F.T. clubs are all the rage among cryptocurrency enthusiasts. Are they a get-rich-quick scheme or the future of culture?
On social media, agreements are tenuous and alliances fleeting. It pays to be as incendiary as possible—conflict drives more engagement than politesse or coöperation. But, at the beginning of May, Kyle Swenson, a twenty-five-year-old clothing reseller in Orlando, Florida, noticed a shift in the tone of his Twitter feed. An increasing number of accounts that he followed were changing their avatars to cartoons of apes: apes sporting sunglasses or bunny ears, apes with leopard-patterned or rainbow fur, apes smoking cigars or shooting laser beams from their eyes. Many wore blasé expressions or toothy grimaces. Some had cigarettes dangling from their mouths, or the red eyes of the deeply stoned. Amid the Twitter melee, the apes were chatting among themselves, chill and supportive. The avatars came from a Web site called Bored Ape Yacht Club, which had officially launched on April 30th, offering ten thousand unique iterations of the cartoon primates for sale as non-fungible tokens (N.F.T.s), each at a price of about two hundred dollars in Ethereum cryptocurrency. A Bored Ape N.F.T. “doubles as your membership to a swamp club for apes,” the site advertised, below an illustration of a ramshackle wooden building festooned with strings of multicolored lights.
Within a day after the launch, all ten thousand Bored Ape Yacht Club images had sold out. By the time Swenson decided that he wanted to buy one, on May 3rd, he paid around seventeen hundred dollars on OpenSea, an N.F.T. marketplace. His ape has a preppy look—sailor hat, gingham shirt, puffer vest—“similar to how I like to dress,” Swenson said. A few weeks later, he bought another. He had previously traded N.B.A. Top Shots, basketball-game highlight videos in N.F.T. form, but this felt more consequential. “It was fear of missing out,” he told me. “I was watching a lot of people whose opinions I valued on N.B.A. Top Shots change their picture to an ape.” Matt Galligan, the co-founder and C.E.O. of a messaging network for crypto called XMTP, who had managed to buy four Bored Apes during the launch, told me, “It became a status symbol of sorts, kind of like wearing a fancy watch or rare sneakers.”
Bored Ape Yacht Club’s initial batch of N.F.T.s brought in more than two million dollars. The collection has since seen almost a hundred million dollars in trading, with the cheapest apes often going for almost fourteen thousand dollars. In recent months, the project has inspired a wave of similar clubs and a mania for N.F.T. avatars among crypto-enthusiasts. Collectors can buy cutesy cartoon cats from Cool Cats, which released thousands of its own N.F.T.s on July 1st and sold out soon after. (Mike Tyson has one as his Twitter avatar.) They can buy angular sci-fi women from Fame Lady Squad, punkish ducks from SupDucks, 3-D-rendered pills from BYOPills, meme-ready shiba inus from The Doge Pound, and bonsai trees from Zenft Garden Society. New projects launch every week, hyping their wares on Twitter, the principal public home of crypto discourse, in the hope of selling out in turn. “Everyone saw the success of Bored Apes and started quickly dropping their own projects,” Aleksandra Artamonovskaja, the London-based founder of the curatorial consultancy Electric Artefacts, who has bought and sold a number of N.F.T. avatars, said. “I’m paying my rent by trading jpeg pictures on the Internet. That’s what I tell my parents.”
Each avatar club is a strange combination of gated online community, stock-shareholding group, and art-appreciation society. When one ape (or cat or pill or alien) is bought for a high price, the perceived value of all ten thousand authentic N.F.T.s in the set rises, the same way a painting fetching a record price at auction might increase the value of an artist’s entire œuvre. When a buyer makes his Twitter avatar an image from a new N.F.T. club, it’s a sign of allegiance, and also a signal to other buyers in the club to follow him on social media. (“I changed my picture to the ape and I got hundreds of Twitter followers the first day,” Swenson said.) The center of most clubs is Discord, the real-time chat app. Bored Ape Yacht Club’s Discord server has more than thirteen thousand members—fans as well as N.F.T. owners—and hosts constant discussion in channels such as #crypto-talk and #sports-bar. The mutual investment, both social and financial, forms a kind of bond among club members within the wider Internet bedlam.
When everyone’s got skin in the game, it creates a new dynamic, as opposed to everyone being able to say what they want and critique everything without consequence,” Drew Austin, a technology investor who owns three Bored Apes and co-owns two others, told me. That sense of community has been missing from the Internet, according to Bored Ape Yacht Club’s founders. Contrary to their reputation for superfluousness, N.F.T.s can help fill the void. “We want your Bored Ape to be your digital identity,” Gargamel, one of the founders, told me during a recent video chat. It’s a collectible not to hang on the wall or exhibit on a shelf but to populate the tiny square or circle of screen space that’s supposed to represent your self.
Gargamel and his co-founder, Gordon Goner (both go by pseudonyms), are unlikely tech impresarios. Before starting Bored Ape Yacht Club, Gargamel was working as a writer and editor. Goner was planning to attend an M.F.A. program but fell ill and took up cryptocurrency day trading instead. The pair, both thirtysomething, are “literary nerds,” according to Gargamel, who wears wire-rimmed glasses and a carefully trimmed goatee. They grew up in Miami and met, a decade ago, while drinking at a bar. Goner, who has tattoos covering his chest, told me, “We got into a big screaming match about David Foster Wallace.”
By the time Gargamel and Goner began brainstorming an N.F.T. project, early this year, avatar clubs were a nascent trend. Gargamel and Goner were familiar with CryptoPunks, a batch of ten thousand pixelated figures, which became the blue-chip art of the N.F.T. market after their release, by a company called LarvaLabs, in 2017. CryptoPunks, which now can sell for as much as two hundred thousand dollars apiece, weren’t designed to become avatars, but some collectors (including Jay-Z) use them that way—flaunting one as your profile pic, or “P.F.P.,” was the ultimate symbol of digital cachet. “It’s like having a Harvard degree in the N.F.T. space,” Austin, who owns two, said. Gargamel and Goner also noticed the success of Hashmasks, an artistic venture that sold 16,384 N.F.T. images in January for a total of more than sixteen million dollars. Both of those projects were closed systems; their developers didn’t promise any expansion beyond the initial, limited release. Gargamel and Goner sought an idea they could keep growing over time. “We were seeing the opportunities to make something with a larger story arc,” Gargamel said.
One early idea that the duo considered was CryptoCuties, a set of N.F.T. “girlfriends,” but it struck them as too pandering—not to mention creepy. (The male-dominated crypto world can sometimes feel like a frat house; the creators of one recent avatar project drew criticism, and later apologized, for featuring female figures with darkened eyes and duct-taped mouths.) Another concept was a shared digital canvas: anyone who bought in could draw on it. But that seemed liable to be treated like a bathroom wall at a dive bar. “The first thing someone’s going to draw up there is a dick,” Gargamel said. The image of an online dive bar stuck with the pair, though, and from there a science-fictional story line took shape. The year is 2031. The people who invested in the early days of cryptocurrency have all become billionaires. “Now they’re just fucking bored. What do you do now that you’re wealthy beyond your wildest dreams?” Goner said. “You’re going to hang out in a swamp club with a bunch of apes and get weird.” Why apes? In crypto parlance, buying into a new currency or N.F.T. with abandon, risking a significant amount of money, is called “aping in.” “We also just like apes,” Goner told me.
Avatar projects up to that point tended to employ low-resolution, often pixelated imagery, in the style of eight-bit video games. Whether of people or monkeys or ghosts, the figures were fairly generic. Bored Ape Yacht Club, by comparison, created rich and detailed iconography drawn from its founders’ personal tastes. The setting of an Everglades “yacht club” (an ironic appellation) was meant to evoke places like Churchill’s Pub, a well-worn Miami music venue that Gargamel and Goner frequented. “We were deeply inspired by eighties hardcore, punk rock, nineties hip-hop,” Goner said. “We’ve been calling ourselves the Beastie Boys of N.F.T.s.” From the scenes of an apocalyptic tiki bar on its Web site to the jaunty style of the apes themselves, Bored Ape Yacht Club felt more like the plans for a triple-A video game than an assortment of isolated N.F.T.s. The combination of sophisticated visuals, subcultural fashion accessories (shades of Hot Topic), and literary pretension made the Bored Ape universe catnip to a certain crypto-bro demographic. “We took lessons from the Hemingway iceberg theory,” Gargamel told me. “Ten per cent visible at the top, with all the scaffolding built out beneath.”
Gargamel and Goner brought on two other friends, programmers who go by the names No Sass and Emperor Tomato Ketchup, to handle the necessary blockchain coding. To execute the project’s graphics, they hired professional illustrators, which accounted for most of their upfront costs (around forty thousand dollars, according to the group). As with many avatar clubs, the cartoon ape features were then fed into an algorithmic program that randomly generates thousands of images with unique combinations of bodies, heads, hats, and clothes, like digital dress-up dolls. Certain traits—rainbow fur, laser eyes, togas—show up only rarely, making apes that sport those looks more desirable, and thus more valuable. Each image remained hidden until the initial collector paid for it, so buying one was a bit like playing a slot machine—get an ape with the right alignment of traits and you can profit wildly by flipping it. It’s also a bit like participating in a multilevel marketing scheme. Often, a small number of crypto-whales buy hundreds of N.F.T.s apiece and then sell off their hoards when the price rises; new collectors must constantly be found in order for prior ones to profit.
Plenty of N.F.T. projects fail, or simply don’t spark a secondary market. Creators have been known to “rug-pull,” abandoning a venture and absconding with collectors’ money. Artamonovskaja, the founder of Electric Artefacts, speculated that Bored Ape Yacht Club caught on because of its relative accessibility. “No one can afford a CryptoPunk,” she told me. The apes seemed like the next best thing to buy—“a cool avatar for a decent price.” Artamonovskaja flipped an ape for around fifteen hundred dollars soon after the launch, which she now regrets; the same one (wearing a Bored Ape Yacht Club-branded baseball cap, with a pop-punk vibe) is currently fielding offers for upward of twelve thousand dollars.
For the founders, who netted two million dollars with their initial sale, releasing new N.F.T.s is not unlike printing money. The winsome goofiness of the imagery belies the amount of capital at stake. Austin, the investor, told me that he approaches buying avatars like he’s “diligencing a venture deal, which is funny because I’m looking at a fucking Bored Ape.” Still, Goner told me that he and the other founders don’t like to think of the apes as “investment vehicles.” He added, “If you think of it in terms of artists and weirdos running a hedge fund, that’s going to give us a heart attack”
As with many crowdfunded projects, the creators of each N.F.T. club present a “road map” for prospective buyers prior to launching, explaining what they will do with the money they raise. They promise YouTube channels, donations to charities, extra N.F.T.s for collectors, and physical merchandise. Bored Ape Yacht Club has sold branded baseball caps, donated hundreds of thousands of dollars to ape sanctuaries, and offered each collector a dog N.F.T., courtesy of the Bored Ape Kennel Club. But it was also one of the first clubs to offer individual buyers the commercial rights to the apes they own: each member is allowed to brand his own projects or products and sell them independently. In the three months since the club launched, Bored Ape owners have put the cartoon primates on lines of craft beer and created animated YouTube series, made painted replicas, and designed skateboard decks. Kyle Swenson, the clothing reseller, launched a publication called the Bored Ape Gazette, to cover the community. One owner named their ape “Jenkins the Valet,” gave him a backstory as the Yacht Club’s chief gossip, and is crowdfunding an ape-themed novel. (N.F.T.s aren’t wholly secure—ownership is denoted only by a line of code on the blockchain, and anyone can theoretically copy an ape image and use it as an avatar. But the clubs police such appropriation. “Crypto Twitter has this understanding: you just don’t steal someone’s avatar,” Artamonovskaja told me.)
For most brands that produce culture, whether Supreme streetwear, Marvel superheroes, or pop music, letting intellectual property circulate freely is verboten; exclusivity is the business model. The Bored Ape Yacht Club founders, by contrast, see their openness as an asset. “Anything that people create with their apes only grows the brand,” Goner said. Just as Silicon Valley startups obsess over software that is “scalable,” growing exponentially to serve more users, N.F.T. clubs aim for scalable culture; like open-source software, their cultural creations can expand organically through the efforts of many users while remaining recognizable, resulting in a kind of user-generated mythology. Dom Hofmann, the co-founder of the now defunct social network Vine and the creator of an N.F.T. club project called Blitmap, told me, “It’s taking a gamble on the idea that, in aggregate and over time, the fans might know what’s best for the universe that they care about.” Austin, the investor, envisioned Bored Ape Yacht Club as a potential “decentralized Disney” of the future.
In part, it’s this possibility that makes buying into N.F.T. clubs so desirable: purchasing the hot new avatar might be like acquiring a small fraction of the rights to the next Mickey Mouse. But, as for the punk bands that inspired Bored Ape Yacht Club, getting too big can be read as selling out. What makes a group cool and what makes it rich do not necessarily align. Galligan, the startup founder, has kept two of his four Bored Apes. One of them, a creature in a beanie and heart-shaped sunglasses, is set as his Twitter avatar—for now. “The more it’s associated with status, the less I feel inclined to keep it,” Galligan said. “If a club’s only purpose is ‘number go up’ ”the crypto chant for rising prices—“well, that’s kind of lame.”
The Bored Ape Yacht Club is a collection of 10,000 unique Bored Ape NFTs— unique digital collectibles living on the Ethereum blockchain. Your Bored Ape doubles as your Yacht Club membership card, and grants access to members-only benefits, the first of which is access to THE BATHROOM, a collaborative graffiti board. Future areas and perks can be unlocked by the community through roadmap activation.
On top of all this, a new NFT project called Arabian Camels recently launched and they decided to give away 2,000 of their NFTs (good marketing move for the project) to existing members of the Bored Ape Yacht Club, which created even more excitement around BAYC.
Here are some fun stats courtesy of Loopify, for a brief overview of both projects.
* Meebits: 4,629 holders with 20,000 supply
* Apes: 3,429 holders with 10,000 supply
* Meebits primary sale: 20,000 ETH+
* Apes primary sale: 800 ETH
* Meebits floor: 2.5 ETH 🔻 0.7 ETH
* Apes floor: 0.08 ETH 🔺0.69 ETH
Both projects are holding up strong, and nobody can predict what will happen, but perhaps it is the prevalent community spirit and close involvement of the BAYC creators and users that will keep this project going for a long time. What is certain, is that this is a learning curve for everyone and that these are the projects that future creators will one day look back on and learn from on how to do things better.