Yuga Labs' Ape Metaverse Ambition: A Marvel Universe for the Web3 Generation

Author: Richard Lee, Chain Catcher Editor: Gong Quanyu, Chain Catcher

Acquiring CryptoPunks first, followed by launching tokens, airdrops, and warming up the game, Yuga Labs, the developer of BAYC (Bored Ape Yacht Club), has recently created quite a momentum.

"Yuga," this awkward name, comes from a wizard in the game "The Legend of Zelda" who can turn himself and others into 2D artworks. The founders of BAYC chose it as the name for their studio, symbolizing the team's extraordinary creativity.

On March 12, the news of Yuga Labs acquiring the CryptoPunks and Meebits IP series instantly ignited the NFT circle. The convergence of two major blue-chip IPs into one can be said to have made Yuga Labs famous overnight.

What is even more noteworthy is the reason why CryptoPunks developer Larva Labs was willing to sell. Larva Labs stated in the acquisition announcement that compared to itself, Yuga Labs is better at operating and developing PFP (Profile Pics) projects and their community ecosystems. This judgment aligns with the impressions of industry insiders regarding the operational status of the two projects.

The acquisition of star NFT IPs like CryptoPunks and Meebits is just a glimpse of Yuga Labs' business operation capabilities. As PFP NFT gameplay becomes widely known, Yuga Labs is extending its operational capabilities surrounding the brand even further—on March 12, Yuga Labs introduced in a joint announcement that it is building a Universe, with BAYC as the center of this universe. Promotional materials obtained by The Block show that Yuga is launching a game-centered metaverse called "MetaRPG" to expand the BAYC world and invite those who do not own ape avatars to join.

ApeCoin will be the currency of this ape metaverse's economic system. On the daytime of March 17, before ApeCoin was officially launched, it had already gathered strong momentum in the secondary market. After going live that evening, ApeCoin's price surged to a high of $18, and as of the time of writing, its price is $13.2, with a diluted market cap reaching $13.2 billion.

Although the "ape universe" of "MetaRPG" is still in the early stages of construction, on the day ApeCoin was launched, ApeCoin DAO board member and blockchain game developer and investor Animoca Brands announced that it would transition its action-adventure mobile game Benji Bananas to a P2E model, allowing players to exchange earned tokens for ApeCoin; Animoca's subsidiary nWay also announced that it would use ApeCoin as the economic system currency in a new game developed in collaboration with BAYC.

nWay released a teaser image for the P2E game

Additionally, on March 11, BAYC and Animoca released an invitation for internal testing of a new mysterious project. According to BAYC, this mysterious project began construction last August and has been in development for seven months, with Animoca initiating the first phase. According to the user registration page, internal testing requires submitting identity information for KYC. From the perspective of official announcement strength, development cycle, and participation threshold, this will be a major highlight in Yuga's "ape universe." According to speculation reported by The Block, this may be a virtual land sale that Yuga Labs is about to launch, although this speculation has not been officially confirmed.

On March 17, the ape metaverse seemed to "rise from the ground" in a day; in fact, the founders of Yuga Labs had a very low-key vision and ambition from the very beginning.

I. Anonymous Founders and the Birth of BAYC

Two literary youths in their early twenties, Gordon Goner and Gargamel, who grew up in Miami, had not written any serious works. They began to make a fortune through cryptocurrency in 2017, but then "lost everything" due to leverage, so they started to think about doing something within their capabilities in this circle. Inspired by the works of predecessors on the eve of NFT summer in early 2021, they contacted two engineer friends, and the four of them together created an NFT project themed around apes, which unexpectedly became a huge success.

This is the "one-sentence story" as narrated by the four co-founders of Yuga Labs.

Gargamel, Gordon, Tomato, and Sass were their codenames in the crypto space before February this year. Earlier this year, they were revealed to the world by a BuzzFeed article, which many in the crypto circle criticized for disrespecting privacy. Despite their preference for anonymity, they do not shy away from discussing themselves. In a Coindesk article from last September, Gargamel talked about many personal stories of himself and Gordon Goner:

Greg Solano, alias "Gargamel," worked as an editor and book reviewer on some literary websites, graduated from the University of Virginia, and holds an MFA (Master of Fine Arts) degree. He co-authored a book about World of Warcraft with a game designer.

Wylie Aronow, known as "Gordon Goner," lived in Chicago for a while and participated in an MFA creative writing program but dropped out due to health issues. He later became a part-time high-frequency trader in cryptocurrency.

When talking about the inspiration for BAYC, they always mention their upbringing and literary interests. They grew up in the hot southern United States, enjoyed drinking beer, and met through friends of friends in Miami's "dirty bars." They both admired the works of writers like Hemingway, David Foster Wallace, and philosopher Wittgenstein.

The inspiration for BAYC consists of two parts. According to Yuga Labs, the crypto community likes to refer to themselves as apes, so what would these apes do? The image of a lazy, carefree, and free subculture space reminiscent of Miami's "dirty bars" lingered in their minds. They imagined the ultimately wealthy yet bored apes hosting parties in a secret club in the swamp, doodling in the bathroom.

Gordon Goner and Gargamel set the initial story tone for the NFT: apes, financial freedom, an existential crisis of boredom, and debauchery.

Then, the main designer of BAYC, Seneca, enriched the image of the apes: half-closed, world-weary eyes, vivid outlines and colors, primitive bodies, and strangely exquisite outfits.

Seneca's illustrator friend described Seneca's style in an interview with Rolling Stone as "pop surrealism"—a combination of personal and pop elements, using organic, flowing, dreamlike shapes and surreal color schemes, making the work appealing to a broad audience due to its popularity while also resonating with the personal emotions of anyone who sees themselves in the NFT.

Gargamel said that from Seneca's ape art design, they saw the kind of "emotion" they wanted (referring to a sense of existential boredom). "I can feel a complete emotion being conveyed," Gargamel said.

II. Practical Operators Balancing Community Management and Business Operations

In early February, according to a Financial Times report, Yuga Labs was seeking a round of financing with a valuation of $5 billion, negotiating with well-known venture capital firms including a16z. According to promotional materials obtained by The Block, Yuga Labs was pitching its comprehensive metaverse plan to investors, including two virtual land sales in March and August, a virtual world game called "MetaRPG," an in-game app store, and ApeCoin.

According to reports, Yuga Labs will sell these virtual lands in the form of NFTs, with different plots connected to different storylines in "MetaRPG" (which may contain different natural resources, artifacts, and rare characters, etc.). A total of 200,000 plots will be sold in two phases in March and August, with Yuga expecting to profit $178 million from this. Yuga will also reserve a portion of the land for itself.

"We want to build something to expand the world of BAYC while also inviting a larger NFT community (as well as those excluded from BAYC membership) to join," Yuga Labs explained the significance of this strategy.

Through land sales, combined with plans to launch blockchain games with Animoca and other announced blockchain games adopting ApeCoin, the prototype of Yuga Labs' ape metaverse has already taken shape. Thus, Yuga Labs can further release and expand its accumulated community operation capabilities and business operation capabilities, closely uniting the NFT community around itself and exploring more possibilities and values of NFTs.

In fact, whether it was the initial design of NFTs that had a full imagination of "community" (referring to "club") or during the community brand operation period of BAYC, Yuga Labs may be the most aware and ambitious in the crypto space, with the ability to realize bold visions.

On one hand, the inspirational co-creators and co-founders of BAYC, Gordon Goner and Gargamel, based on their self-revealed descriptions and experiences, are deeply immersed in the world of fantasy, possessing abundant vision and imagination. Setting aside the medium, making games and writing novels are essentially the same, as the core lies in creating a "universe."

On the other hand, Yuga Labs may be one of the few project teams in the crypto circle that speaks less and does more, with a professional style and a high level of compliance awareness, making it the "Coinbase of NFTs."

In the NFT frenzy that began in the spring of 2021, facing the "founding elder" status of CryptoPunks, BAYC, as a latecomer, NFTGo data shows that as the crypto market entered a dormant period, the average price of the CryptoPunks series dropped by 61.40%, while BAYC's valuation remained largely unaffected by the market's overall trend. As of March 15, the average price of the series had increased by 88% compared to three months ago, and following the recent launch of ApeCoin, BAYC's trading volume surged 16 times within 24 hours, indicating remarkable market enthusiasm.

The widely known reason behind this is Yuga Labs' clear and comprehensive IP business operation capabilities. Compared to Larva Labs' insistence on the authenticity of CryptoPunks IP and the ambiguous IP commercial rights after NFT sales, Yuga Labs has clearly granted every BAYC holder complete IP commercial usage rights from the very beginning. This move, in a virtual sense, aligns with the so-called Web3 emphasis on "ownership" and "co-creation," and in practical terms, Yuga Labs is leveraging the potential for personal recreation and dissemination of each holder to empower the BAYC brand.

In December last year, 33 BAYC holders collaborated with a Taiwanese e-commerce group to launch 3D figurines, fashionable clothing, and other peripherals. In music, there is already the Ape music group (Ape In Productions/Timbaland) brand, and "10KTF" focuses on digital clothing retail related to BAYC IP.

A document related to Yuga Labs obtained by Chain Catcher shows that Yuga Labs places great importance on the UGC (User Generated Content) model, stating, "BAYC vigorously utilizes this movement to develop the community."

According to observations from NFT Labs, there indeed exists a connection among BAYC buyers that can be referred to as a "community." The article quotes a user's comment that everyone in BAYC connects with each other and follows each other, creating a trend of "Ape follow Ape."

Yuga's proactive operational capabilities are also exceptionally professional. Browsing BAYC's Twitter, one can find that since the beginning of the BAYC presale, Yuga Labs has emphasized the "sense of membership belonging" for NFT holders and has actively created physical brand peripherals (such as caps, T-shirts, etc.) to cultivate the IP and community atmosphere.

During the presale period of BAYC in April 2021, physical member peripherals were sold

This kind of operation is not limited to online activities. From October 31 to November 6 last year, Yuga Labs held the first major offline gathering primarily for BAYC members in Manhattan, New York—APE FEST. During the day, they held serious discussions on themes like "Fintech and NFTs: Risks and Regulations," and at night, they hosted a fantastical and tech-themed party on a real yacht on the Hudson River.

Compared to the loose connections of online Discord chat group members, there is no doubt that Yuga Labs understands that what truly builds a "community" and captures users' minds is genuine face-to-face communication and experiences. These are the "secrets to success" that Yuga Labs' anonymous founders rarely discuss.

III. Will the Ape Metaverse Become the Marvel Universe of the Web3 Generation?

According to the aforementioned investment invitation letter, Yuga Labs plans to seek $400 million in financing from a16z and Sound Ventures with a valuation of $5 billion. In their self-introduction, Yuga Labs positions the world of BAYC as the Marvel Universe of the Web3 generation. Can we expect the future of the ape metaverse in this way?

We still need to analyze from the initial cultural positioning of BAYC. The BAYC apes are wealthy and thus bored; essentially, BAYC and its ape metaverse are more likely to attract "elites" in the modern context, aligning with the monetary and speculative frenzy temperament of the crypto community. From this characteristic alone, it is expected to enjoy a broad audience both within and outside the crypto circle.

On the other hand, the ape metaverse is also constrained by this very characteristic and its operational methods. IPs like Marvel, DC, and Disney became popular worldwide because they were free and open at the beginning of their commercial operations, while BAYC emphasized a strict "membership system" from the very start, with high purchasing costs to enter its community (as of March 18, the floor price of BAYC on Opensea had reached 92.7 ETH, approximately $259,000). It can be said that the world of the ape metaverse is "noble" yet closed.

Furthermore, the image of wealthy elites is not necessarily the most prevalent cultural temperament within the crypto community. On the contrary, the crypto circle has attracted nerds with specialized skills, tech enthusiasts, and other niche subcultural communities. The rise of the alternative NFT project mfers reflects a "proletarian" attitude of lying flat and rebellion in the context of postmodernism.

Nevertheless, due to the successful operation of the IP and the professional capabilities of the founding team, the ape metaverse centered around BAYC remains one of the most anticipated metaverses in the crypto bear market.