NFT clubs are all the rage among crypto enthusiasts. Are they a get-rich-quick scheme or the future of culture?

In social networks, agreements are tenuous and alliances fleeting. It pays to be as incendiary as possible: conflict drives compromise more than politeness or cooperation. But in early May, Kyle Swenson, a twenty-five-year-old clothing reseller from Orlando, Florida, noticed a change in the tone of his Twitter account. An increasing number of accounts I followed were changing their avatars to cartoon apes: apes wearing sunglasses or bunny ears, apes in leopard print or rainbow skin, apes smoking cigars or shooting lasers from their eyes. Many had expressions of indifference or grins full of teeth. Some had cigarettes dangling from their mouths or the red eyes of the deeply drugged. In the midst of the Twitter tumult, the apes were chatting with each other, relaxed and supportive. The avatars come from a website called Bored Ape Yacht Club, which officially launched on April 30 and offers ten thousand unique iterations of the cartoon primates for sale as non-fungible tokens (NFTs), each priced at about two hundred dollars. in the Ethereum cryptocurrency. A Bored Ape NFT “doubles as your membership in a swamp ape club,” the site announced, below an illustration of a dilapidated wooden building adorned with strings of multi-colored lights.

A day after the launch, the ten thousand images of Bored Ape Yacht Club were sold out. When Swenson decided he wanted to buy one on May 3, he paid around $1,700 on OpenSea, an NFT marketplace. His ape has a preppy look (sailor hat, gingham shirt, quilted vest) “similar to how I like to dress,” Swenson said. A few weeks later, he bought another. He had previously traded NBA Top Shots, video highlights of basketball games in the form of NFTs, but this felt more important. “It was fear of missing out,” he told me. “I was seeing a lot of people whose opinions I valued on NBA Top Shots change their image to an ape.” Matt Galligan, co-founder, and CEO of a cryptocurrency messaging network called XMTP, which had managed to buy four Bored Apes during launch, told me: “It became a kind of status symbol, kind of like wearing a smartwatch or rare sneakers.

The initial batch of NFTs from Bored Ape Yacht Club raised over two million dollars. Since then, the collection has seen nearly a hundred million dollars in trade, with the cheapest apes often selling for nearly fourteen thousand dollars. In recent months, the project has inspired a wave of similar clubs and a mania for NFT avatars among crypto enthusiasts. Collectors can buy cute cartoon cats from Cool Cats, which released thousands of its own NFT on July 1 and sold out shortly after.(Mike Tyson has one as his Twitter avatar.) You can buy angular sci-fi women from Fame Lady Squad, punk ducks from SupDucks, pill 3D rendered ras from BYOPills, meme-ready shiba inus from The Doge Pound, and bonsai trees from Zenft Garden Society. New projects are launched every week, promoting their products on Twitter, the main public home of crypto discourse, in the hope of selling them in turn. “Everyone saw the success of Bored Apes and quickly started abandoning their own projects,” said Aleksandra Artamonovskaja, founder of London-based curatorial consultancy Electric Artefacts, which has bought and sold several NFT avatars. “I am paying rent by exchanging jpeg images on the internet. That’s what I tell my parents.”

Each avatar club is a strange combination of the closed online community, stock group, and art appreciation society. When an ape (or cat, pill, or alien) is bought at a high price, the perceived value of the ten thousand authentic NFTs in the set increases, in the same way, that a painting that fetches a record price at auction might increase the value of an artist’s work. entire work. When a buyer makes their Twitter avatar a picture of a new NFT club, it is a sign of loyalty and also a signal for other club buyers to follow them on social media. (“I changed my photo to the ape and got hundreds of Twitter followers the first day,” Swenson said.) The hub of most clubs is Discord, the real-time chat app. The Bored Ape Yacht Club Discord server has over thirteen thousand members, both fans and NFT owners, and hosts constant discussions on channels like #crypto-talk and #sports-bar. Mutual investment, both social and financial, forms a kind of bond between club members within the broader chaos of the Internet.

“When everyone has skin in the game, it creates a new dynamic, instead of everyone being able to say what they want and criticize everything without consequence,” Drew Austin, a tech investor who owns three Bored Apes and is a co-owner. of two others. , he told me. That sense of community has been missing from the internet, according to the founders of the Bored Ape Yacht Club. Contrary to their reputation for being superfluous, NFTs can help fill the gap. “We want your Bored Ape to be your digital identity,” Gargamel, one of the founders, told me during a recent video chat. It is not a collectible to hang on the wall or display on a shelf but to populate the little square or circle of screen space that is supposed to represent yourself.

Gargamel and his co-founder, Gordon Goner (both use pseudonyms), are unlikely tech entrepreneurs. Before founding the Bored Ape Yacht Club, Gargamel worked as a writer and editor. Goner planned to attend an MFA program but fell ill and instead took up cryptocurrency day trading. The couple, both in their mid-30s, are “literary nerds,” according to Gargamel, who wears wire-rimmed glasses and a neatly 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 had a big shouting match about David Foster Wallace.”

When Gargamel and Goner started thinking about an NFT project earlier this year, avatar clubs were a budding trend. Gargamel and Goner were familiar with CryptoPunks, a batch of 10,000 pixelated figures, which became top-notch art on the NFT market after its release, by a company called LarvaLabs, in 2017. Selling for as much as $200,000 each, they weren’t originally the basis for an avatar social club, but some collectors (including Jay-Z) use them as avatars: displaying one as your profile picture, or “PFP,” was the last digital cache symbol. “It’s like having a Harvard degree in the NFT space,” said Austin, who owns two. Gargamel and Goner also noted the success of Hashmasks, an art venture that sold 16,384 NFT images in January for a total of more than $16 million. Both projects were closed systems; its developers did not promise any expansion beyond the initial limited release. Gargamel and Goner searched for an idea that they could continue to grow over time. “We were looking at opportunities to do something with a broader story arc,” Gargamel said.

One of the first ideas the duo considered was CryptoCuties, a set of NFT “girlfriends,” but they found that too accommodating, not to mention creepy. (The male-dominated crypto world can sometimes feel like a frat house; the creators of a recent avatar project drew criticism and later apologized for featuring female figures with dark eyes and taped-up mouths.) Another concept was a shared digital canvas. : Anyone who bought it could draw on it. But that seemed amenable to being treated like a bathroom wall in a dive. “The first thing someone is going to draw there is a penis,” Gargamel said. However, the image of an online dive bar stuck with the couple, and from there, a sci-fi story took shape. The year is 2031. People who invested in the early days of cryptocurrency have become billionaires. Now they are fucking bored. What do you do now that you’re rich beyond your wildest dreams? Goner said. “You’re going to hang out at a swamp club with a bunch of apes and you’re gonna get weird.” Why apes? In crypto jargon, buying a new coin or NFT with abandon, risking a significant amount of money, is called “leveraging.” “We also like apes,” Goner told me.

Avatar projects up to that point tended to employ low-resolution, often pixelated, 8-bit video game-style visuals. Whether it was people, monkeys, or ghosts, the figures were pretty generic. Bored Ape Yacht Club, by comparison, created a rich and detailed iconography drawn from the personal tastes of its founders. The setting of an Everglades “yacht club” (an ironic appellation) was intended to evoke places like Churchill’s Pub, a well-known Miami music venue that Gargamel and Goner frequented. “We were deeply inspired by ’80s hardcore, ’90s punk rock, and ’90s hip-hop,” said Goner. “We’ve been calling ourselves the Beastie Boys of NFT” From the doomsday tiki bar scenes on its website to the light-hearted style of the apes themselves, Bored Ape Yacht Club was more like plans for a triple-A video game. then a variety of isolated NFTs. The combination of sophisticated visuals, subcultural fashion accessories (shades of Hot Topic), and literary pretense made the Bored Ape universe a trap for a certain crypto-bro demographic. “We take lessons from Hemingway’s iceberg theory,” Gargamel told me. “Ten percent visible at the top, with all the scaffolding built below.”

Gargamel and Goner brought in two other friends, programmers who call themselves No Sass and Emperor Tomato Ketchup, to handle the necessary coding of the blockchain. To execute the project’s graphics, they hired professional illustrators, who accounted for most of their startup costs (about $40,000, according to the group). As with many avatar clubs, the characteristics of the cartoon apes were incorporated into an algorithmic program that randomly generates thousands of images with unique combinations of bodies, heads, hats, and clothing, like digital dress-up dolls. Certain traits (rainbow hair, laser eyes, togas) appear only rarely, making apes sporting those looks more desirable and therefore 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 correct lineup of traits, and you can make big profits by flipping it over. It’s also a bit like participating in a multi-level marketing scheme. Often a small number of crypto whales buy hundreds of NFTs each and then sell their reserves when the price rises; New collectors must constantly be found for the old ones to benefit.

Many NFT projects fail or simply do not generate a secondary market. Creators have been known to “pull the rug”, abandoning a company and running away with collectors’ money. Artamonovskaja, the founder of Electric Artefacts, speculated that the Bored Ape Yacht Club became popular due to its relative accessibility. “No one can afford a CryptoPunk,” he told me. Apes seemed like the next best thing to buy: “a cool avatar for a decent price.” Artamonovskaja released an ape for about fifteen hundred dollars shortly after release, which she now regrets; himself (wearing a Bored Ape Yacht Club-branded baseball cap, with a pop-punk vibe) is currently getting bids for over twelve thousand dollars.

For the founders, who made $2 million from their initial sale, launching new NFTs is no different than printing money. The charming silliness of the images belies the amount of capital at stake. Austin, the investor, told me that he approaches buying avatars as if he’s “diligent in a venture deal, which is funny because I’m looking at a bored fucking monkey.” Still, Goner told me that he and the other founders don’t like to think of 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 crowdfunding projects, the creators of each NFT club present a “roadmap” to potential buyers before launch, explaining what they will do with the money they raise. They promise YouTube channels, donations to charity, additional NFTs for collectors, and physical merchandise. The Bored Ape Yacht Club sold name-brand baseball caps, donated hundreds of thousands of dollars to ape sanctuaries, and offered each collector an NFT dog, 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 can brand their own projects or products and sell them independently. In the three months since the club opened, the owners of Bored Ape have put the cartoon primates on craft beer lines 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 his ape “Jenkins the Valet,” gave him a backstory as the Yacht Club’s chief gossip, and is crowdfunding an ape-themed novel. (NFTs are not entirely secure: Ownership is indicated only by a line of code on the blockchain, and in theory, anyone can copy an image of an ape and use it as an avatar. But the clubs control that appropriation. “Crypto Twitter has this understanding: you just don’t steal someone’s avatar,” Artamonovskaja told me.)

For most brands that produce culture, whether it’s Supreme streetwear, Marvel superheroes, or pop music, letting intellectual property freely circulate is forbidden; exclusivity is the business model. The founders of the Bored Ape Yacht Club, by contrast, see their opening as an advantage. “Anything people create with their apes just grows the brand,” Goner said. Just as Silicon Valley startups obsess over software that is “scalable,” growing exponentially to serve more users, NFT clubs aim for a scalable culture; Like open source software, its cultural creations can spread 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 Vine social network and creator of an NFT club project called Bitmap, told me, “It’s taking a gamble on the idea that collectively and over time, fans can figure out what’s best. “. for the universe that matters to them.” Austin, the investor, envisioned Bored Ape Yacht Club as a possible “decentralized Disney” of the future.

In part, it’s this possibility that makes buying from NFT clubs so desirable: Buying the new avatar could be like buying 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 interpreted as selling out. What makes a group great and what makes it rich don’t necessarily line up. Galligan, the founder of the startup, has kept two of his four Bored Apes. One of them, a creature with a heart-shaped beanie and sunglasses, is set as his Twitter avatar, for now. “The more it’s associated with status, the less I’m inclined to maintain it,” Galligan said. “If the sole purpose of a club is to ‘increase the number,'” the crypto chant for price gouging, “well, that’s a bit silly.”