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This article will sort out and analyze how Yuga Labs became the community leader step by step in the fierce battle through on-site observation and communication with Yuga Labs at the Consensus Conference in the United States.

Written by: Peng Ziying, OKEx

Earlier, Yuga Labs, the strongest IP creator in the NFT field, officially announced that it would launch the NFT series “TwelveFold” on the Bitcoin blockchain based on the Ordinal protocol, adding a catalyst to the Bitcoin NFT ecosystem. So has Ethereum fallen out of favor? In fact, according to data from the OKLink multi-chain browser, after the BTC mining fee income hit a nearly five-year high of 683.36 BTC (about 19.08 million US dollars) on May 8, it is clear that BRC20 is not only hot, but the congestion on the chain should not be underestimated. So how to build a strong community ecosystem? In addition to technology, this article will sort out and analyze how Yuga Labs has become the community overlord step by step in the fierce battle through observation and communication with Yuga Labs at the Consensus Conference in the United States.

It is undeniable that traditional technology giants have lost everything in the gamble of “next generation Internet”, and the rise of cryptocurrency ecosystem is leading the change of this era. Compared with the relatively immature BRC20, Ethereum has unparalleled advantages, and Yuga Labs is one of the most outstanding representatives in the Ethereum ecosystem. As its new CEO Daniel Alegre said at the Consensus2023 conference: “We are not a game company, but a content and community company.” Its forward-looking religious thinking has rapidly risen in the fields of games, NFTs and the metaverse, becoming the uncrowned king.

Data don’t lie. Let’s first take a look at Yuga Labs’ recent achievements

Yuga Labs’ 16 NFT collections account for 34.6% of the entire NFT industry, with a total trading volume of $2 billion in the past two quarters.

Bored Ape Yacht Club, Yuga Labs’ first NFT series consisting of 10,000 bored apes launched in 2021, has the highest floor price (the lowest market price in the NFT series) in the NFT industry, with a price of US$96,000, followed by CryptoPunks at US$92,000.

Otherdeed for Otherside (Otherside is a metaverse game world that brings together various NFT projects; Otherdeed is a brand new NFT designed for the game, which is a certificate for some kind of virtual land) is the best performing metaverse NFT collection, with a trading volume of US$322 million and an average sales price of US$3,112 in the past two quarters.

The total transaction volume of $APE (ApeCoin, also known as Ape Coin, a governance and utility token serving the Bored Ape community and related communities) has exceeded 1 million ETH, with a market value of US$1.68 billion, making it the leading metaverse game token.

However, behind these dazzling data, there are two inconspicuous “little” people.

Bored Ape created by two “bored” people

The original founders of Yuga Labs were Wylie Aronow, a long-term patient, and Greg Solano, an unknown writer. At that time, they had literary ambitions but nowhere to display them. The beginning of their “ape” split originated from a text message: “Hey, let’s make an NFT together.” The source of the idea of Bored Ape is an imagination about financial freedom. The two conceived a club and decided to use a unique group of people in the currency circle as the protagonists of NFTs. Because of brainless investment, they became rich (to Ape in) and became people with both money and time overnight. Most of them are expressionless, wearing various hats and sunglasses, wearing fancy coats, some holding cigars, and some biting pizza. Their entertainment activity is to graffiti on the walls of the club’s bathroom. Correspondingly, the holders of these NFTs in the real world can enter the virtual creative space BAYC bathroom, where they can create digital works and write and draw on the walls. After these collisions of ideas and concepts, Bored Ape was born. The two founders then hired five artists to design ape features and added algorithms to generate 10,000 NFTs.

To this day, Yuga Labs is still expanding its empire step by step. As written in their Pitch Deck (financing brief): “BAYC is just the beginning, we are building the next frontier”

The popularity of Bored Ape is not a fluke. As the founder of CryptoPunk said to the media after the acquisition: “We are good at creating technology in the early stages, and we are not good at community management and maintaining public relations. Yuga Labs is an innovator of avatar NFTs, and they are better at project operations.” The following will analyze how Yuga Labs has moved step by step from Web3 to Web2 and finally to the traditional world from three aspects: unique business methods, strong community marketing, and concept consensus building.

The business method of “letting some people get rich first”

In addition to the huge profits made by Yuga Labs itself, they also generously gave profits to those who hold Bored Ape. They implemented the airdrop plan from beginning to end, and the core team repeatedly emphasized the idea of unity of knowledge and action and win-win with the community at all the venues of the consensus conference. According to the highest unit price record of OpenSea, Bored Ape NFT holders can receive airdrop rewards worth up to 280,000 US dollars. They first launched 10,000 Bored Ape “pet companion” NFTs - Bored Ape Kennel Club (BAKC), which were distributed free of charge to BAYC holders. As the popularity continued to rise, the price of this dog once exceeded that of the monkey, and the current floor price remains at 52ETH.

Subsequently, derivative products continued to be launched - Mutant Ape Yacht Club (MAYC). This batch of NFTs is the “gene mutation version” of the first version of Bored Ape. The team airdropped “serum” with mutant genes to BAYC holders, which are divided into three levels from low to high: M1, M2, and M3. Different levels of serum determine the characteristics and degree of the original Bored Ape’s gene mutation. If you get M3, it means that you can get a very rare and unique mutant ape, and the market price is also higher. Among them, the Mutant Serum NFT was sold at a sky-high price of 888ETH.

The subsequent tokens $APE and the metaverse game world Otherside, which brings together various NFT projects, also reserved a place for BAYC/MAYC NFT holders when they were announced. Recently, in their latest game, Otherdeed land holders can claim a ship - Vessel. The scheduled claim time is in early April. Each Vessel is a separate ERC-721 NFT, which will be airdropped to the wallet of Otherdeed holders after claiming.

Compared with the simple sales model of many NFT projects, Yuga Labs pursues a win-win situation. It regards NFT as an empowerment movement, allowing users to enjoy dividends continuously and forming an alternative wealth effect. As their new CEO Daniel Alegre said at the Consensus2023 conference: “What we want to do is not to make money from users, but to make money together.”

What’s mine is yours, and what’s yours is still yours

If “empowerment” is the key to the value of NFT, then “sharing” is the gene of Yuga Labs.

Yuga Labs has created its own commercial monetization model, which is also the uniqueness of BAYC from other NFTs, a wealth code that has been proven to be feasible. An alternative cooperation model that divides its intellectual property rights and disperses the intellectual property IP, and this De-Collab (decentralized collaboration model) was also emphasized many times by the core team at the 2023 Consensus Conference. BAYC grants its NFT buyers a wide range of rights, and they can use BAYC for any commercial purpose without having to worry about rights protection. This license grant is unlimited, and users can copy to create derivative works based on BAYC artworks. After buying CryptoPunks and Meebits from Larva Labs, Yuga Labs immediately returned the commercial rights to the holders. This is unprecedented for traditional licensing.

From now on, consumers are not just consumers, but also participants, owners and entrepreneurs.

A large number of extension works were soon born. Clothes, toys, watches, and even food, covering multiple fields including entertainment, music, fashion, games, and virtual worlds. The team also funded entrepreneurs who used the monkey IP, encouraging them to unleash their creativity and expand the brand’s influence. This bottom-up approach allows everyone who uses the monkey image to make their own commercial products to participate in Yuga’s brand building. A group of community members are empowering this community and brand in various ways, just like a community version of Supreme, creating their own culture.

According to Bitpush News, Yuga Labs’ IP ecosystem is growing rapidly: the number has increased from 80 in August 2022 to 200+ now.

Image source: Bitpush News

As founder Wylie Aronow (Gordon Goner) said: “Anything people create with apes will only make the brand grow.” Indeed, Bored Ape is undoubtedly the only winner who has mastered this unique marketing model and made it big. Behind its successful rise, it is rooted in people’s love for its brand culture and community recognition. This high degree of consensus and value recognition is the key.

Hold Bored Ape, you are the boss

Just like Rolex and Ferrari, BAYC has developed into a status symbol in the Web3 world. Whether or not you own or are able to own BAYC seems to have become a standard for identifying financial strength in the industry. With the rising price of Bored Ape in the secondary market, if your Twitter avatar is an NFT of Bored Ape, then your sense of pride is no less than driving a Maybach on the street.

The rapid development of BAYC is inseparable from the role of the community. Since its release, it has grown rapidly into a huge community in a short period of time. For players who hold BAYC, it is not only a collectible, but also a club. BAYC has become a trend representative for crypto enthusiasts who believe in this field and see many applications of this technology in industries such as art, music, games and entertainment. This belief makes people willing to join a community with the same values. At the same time, it satisfies the sense of belonging in the hearts of users. The story background of BAYC stems from the voices of many NFT collectors: in the crypto market, investors have realized the dream of wealth freedom through NFT.

At the same time, they also pulled the consensus of BAYC’s concept from online to offline, and from Web3 to traditional. Yuga Labs held many offline events, which only the holders of Bored Ape could participate in. This was undoubtedly a party that showed status and was also a crypto elite circle. Many bigwigs were members of this club, which greatly improved the value of Bored Ape. Yuga Labs successively held interactive treasure hunts, offline Ape FEST, BAYC x MAYC mobile game competitions, and so on.

Ape FEST, Bored Ape Party, Image source: NFT Evening

Of course, the key to BAYC’s continued popularity is the participation of celebrities, such as singer Justin Bieber, tennis star Serena Williams, former NBA player O’Neal, etc. With the support of a number of celebrities, the name BAYC has never faded from people’s sight, and has further broken through the user circle.

Final Thoughts

In general, whether it is at the consensus conference or in the author’s case analysis this time, the core of Yuga Labs is to give people a vision of “common prosperity” and constantly use “empowerment” and “sharing” to achieve it, from their historical stories to business models to consensus building, from BAYC, BAKC and MAYC’s NF, to the token $APE, and then to the metaverse Otherside, they are constantly enhancing their IP energy. The core is to give users a sufficiently attractive story, so that users can use their own brains to think about where this story should go and what contributions they should make along the way.

The new gameplay they created can not only become a guide for the crypto community, but also provide inspiration for traditional businesses. Compared with the usual reliance on the sale of products or services, Yuga Labs’ business model focuses more on creating and maintaining IP, as well as interaction and cooperation with the community. This kind of community-based collaboration and co-creation is something that traditional businesses can learn from, and it has prompted them to think about how to discover new business value in the context of decentralized intellectual property rights and co-creation of an ecosystem.

The success of Yuga Labs is inseparable from the strong foundation of Ethereum. As an advanced ecosystem, the Ethereum NFT community has more mature and efficient tools and solutions for minting, trading, storing and displaying NFTs, providing more inspiration for every step of Yuga Labs. At the same time, there are many active developer communities in the Ethereum ecosystem, which have made important contributions to the development of the entire ecosystem. In contrast, BRC20 is still in its infancy, but only by standing on the shoulders of giants can we see further. Now is a great opportunity to follow the footsteps of Ethereum to discover more opportunities and development space in its ecosystem.

In a race full of competition, can Yuga Labs stand out and become a dark horse? And can BRC20 catch up and gain a foothold in this competition? Let’s wait and see.