As long as there is a tide, there will be a day of ebbing. The time for Yuga Labs to ponder may not be much longer.
(Background:
Bored Ape Yacht Club (BAYC) fell! NFT floor price surpassed by “Pudgy Penguins,” Yuga Labs founder: There is a respectable opponent
)
Table of Contents
“The project team is doing something” is not sarcasm, NFT players are actually very tolerant
“As long as there is a tide, there will be a day of ebbing”
Conclusion
When Yuga Labs announced the acquisition of the Moonbirds development team PROOF, there was almost no doubt about Yuga Labs being the “LVMH of NFTs.” Now, Yuga Labs owns top-tier NFT IPs/projects such as CryptoPunks, BAYC, MAYC, BAKC, “Monkey Land” Otherdeed, Meebits, Moonbirds, etc. These projects occupy 8 seats in the top 15 projects by trading volume on OpenSea’s historical records.
But at the same time, Yuga Labs has also encountered its strongest challenger ever. On February 17th, the floor price of Pudgy Penguins surpassed BAYC for the first time. While Yuga Labs has been advancing through acquisitions in recent years, the appeal of “bored apes” has been diminishing.
Further reading:
Bored Ape Yacht Club (BAYC) fell! NFT floor price surpassed by “Pudgy Penguins,” Yuga Labs founder: There is a respectable opponent
We can’t help but ask, why? Why did Pudgy Penguins gain market favor? Why did the “bored apes” lose their appeal?
“The pump is justice” is a saying widely circulated among NFT players, and it has become one of the bases for criticizing toxic NFT players. There is also a popular saying among Chinese-speaking NFT players, “The project team is doing something,” and everyone half-jokingly says that the project teams that do things are the most feared, as the more they do, the more the NFTs drop.
However, Pudgy Penguins’ success actually proves that many past “doing things” project teams were actually moving themselves or staying in their comfort zones. The so-called “doing things” cannot provide a clear long-term strategy for the project nor bring long-term value to the project.
In the previous bull market of NFTs, every PFP (profile picture) project claimed to be creating an IP. And what happened? What we saw was the release of new series, new tokens, and staking… Most of them stayed in their comfort zones, engaging in activities that were familiar within the Web3 community. In reality, creating an IP is a long-term project, and the teams that start with Web3 are often only good at operating within the NFT or Web3 community. When a project team successfully raises money from dream-chasing retail investors, how many of them spend that money on hiring professional talent for brand building, content creation, social media operations, etc.?
Is the pump justice? Yes, and it can even be said that the rise in floor prices is the biggest source of emotional value for NFT players. Does Pudgy Penguins have market makers manipulating the market? I don’t know, but I believe that most people also think that the answer to this question is “yes.” However, can pumping alone achieve the tremendous success that Pudgy Penguins has achieved?
No, such success requires the combined recognition of potential market makers and retail investors. Pudgy Penguins’ logical approach to IP development is reasonable. They have created a matching brand view for their cute and affable image. They have chosen toys as a breakthrough point based on the characteristics of their image, and they have achieved good results. These efforts, combined with the rise in floor prices, have not only solidified their community but also formed new value recognition among the NFT player community:
“A well-executed NFT project can really rise.”
Whether the narrative has logic depends on whether the market recognizes it. So we can also see that Doodles, which was heavily criticized before, has also risen nearly 70% in the past month. Is there any good news? No, the recent news is about a collaboration with G-SHOCK for a limited edition watch, but Doodles has been “doing things” all along.
Cool Cats have also started “making toys,” so in the past month, Cool Cats has achieved a similar increase as Doodles.
On the road to creating an IP, Pudgy Penguins can only be said to have had a good start, but it has already achieved astonishing performance in the NFT market. NFT players are actually very tolerant and not toxic at all.
Pudgy Penguins surpassing BAYC’s floor price is seen by many players as a historic moment. In fact, many NFT players are not surprised and have their own perspectives to explain why they believe this historic moment is “inevitable.” But for me, the answer to this question is actually simple:
Does BAYC, or rather Yuga Labs, still remember where they came from? I’m not saying that they have forgotten that they are an NFT project, but have they forgotten the excitement of doing something cool when they were creating BAYC? Have they forgotten their idealism?
Let’s make a NFT, everything stems from the words of Greg Solano, one of the co-founders of Yuga Labs:
“Wandering in a secret club in the swamp, exclusive to apes. Doodling on the collaborative pixel board on the club’s bathroom wall.” This kind of vibe attracted me, who couldn’t afford BAYC at the time, and I tried my best to observe the BAYC community and feel the atmosphere of a drunken pub filled with idealists.
The vibe of the past, the unity of the past, the community communication and collective decision-making, when did they disappear? The slogan “Apes together strong” seems to be becoming more and more hollow, with the community watching Yuga Labs sprinting forward on the acquisition path and releasing small games accompanied by new assets (Otherside was cool, but what happened afterwards…). In terms of business, Yuga Labs has been expanding, but what seems to be left for the community is confusion and loss.
Whether it’s creating an IP or creating a game, these are new stories planned for NFTs after the rapid and drastic value inflation in the first round. Although NFT players have developed immunity to these new stories and even sneer at them, it is not shameful — just like stocks, sometimes you can think of a company as telling a story -> delivering -> telling a new story, and what can be delivered is called value, and what can’t be delivered is called a bubble. Secondly, at that time, everyone genuinely felt excited about the infinite possibilities of these NFTs and marveled at being on the wave of a new era—
According to Pudgy Penguins CEO Luca Netz’s “NFT Value Accumulation Funnel” theory, with 8,888 Pudgy Penguins, assuming they can have 3 million loyal fans, they can be absorbed with just a 0.3% conversion rate. However, NFTs are not securities, and no matter how high the profits from operating physical businesses, it is difficult for NFTs to directly distribute dividends to holders under current regulations. Therefore, this fan conversion into consumption of NFT “collectibles” still relies on being “cool.”
“NFT Value Accumulation Funnel” theory
If BAYC wasn’t “cool” from the beginning, it wouldn’t have attracted a group of loyal supporters. Who would want to lift up a project full of paper hands? Forgetting about being “cool” is actually abandoning the community and forgetting the initial intentions.
As “Whale of NFT” @jivacore, also known as Guan Lao Shi, said, “Yuga Labs is like Supreme, no longer cool, as long as there is a tide, there will be a day of ebbing.”
Among the voices of the BAYC community, what struck me the most was not the confusion or criticism from the big V’s regarding Yuga Labs’ recent acquisition, but the words of @votefloridaman:
“The motto ‘Degen Only’ has gone with the wind.”
We are about to overcome the winter of NFTs and even the entire crypto market. As someone who has been persistently working in the NFT field, I have only one reason to continue:
NFTs are really cool and fun, and we don’t lack good projects, but we lack good teams.
How to do it actually depends on how we think. Losing that excitement, what’s the difference between a big NFT project and a picture-only “shitcoin” with a large market cap that is slowly declining if the project has forgotten about the initial spark?
There will definitely be another bull market for NFTs, and it will definitely be the most attractive crypto asset for young people. For series like BAYC with high floor prices, people like me, who belong to the vast majority of ordinary NFT players, cannot afford them. So how can we attract the remaining 10% of players who have the purchasing power?
The time for Yuga Labs to ponder may not be much longer. This will be a race against the bull market.
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