making purchases, according to the personal transaction dashboard. Some of them even bought at prices well above the 12-hour simple moving average.
BAYC is poised to become a highly influential brand with a cultural reach similar to Supreme but with social signals comparable to high fashion brands such as Gucci and Louis Vuitton (LV). As their ecosystem grows and develops, so does their influence and significance. The launch of ApeCoin, ApeCoin DAO, and virtual land collectibles has further strengthened their position in the Web3 world. More mainstream partnerships like the adidas partnership and a trilogy of BAYC films in the pipeline will help spread BAYC's mindshare among the masses.
With holders being given full commercial rights and control over their NFTs, we could see a future where individual BAYCs become celebrities in their own right. Brands and movies may use a striking image of BAYC or a BAYC with a particular character may appear in their advertisements or movies.
Between these mass media touchstones and the upcoming "Otherside" virtual world, Bored Ape Yacht Club (BAYC) is now pioneering the meaning of culturally significant NFT collectibles.
BAYC has evolved from a simple JPEG NFT into a broader ecosystem that is becoming as culturally influential as brands like Supreme. Their meteoric rise is virtually unheard of and unmatched by both mainstream fashion brands and crypto-based projects alike.
While everything they've achieved so far is impressive, this might just be the beginning of the larger universe they're about to create, to say the least. Holder activity suggests that both degens and smart money are similarly optimistic about the future of BAYC. The team's dream of a world ruled by BAYC might not be far-fetched, and BAYC could become the ruler of the Metaverse.
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