Depending on whom you ask, Bored Ape Yacht Club is either everything that's right or wrong with non-fungible tokens (NFTs). Each of the 10,000 NFT apes in this collection serve as the token holder's digital avatar and provide access to an exclusive online club.
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The success of Bored Ape NFTs can’t be denied. When they launched, they were sold for 0.08 Ethereum (ETH -0.16%) each, worth about $190 at the time. A year later, they were selling for more than 100 ETH (over $300,000), and apes with rare traits were fetching millions.
What exactly is the big deal with this NFT collection? Here's a detailed look at why Bored Ape Yacht Club caught on and where it's going.
Uniqueness
What makes Bored Ape Yacht Club unique?
Bored Ape Yacht Club combines digital collectibles with a members-only online club. Each Bored Ape is a unique digital character generated using more than 170 possible traits, including the ape's clothing, expression, headwear, and more.
A Bored Ape is also a membership card to the online Yacht Club and has members-only benefits. The value of these benefits really depends on how much you're into the concept as a whole.
For example, one benefit is that members can access The Bathroom, which is called a "collaborative art experience for the cryptosphere." This means members can paint a pixel on a digital bathroom wall. It sounds even more laughable when you remember that benefits like these have literally cost people hundreds of thousands of dollars.
A more notable benefit is that NFT holders have full commercialization rights to their Bored Apes. If you own a Bored Ape and you want to use it to sell t-shirts, you can.
Where it came from
Where Bored Ape Yacht Club came from
The story of Bored Ape Yacht Club is a simple one. Four friends decided to "make some dope apes, test [their] skills, and try to build something ridiculous." These four friends went by the pseudonyms:
- Gargamel (later revealed to be Greg Solano)
- Gordon Goner (later revealed to be Wylie Aronow)
- Emperor Tomato Ketchup
- No Sass
The group formed an LLC, Yuga Labs, with Nicole Muniz acting as CEO. They started with a Bored Ape Yacht Club presale on April 23, 2021, followed by the official launch on April 29. The entire collection sold out in less than 12 hours.
How it works
How Bored Ape Yacht Club works
Bored Ape Yacht Club consists of 10,000 unique Bored Ape NFTs. It's built on the Ethereum blockchain, and each ape is stored as an ERC-721 token. The token ID for each ape is assigned to its artwork image. Token holders can check the provenance record of their apes on the Bored Ape Yacht Club website.
These NFTs serve as a digital identity and get you access to members-only areas of the Yacht Club. To access these areas, token holders must be signed into their Metamask NFT wallet where they've stored their Bored Ape.
Connections
Connections
Branding is Bored Ape Yacht Club's bread and butter. It has inked several major partnership agreements and gained significant exposure through celebrity endorsem*nts.
One of the reasons Bored Apes took off in popularity is that they caught on with celebrities. Eminem, Shaquille O'Neal, Mark Cuban, Paris Hilton, and Jimmy Fallon are just a few of the many rich and famous people who have shown off their Bored Apes.
As far as partnerships go, here are some highlights of what Bored Ape Yacht Club has done:
- It collaborated with Adidas (ADDYY 1.12%) for its "Into the Metaverse" NFT collection.
- It has worked with producer Timbaland for a music NFT partnership.
- It has partnered with toy company Superplastic to produce vinyl figurines.
Risks
Unique risks
NFTs in general are highly speculative investments. Most of them don't have much, if any, real-world utility. When selling NFTs, their value is primarily based on their popularity.
Bored Apes are much riskier than the typical NFT simply because they cost as much as a house. Buying one is a massive financial commitment, and all you get out of it is a digital ape.
There are other, more affordable NFT collections from Bored Ape Yacht Club, including Mutant Ape Yacht Club and Bored Ape Kennel Club. "More affordable" is relative, though. They're still selling for $20,000 or more and don't offer any tangible benefits.
Should I invest?
Is Bored Ape Yacht Club a good investment?
Bored Ape Yacht Club definitely isn't a good investment, and it's also not even a realistic investment for most people. The prohibitive cost puts these NFTs out of reach for the average investor.
Even for investors who can afford a Bored Ape NFT, it's never wise to invest in something solely because it's popular or because celebrities are buying it. Popularity fades, especially once a newer product comes along and grabs everyone's attention. Just look at what happened to Dogecoin (DOGE 0.73%) for an example.
The main argument for buying a Bored Ape is that there are only 10,000 of them, and the scarcity will keep increasing the price. If you buy one as an investment, you still need to find someone else willing to pay more than you did. You're effectively relying on the greater fool theory, which is extremely risky.
There's a strong chance that Bored Ape Yacht Club has already peaked in value and popularity. Buying one in hopes of a payday is a huge gamble that probably won't go well.
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How to buy Bored Ape Yacht Club
If you have a few hundred thousand sitting around and you love the idea of owning a Bored Ape, here's how to buy NFTs from this collection:
- Buy Ethereum. You can find it on most of the top crypto exchanges.
- Transfer the Ethereum you purchase to a blockchain wallet. You need it in your wallet so you can use it to buy an NFT.
- Go to the OpenSea NFT marketplace and connect your wallet.
- Browse the Bored Ape Yacht Club collection and choose the one you want.
All Bored Ape NFTs are sold on OpenSea and can only be purchased with Ethereum. There are both auction and buy now listings available.
Bored Ape Yacht Club took over the NFT world in 2021. While there's no denying its success, the wild price speculation has also brought negative attention and made Bored Apes too expensive for most NFT enthusiasts.
Lyle Daly has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.
