When Yuga Labs announced the acquisition of Moonbirds' development team PROOF, there was almost no doubt about Yuga Labs' label as "LVMH of NFT".
Now, Yuga Labs owns top NFT IPs/projects such as CryptoPunks, BAYC, MAYC, BAKC, "Monkey Land" Otherdeed, Meebits, Moonbirds, etc. These projects occupy 8 seats among the top 15 projects with the largest trading volume in OpenSea history.
But at the same time, Yuga Labs also encountered its strongest challenger in history. On February 17, Pudgy Penguins' floor price surpassed BAYC for the first time. Contrary to Yuga Labs' continuous progress in acquisitions in recent years, the charm of "Bored Ape" has been fading.
We can't help but ask, why? Why did Pudgy Penguins gain market favor? Why did "Boring Ape" lose its charm?
"The project is working" is not a mockery, NFT players are actually very tolerant
"Pulling up the price is justice", this sentence has been widely circulated among the NFT player community for a long time, and has even become one of the bases for some criticisms of NFT players being toxic. There is also a golden sentence circulating among the Chinese NFT player community, "The project party is doing things", and everyone always half-jokingly says that they are most afraid of the project party doing things, and the more things the NFT does, the more it will fall.
But the success of Pudgy Penguins actually proves that many project parties that were "doing things" in the past were actually just moving themselves or staying in their comfort zone. The so-called "doing things" could not allow holders to clearly see the long-term strategy of the project, nor could it bring long-term value to the project.
In the last round of NFT bull market, every PFP project would say that they wanted to create IP, but what was the result? What we saw was the release of new series, the issuance of tokens, and staking... Most of them stayed in their own comfort zone, using the familiar Ponzi scheme to incentivize involution in the small field of Web3.
In fact, creating IP is a long-term and large project. Teams that start with Web3 are often only good at operations within the NFT or Web3 circle. When a project party successfully gets money from retail investors with dreams, how many of them spend the money on hiring professional talents in brand construction, content creation, social media operations, etc.?
Is it fair to pull the price? Yes, it can even be said that the increase in the floor price is the biggest source of emotional value for NFT players. Is there a market maker behind Pudgy Penguins? I don’t know, but I believe most people think the answer to this question is "yes". Can just pulling the price make Pudgy Penguins such a huge success?
No, such success requires the combined force of value recognition from possible market makers and retail investors. Pudgy Penguins' series of logic in IP construction is reasonable. They have formulated a matching brand concept for their cute and friendly image, and chose selling toys as a breakthrough point based on the characteristics of their image, and achieved good results.
These things, together with the increase in the floor price, have not only consolidated its own community, but also formed a new value recognition among the NFT player community: "NFT projects that do a good job can really increase in value."
Whether the narrative is logical or not depends on whether the market recognizes it. So we can also see that Doodles, which was previously criticized, has also risen by nearly 70% in the past month. Is there any good news? No, the recent news is that it has a joint watch with G-SHOCK, but Doodles has been "doing things".
Cool Cats has also started to "make toys", so in the past month, Cool Cats has also achieved a similar increase as Doodles.
On the road to creating IP, Pudgy Penguins can only be said to have had a good start, but it has already had such an amazing performance in the NFT market. NFT players are actually very tolerant and not toxic at all.
"As long as it is a tide, it will recede one day"
Pudgy Penguins' floor price surpassed BAYC, which was regarded as a historic moment by many players. In fact, many NFT players were not surprised, and each had their own perspectives to explain why they believed that this historic moment was actually "inevitable."
But for me, the answer to this question is actually very simple: “Yuga Labs is no longer cool!”
Does BAYC, or Yuga Labs, still remember the path they came from? I'm not saying that they have forgotten that they are an NFT project, but do they still remember the excitement of "I want to do something cool" when they were doing BAYC, and forget the idealism they once had?
The vibe of "hanging out in a secret club in a swamp, restricted to apes, and painting on collaborative pixel boards on the walls of the club's bathroom" appealed to me, who couldn't afford BAYC at the time, and tried my best to observe the BAYC holders and feel like I was in a drunken tavern full of wild idealists.
When did the vibe, the solidarity, the community communication and collective decision-making disappear? The slogan "Apes together strong" seems to be becoming more and more empty, and the community watched Yuga Labs rush along the road of acquisitions, pulling out small games with new assets one after another (Otherside is cool, but after that...).
Businesswise, Yuga Labs has been expanding, but what it leaves behind for the community seems to be more confusion and loss.
Whether it is IP or games, these are new stories planned by NFT after the first round of rapid and dramatic value expansion. Although NFT players later became immune to these new stories or even sneered at them, this is not shameful - just like stocks, sometimes you can also think that a company is cycling through storytelling -> delivery -> telling new stories, but what can be delivered is called value, and what cannot be delivered is called bubble.
Secondly, at that time, everyone was genuinely excited about the infinite possibilities of these NFTs, and standing on the wave of the new era, they exclaimed from the bottom of their hearts - "Cool!"
According to Pudgy Penguins CEO Luca Netz's "NFT Value Accumulation Funnel" theory, 8,888 Pudgy Penguins, assuming they have 3 million loyal fans, can be digested with just a 0.3% conversion rate.
But NFT is not a security after all. No matter how profitable the physical business is, it is difficult for NFT to directly distribute dividends to holders under current regulations. Therefore, for fans to convert into consuming NFT "collectibles", they still have to rely on "coolness".
If BAYC wasn’t “cool” at the beginning, it wouldn’t have attracted a group of staunch supporters. Who would want to promote a project full of paper hands? Forgetting “cool” is actually abandoning the community and forgetting the original intention.
As the NFT giant "Teacher Guan" @jivacore said, "Yuga Labs is like Supreme is no longer cool. As long as it is a tide, it will recede one day."
What touched me the most among the voices of the BAYC community was not the confusion or criticism of Yuga Labs’ acquisition by those big Vs, but this sentence from @votefloridaman: “The motto of Degen Only has gone with the wind.”
Conclusion
We are about to survive the cold winter of NFT and even the entire crypto market. As a practitioner who has been working in the NFT field, there is only one reason why I can stick to it: NFT is really cool and interesting. We are not short of good projects, but we are short of good teams.
What to do actually depends on how you think. Without that feeling, is there really any difference between a large NFT project and a "copycat token" with a picture that has a huge market value but is slowly declining?
NFT will definitely have the next bull market, and it will definitely be the most attractive crypto asset for young people. For a series like BAYC with a high floor price, most civilian NFT players like me cannot afford it. So for the remaining 10% of players who have purchasing power, how can we attract them?
Yuga Labs may not have much time left to think, as this will be a race against the bull market.
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