We have seen them on the social networks of artists Justin Bieber, Eminem, Gwyneth Paltrow, and even the football player Neymar. These funny cartoonish monkeys, phlegmatic, sometimes playful, rarely sad, with a headgear, a call or a cigar in their mouth, disguised as Caesar or a convict from Alcatraz. One of a kind. These are NFTs, otherwise known as non-fungible tokens. Digital works to which a title of ownership has been associated, stored on an inviolable blockchain, which can therefore be bought and resold in two clicks. The Bored Ape Yacht Club Collection (BAYC), founded by two thirty-somethings from Florida, has 10,000 monkeys. This has perfectly benefited from the incredible growth of NFTs, post-Covid, with sales approaching a billion dollars between 2021 and 2022. At that time, its parent company, Yuga Labs, also raised 450 million dollars financing from the prestigious Andreessen Horowitz fund to develop.
But the bubble burst. Justin Bieber’s monkey, purchased for $1.3 million, is now estimated at $64,277.66 (-95%), we can read on OpenSea, the world’s leading exchange platform. The price of “Bored Ape” #2087, with its psychedelic coat and cigarette in its mouth, acquired for a collector for $3.1 million at an auction, is now close to $100,000 (-97%). We hardly come across monkeys on social networks anymore. X (ex-Twitter) has completely removed them from profile photos. Meta also ended its support for NFTs in mid-2023. The trajectory of the “Bored Apes” is not detached from that of its entire market, and more broadly of tech, largely showered with capital during the Covid crisis. The average price of an NFT fell by 67% between 2022 and 2023 to $665, according to a study by the NFT18 firm. Trading volumes also fell by a similar order of magnitude. According to work carried out by the crypto platform DeepGambl, unveiled in mid-2023, some 23 million people hold worthless non-fungible tokens.
The difficult animation of a community
A situation that leads to breakage. Yuga Labs announced a wave of layoffs at the end of 2023. And the price of success took other forms. Complaints and class actions against the “Bored Apes” and the auction house Sotheby’s, from buyers upset by the rapid loss of value of digital objects. The appearance of counterfeits all over the Web. And more fierce and agile competition, like the “Pudgy Penguins”, this collection of chubby penguins which now exceeds the famous monkeys in value, and is available in plush form at the American supermarket giant Walmart. But Yuga Labs’ problem goes beyond just falling in value. “A Bored Ape still costs several tens of thousands of dollars, and prices are stabilizing towards less disproportionate amounts,” puts into perspective Alexandre Tsydenkov, co-president of NFT Paris, an event dedicated to this universe taking place in the capital this Friday February 23 and Saturday February 24. Yuga Labs, as a good leader in the sector, has also purchased numerous collections, the “Cryptopunks” for example, and many others, to protect its rear. Its immediate future does not seem threatened. The question is rather: what next?
If the marketing of “bored monkeys” was a success, the end of systematic payments of royalties during each resale from platforms like OpenSea, for several months, threatens its business model. Then, NFTs were also designed for community purposes. “The Bored Aped Yacht Club is a bit like the digital version of Lagardère Paris Racing in the Bois de Boulogne, or the Molitor club. We pay a very high price in order to access premium events, chat with people who have the same centers of interest in chic environments”, recalls Stanislas Mako, co-founder of the NFT Factory, a place dedicated to this innovation in Paris. Not just for a computer file.
In 2023, the “Bored Ape Yacht Club” hired a former director of Activision, Daniel Alegre, with the aim of developing a metaverse (Otherside), a cryptocurrency-type token (ApeCoin), as well as games to maintain the interest of the online community, its natural environment. But his dismissal, and his replacement by one of the original founders of BAYC, Greg Solano, just this week, signals the failure of this strategy. “We have a lot of work to do,” admitted the latter on X, announcing new promotional campaigns for Otherside. Physical events sometimes take place in parallel. With mixed success. One of the latest meetings, an “Ape Fest” in Hong Kong last fall, resulted in embarrassing publicity for the firm: more than 20 people reported problems with eye pain and burning sensations. to the eyes due to lights used at the party, reported the New York Times.
Beyond crypto
The difficulties of BAYC and Yuga Labs highlight the current limits of Web3. That of the metaverse, obviously, which is struggling to bring people together, is evidenced by the resounding failure of Meta in this area. Then those of cryptocurrencies, which despite a recent rebound, are forging a future that is more financial, as a store of value, than monetary, for purposes of payment or exchange between individuals. However, NFTs are very linked to this ecosystem, since their prices are generally set in ETH (ether), and they are also stored on blockchains. A marriage for the better: price increases in cryptos which give purchasing power to those who wish to invest in digital art; the “bored monkeys” took advantage of it. And for the worst: the various scandals in the crypto world are also tarnishing the reputation of the sector.
However, it remains “difficult to part with it”, thinks Alexandre Tsydenkov. Crypto enthusiasts are among the first adopters of NFTs. They form the glue of communities. But mentalities are changing. The French giant Sorare, whose game is based on the exchange of digital sports cards, has been accepting payments in euros for its NFTs since last summer. And other uses, without crypto, sometimes without intrinsic value, are emerging little by little. “There are NFTs that serve as digital souvenirs, as the Musée d’Orsay recently offered during the recent Van Gogh exhibition. NFTs that replace traditional brand loyalty systems,” lists Stanislas Mako. “These are more concrete use cases for companies and individuals,” he continues. This is also the message of the NFT Paris event this year: “NFTs are just a property right in the digital world. The ramifications are numerous, in many sectors, from sport to gaming, including luxury “The idea is to move from a niche reserved for a handful of enthusiasts, to something invisible and normalized,” believes Alexandre Tsydenkov. Something that is no longer just about art and monkeys. As hip as they are.
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