Title: Yuga Labs: From Nothing to The Disney of Web3 in 2 Years

Author: Dappradar

Compiled by: Baize Research Institute

As the second anniversary of the Bored Ape Yacht Club (BAYC) approaches, now is a great time to reflect on Yuga Labs' incredible journey and its impact on the NFT and DApp world. In the fast-changing NFT industry, projects that consistently bring value to the community are the ones that stand the test of time and withstand market fluctuations. While some NFT projects have abandoned development or gone back on their promises to holders, or have simply failed to reach expected heights, Yuga Labs has emerged as a leading project dedicated to providing value and helping its NFT holder community thrive.

In this report, we will delve into the Yuga Labs ecosystem and analyze the reasons behind its sustained success.

1. Yuga Labs: A Pillar of the NFT Industry's Rise

Yuga Labs has become one of the most influential and successful companies in the NFT ecosystem. Its flagship NFT project, Bored Ape Yacht Club (BAYC), holds the record for the highest-grossing NFT project globally, with a total trading volume of $2.88 billion.

Founded in February 2021 and registered in Delaware, USA, Yuga Labs has experienced rapid expansion over the past two years—acquiring the two most valuable NFT projects on the market, CryptoPunks and Meebits; and is currently developing its own gaming metaverse, Otherside.

Currently, Yuga Labs' 16 NFT projects account for 34.6% of the entire NFT market, achieving a total trading volume of $2 billion in just the past two quarters. The company's success can be attributed to its commitment to integrating art, identity, ownership, utility, interoperability, and culture to advance the NFT industry.

BAYC initially started as a collaborative art initiative, allowing the community to co-develop and evolve a concept. Today, BAYC is valued at billions of dollars, with many celebrities among its holders, including Snoop Dogg, Logan Paul, and Justin Bieber.

On June 18, 2021, Yuga Labs launched a derivative series for BAYC, the Bored Ape Kennel Club (BAKC), followed by the Mutant Ape Yacht Club (MAYC) on August 28, 2021. Holders of BAYC were able to obtain these NFTs for free. Both NFT series quickly gained high demand in the secondary market, attracting many celebrity buyers.

Fast forward to March 2022, Yuga Labs raised $450 million in a funding round, reaching a valuation of $4 billion. This round was led by venture capital giant Andreessen Horowitz (a16z), which has also funded many Web3 giants to help them launch, such as Dapper Labs, Coinbase, and OpenSea. Other notable investors include Coinbase, Animoca Brands, Samsung, and Google Ventures.

While BAYC, BAKC, and MAYC represent "art monetization" in the NFT industry, Yuga Labs continues to empower NFTs by creating exclusive benefits for the community, such as allowing BAYC holders to purchase exclusive merchandise, using BAYC mutant serum to mint MAYC, APE FEST tickets, and airdropping ApeCoin.

Yuga Labs is unwavering in its commitment to providing users with unique and valuable experiences, thereby solidifying its leadership position in the NFT ecosystem.

Yuga Labs has successfully built a robust ecosystem that continuously provides benefits and financial returns to its users, and this momentum shows no signs of slowing down.

2. A Deep Dive into the BAYC NFT Ecosystem

From BAYC to Otherdeed Expanded, Yuga Labs continuously launches innovative NFT projects that are eagerly anticipated by collectors and investors.

BAYC was launched in April 2021 as Yuga Labs' first project and has since become one of the most sought-after NFT series on the market. It boasts the third-highest total trading volume in history—$2.88 billion—trailing only Axie Infinity and CryptoPunks.

Yuga Labs has also successfully created a unique ecosystem for BAYC, containing interconnected NFT series that offer high utility to BAYC holders. For example, owning a BAYC NFT allows holders to receive a BAKC NFT. The floor price of BAKC has increased by 874% since its launch.

In the past two quarters, BAYC has maintained the highest trading volume among all NFT projects, with an average sale price of $100,675. Traders of this NFT average 3.52 transactions.

MAYC had the second-highest trading volume in the past two quarters, with an average sale price of $22,495. Traders of this NFT average 5.72 transactions.

BAKC ranked eighth in trading volume over the past two quarters, with an average sale price of $11,184. Traders of this NFT average 7.50 transactions.

However, Yuga Labs' ecosystem is not limited to collectibles.

3. The Whales of BAYC

As BAYC grows in popularity, it is crucial to understand the ownership distribution among holders to gauge the risk of price manipulation.

The percentage of unique holders of BAYC is 56%, indicating a lower risk of collusion among holders. The whale concentration is only 4.59%, suggesting that the likelihood of large holders manipulating prices is relatively low compared to other NFT series.

Among the top holders, the largest whale holds 2.2% of BAYC (222 BAYC) and 1.45% of MAYC. The second-largest whale holds 86 BAYC, 88 BAKC, and 32 MAYC.

Notably, the smart contract of the NFT lending platform BenDAO holds 379 BAYC, reflecting traders' use of BAYC for lending, leading DeFi use cases in the NFT industry. This development further enriches BAYC and showcases its adaptability to the evolving NFT industry. As the BAYC community continues to grow and innovate, it remains a model of potential in the NFT industry.

4. Exploring Yuga Labs' Gaming Ecosystem: From Dookey Dash to Legends of the Mara

The gaming ecosystem created by Yuga Labs has garnered significant attention.

With the upcoming launch of the metaverse platform Otherside, Yuga Labs seeks to create a unique gaming experience for its users. For instance, they hope to connect Otherside with the broader NFT industry and turn various NFTs into playable characters. Holders of other leading NFT projects (such as Cool Cats, World of Women, and RENGA) will have the opportunity to embody the avatars represented by their NFTs in The Otherside.

The first test of Otherside took place in July 2022, with over 4,600 players participating. A second trial run occurred on March 25, 2023, with around 7,200 players involved.

On March 28, Yuga Labs released Legends of the Mara, a 2D strategy game. In the game, players can learn about Kodas, their origins, and their relationship with Otherside. To play Legends of the Mara, players need at least one Otherdeed, one Koda, and possibly an apprentice Mara. Each Otherdeed holder can claim a Vessel NFT, which has different functionalities such as hunting, farming, and enchanting.

Since its launch, the total trading volume of Otherside Vessels has reached $6.32 million, while the total trading volume of Otherside Koda has reached $6.77 million.

Moreover, Yuga Labs is not solely focused on the metaverse. On January 18, Yuga Labs launched Dookey Dash—not just a challenging game but also an interactive minting process.

To participate, users must hold a Sewer Pass. These passes were initially airdropped for free to BAYC and MAYC holders and have since hit the secondary NFT market, with trading volumes reaching $113.8 million.

The game has achieved tremendous success, with over 25,000 Sewer Pass holders collectively running Dookey Dash 7.5 million times, totaling about 80 years of gameplay, with each player averaging nearly 28 hours of playtime.

This demonstrates that Yuga Labs consistently values exclusivity over accessibility, and Dookey Dash is no exception. The game is designed to reward existing community members with tradable game passes—accessible for gameplay and valuable on the secondary market. This exclusivity helps support higher floor prices, allowing speculators to bet on the future value of Sewer Pass while also improving their gaming skills.

However, the success of Dookey Dash has also raised community concerns about the value and utility of these Sewer Passes after the game ends. But Sewer Pass holders need not worry, as Yuga Labs has announced that they will be able to participate in its next game—The Summoning.

On March 15, holders were able to convert their Sewer Pass into a "power core" HV-MTL, which corresponds to a mech robot. Dookey Dash scores will play a role in this: the higher the score, the rarer the core that can be exchanged. There are eight types of cores available, adding new uniqueness to the experience.

Currently, the HV-MTL series has generated $45.46 million in trading volume.

Review: Recent Performance of the BAYC NFT Ecosystem Over the Last Two Quarters

As mentioned above, one of the most successful NFT projects related to gaming in the Yuga Labs ecosystem is Otherdeed. It achieved the highest trading volume among metaverse concept NFTs, totaling $322 million over the last two quarters. Its average trading volume is $3,112, with a total of 97,974 transactions. This means that each NFT has an average of 5.52 transactions, and each trader has an average of 9.88 transactions.

Another successful NFT series is Sewer Pass, which ranks tenth in NFT trading volume, achieving a total trading volume of $113 million in just one quarter. Its average sale price is $4,668, with a total of 23,494 transactions. This means that each NFT has an average of 2.08 transactions, and each trader has an average of 3.39 transactions.

The newest gaming-related NFT series in the Yuga Labs ecosystem is HV-MTL, which launched in mid-March 2023. Despite being launched for a short time, it achieved $20 million in trading volume within just two weeks. Although the trading volume of this NFT series is not large, each NFT has an average of 1.66 transactions, and each trader has an average of 3.38 transactions.

The Yuga Labs gaming ecosystem has been continuously expanding, achieving remarkable results. Next, let’s turn our attention to the next interesting event: the strategic acquisitions by Yuga Labs and their key role in the company's success.

5. Acquisition of CryptoPunks and Meebits

In March 2021, Yuga Labs made headlines by acquiring the IP of CryptoPunks and Meebits from Larva Labs. This acquisition significantly boosted Yuga Labs' influence in the NFT industry, as the valuations of these two NFT projects at the time were $2.42 billion and $370 million, respectively. Consequently, by the end of March 2022, the valuation of Yuga Labs' NFT portfolio increased to $8.1 billion, accounting for 42.6% of the top 100 NFT projects on Ethereum.

The impact of Yuga Labs' acquisition was immediate, with the trading volume of both projects increasing by 1,000% the day after the acquisition news broke, and demand for CryptoPunks and Meebits surged. In fact, even in the past two quarters, these two projects have performed well, with CryptoPunks generating $286 million in trading volume and Meebits generating $46 million.

Notably, the average sale price of CryptoPunks in the past two quarters was $114,437, the highest among all NFT projects. Additionally, it has seen significant trading volume on Blur, with 87% of CryptoPunks' total trading volume occurring on that platform. Interestingly, the average transaction size on Blur is 7.34% lower than that of the native CryptoPunk NFT market. This highlights that traders on the two markets are trading the NFT with different intentions.

Since acquiring CryptoPunks and Meebits, Yuga Labs has continued to strategically position itself in the NFT industry. In November 2022, it acquired WENEW and its flagship NFT series 10KTF, pushing Yuga Labs into the fashion industry. In the first quarter of 2023, 10KTF accounted for 74% of the total trading volume of NFT fashion collectibles.

In summary, Yuga Labs' acquisition of CryptoPunks and Meebits from Larva Labs was a significant move that further solidified its dominance in the NFT industry.

6. Leading the Web3 Fashion Revolution

In addition to acquiring 10KTF, Yuga Labs has made waves in the fashion world through innovative collaborations, partnering with Gucci, Adidas, and Puma to merge the fashion industry with Web3, attempting to reshape the fashion landscape.

Yuga Labs x Gucci: Digital Fashion Luxury in the Metaverse

On March 27, Gucci announced a partnership with Yuga Labs to bring digital fashion luxury into the metaverse. Gucci and Yuga Labs signed a multi-year collaboration agreement to work together on Yuga Labs' metaverse platform Otherside and its 10KTF NFTs. This collaboration aims to explore joint opportunities between Web3, fashion, and entertainment.

The two companies previously collaborated to launch the Gucci Grail NFT series, designed by 10KTF creator Wagmi-San.

Yuga Labs x Puma: Grailed PUMA Slipstream Sneaker Collaboration

On April 25, Yuga Labs announced a collaboration with Puma to launch a custom sneaker themed around 10KTF.

Starting April 27, Puma Nitro NFT holders and 10KTF community members can obtain the custom sneakers in physical form.

Puma's Chief Brand Officer Adam Petrick emphasized the intention to reimagine traditional sneaker release formats, stating, "Through our long-term collaboration with Yuga Labs, we are able to bridge the gap between the physical and digital worlds and showcase unique designs."

Yuga Labs x Adidas: Indigo Herz Pack

Adidas' NFT project Indigo Herz recently launched the "Indigo Herz Pack," which includes 2,145 pairs of limited-edition sneakers in collaboration with BAYC, PUNKS Comic, and gmoneyNFT, as well as 2,195 limited-edition hoodies featuring PUNKS Comic art. Adidas ALTS NFT holders can purchase them early. (This is an example of how brands create token-gated experiences to reward their loyal fanbase.)

Yuga Labs' collaborations with Puma, Gucci, and Adidas not only bridge the gap between Web3 and fashion but also enhance brand awareness for all parties involved. These collaborations create new revenue streams and brand revitalization opportunities for the fashion industry and showcase the limitless potential of integrating digital technology into the fashion world.

As Yuga Labs continues to lead collaborations with the fashion industry, it is clear that the future of fashion is being reshaped before our eyes.

7. APE: The Highest Market Cap Web3 Gaming Token

ApeCoin (APE) is an Ethereum ERC-20 token issued by Yuga Labs, designed to serve as the currency for the gaming ecosystem. Initially, Yuga Labs airdropped APE tokens to certain NFT holders, such as BAYC and MAYC, with holders potentially receiving tokens worth over $100,000.

As of this writing, APE has a circulating market cap of $1.48 billion, making it the most valuable gaming token. In contrast, traditional Web2 gaming companies, such as Ubisoft, which has been around for decades, have a market cap of only $3.46 billion, while Square Enix is valued at only $6 billion.

Yuga Labs has identified four primary uses for APE:

• Governance—holders can participate in ApeDAO and influence the future direction of the community and company.
• Spending unity—APE can be used as the currency for the gaming ecosystem.
• Access—holding APE can provide users with additional airdrops or exclusive offline events.
• Expansion—developers of other games and metaverses can incorporate APE into their projects, thus participating in the Yuga Labs ecosystem.

It is important to note that APE does not solely belong to Yuga Labs. Players can earn APE in the P2E game Benji Bananas developed by Animoca Brands. In this case, the rewards for the game are APE and the game's native token, PRIMATE. Yuga Labs aims to expand its ecosystem through this type of adoption.

8. Conclusion

It is clear that Yuga Labs plays a significant role in the NFT industry, with its 16 projects accounting for 34.6% of the entire industry and a total trading volume of $2 billion in the past two quarters. The impressive floor prices of BAYC, the rapid rise of Otherside, and Yuga Labs' successful acquisitions all contribute to its strong market share.

However, the key to Yuga Labs' success lies in its unwavering commitment to providing value to the community, setting it apart from other projects. By consistently executing well-planned strategies and fulfilling promises made to the community, Yuga Labs has become a reliable and trustworthy player in the NFT and broader crypto industry.

Finally, what can investors and enthusiasts learn from the case of Yuga Labs? It is to seek out projects with responsible teams and a proven track record. By prioritizing such projects, the community can cultivate a more transparent and sustainable NFT ecosystem—one in which thriving projects are those that genuinely commit to the community and persist through the cyclical ups and downs of the crypto market.