One of the more interesting NFT success stories has to be that of the Bored Ape Yacht Club (BAYC) and how four friends received 500 million in seed funding, said to be the most ever raised by a startup, and turned a simple NFT idea into a company valued at 4 billion in just over a year. If you’re thinking about buying NFTs, or launching one as a business idea then you can definitely learn something from Wylie Aronow and Greg Solano who co-founded Yuga Labs in 2021 with Kerem and Zeshan. 

In their own words, ‘BAYC was created by four friends who set out to make some dope apes, test our skills, and try to build something (ridiculous).’ To understand how the BAYC became such a phenomenal success and how apes quickly became the most popular and valuable NFTs in the world, we need to dive into details.

Wylie and Greg, who go by their pseudonyms Gordon Goner and Gargamel, both come from a creative writing background but also had a shared interest in gaming and crypto. Greg bought CryptoKitties back in 2017 when there were a number of NFT projects gaining popularity, such as CryptoPunks and Rare Pepes. Both of which became incredibly valuable and were still selling for millions in 2021. Since then the NFT market has dropped significantly and while some have lost 80% in value, others continue to hold strong.

When the BAYC NFTs launched on April 29, 2021, they were 0.08 ETH each, which was approximately $200, yet just a few months later in October, Bored Apes were selling for millions. Here’s what happened.

During 2020 the founders had been talking about NFT ideas, they could see an opportunity to do something creative together and, with any luck, create an NFT concept that could be huge, they cared less about floor price and more about having fun and doing something crazy. In early 2021 they were inspired by the huge success of the NFT project Hashmasks, and seeing the sales of CryptoPunks and other NFTs skyrocket, they agreed to move fast with a concept and go-to-market strategy.

They knew enough about what worked both creatively and technically and got to work designing the first collection of 10,000 Bored Apes. The apes were algorithmically generated and minted in a variety of different traits, including fur colour, clothing, and accessories. Like CryptoPunks, some characteristics were more rare than others, making them more valuable.

The success of NFTs rely greatly on a deep involvement with the crypto and NFT communities that can support and promote them. The BAYC creators tapped into the influencer scene by paying tribute to popular personalities with ape designs reflecting their quirky characteristics. Wylie and Greg agree that this simple strategy was key to the BAYC becoming the pop culture phenomenon it is today.

Unlike CryptoPunks or any other NFT project to that point, when BAYC launched no one knew the design of the ape they would receive. Each Bored Ape was only minted after the user completed the transaction, meaning that they would not see the design of their ape until the purchase was processed. This in itself created buzz and anticipation and provided a sense of fairness in the launch. 

Wylie cracked the Bored Ape idea in an essay he sent to Greg and they agreed the creative treatment would be based on pop culture icons and the NYC club scene of the late 60s. Design ideas began with observations of bored 'crypto Twitter' profiles and the concept of ‘aping-in’ or going apeshit which, in crypto communities, means investing in a project without doing due diligence. In addition to owning a limited edition ape, the NFT also included exclusive access to the Yacht Club, an online community set in a dive bar in the Everglades.

After the pre-sale, ape owners were invited to draw on a pixel board in the BAYC bar, they explained on their website that the bathroom contained a canvas accessible only to wallets containing at least one ape. They invited each ape-holder to paint a pixel on the bathroom wall every fifteen minutes and described it as 'a collaborative art experiment for the cryptosphere. A members-only canvas for the discerning minds of crypto twitter.’

An important feature for the founders of BAYC was to provide utility with every NFT purchased. What buyers understood was that ‘when you buy a Bored Ape, you’re not simply buying an avatar or a provably-rare piece of art. You are gaining membership access to a club whose benefits and offerings will increase over time. Your Bored Ape can serve as your digital identity, and open digital doors for you.’

Bored Ape holders received access to the BAYC Discord server where they can connect with each other, share ideas, and get exclusive news and invites to events such as Apefest. They also have access to a variety of merchandise and get membership, in the form of an Otherdeed, to the Otherside metaverse, a virtual world being developed by Yuga Labs. 

Most importantly, holders own the commercial rights to their NFT, meaning they can use their NFT to create and sell products and services. None of this was new territory, BAYC weren’t the first to foster an exclusive club and live events or offer commercial rights with NFT ownership. Most NFT projects have online communities and do meet-ups, and Meebits, SupDucks and others also offer holders full commercial rights. 

Many BAYC holders have taken the opportunity to monetise their Apes in creative ways. KINGSHIP is a virtual band made up of four Bored Apes, each with it’s own unique style; Non Fungible Films is a production company that’s creating a movie universe based on the BAYC; Happy Dad sells BAYC-inspired collectibles and Bored Taco is designed around the owners ape. Seth Green was even working on an animated TV show with him playing his ape, but had to hit pause when his ape was kidnapped in a phishing attack. A few weeks later, Green offered the thief, Mr Cheese, $300,000 to buy it back, he initially refused but eventually negotiated a deal to return the ape.

Adidas released a 30,000 NFT collection in collaboration with BAYC and Yuga Labs have collaborated with Gucci to release a collection of NFTs that give holders access to exclusive Gucci products and experiences. Additionally they've announced partnerships with Warner Bros, Sony Picture, and Universal Music Group.

The most remarkable thing about NFTs like Bored Apes and CryptoPunks is how valuable they became in a matter of months. CryptoPunks were originally given away for free at launch yet a year later CryptoPunk #9998 sold for a whooping $53.2 million. Comparatively, Bored Apes were originally all $200 and by October 2021 some were selling for 2 million. Currently on Opensea Bored Ape prices range from 11 million to $30,000. The ridiculous amounts of money being spent on NFTs has raised suspicions about money laundering and other illegal activity and investigations do occur in the US.

As soon as the BAYC launched, the team were already busy working on the next iteration of 10,000 apes, the Mutant Ape Yacht Club, which dropped in August of 2021. The MAYC NFTs were even more popular that BAYC with the highest sale reaching 35 million in October 2022. At the same time, they launched the Bored Ape Kennel Club, 10,000 dog NFTs given to the BAYC holders for free. 198 of them are currently listed for sale at prices up to 250k.

In November 2021, Yuga Labs acquired the CryptoPunks and Meebits NFT collections, valued at 2 billion and 200 million respectively. They have since announced plans to integrate CryptoPunks and Meebits into the Otherside metaverse platform, which is currently in beta testing and requires users to hold an Otherdeed virtual land plot NFT of which 100,000 were minted in April 2022, and 55,000 were sold to the public.

Legends of the Mara was the first GameFi experience on the platform but was recently sold to Web3 company Faraway Gaming Studio, who announced in April 2024 that they 'levelled up their intellectual property after acquiring the HV-MTL and Mara collections from Yuga Labs.'

Yuga has formed many strategic partnerships to expand its metaverse offerings, enhance interoperability, and protect creator rights with plans to build hi-fi virtual experiences, live gaming services and new marketplaces. While Yuga's reputation and sales fluctuate, only time will tell if their heavily invested plans will reap rewards or crash and burn, I'd bet money on the former.