NFT Clubs are all the rage among cryptocurrency 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 courtesy or cooperation. But in early May, Kyle Swenson, a 25-year-old clothing reseller from Orlando, Florida, noticed a change in tone on his Twitter account. An increasing number of the accounts I followed were changing their avatars to caricatures of apes: apes wearing sunglasses or bunny ears, apes wearing leopard prints or rainbow fur, apes smoking cigars or shooting lasers from their eyes. Many wore expressions of indifference or grimaces full of teeth. Some had cigarettes dangling from their mouths, or the red eyes of the deeply drugged. Amid the tumult on Twitter, the apes chatted among themselves, relaxed and supportive. The avatars came from a website called Bored Ape Yacht Club, which had officially launched on April 30 and offered ten thousand unique iterations of the cartoonish apes for sale as non-fungible tokens (N.F.T.s), each at a price about two hundred dollars. in the Ethereum cryptocurrency. A bored monkey N.F.T. “Doubles as your swamp ape club membership,” the site advertised, below an illustration of a ramshackle wooden building festooned with strings of multicolored lights.
Within a day of launch, Bored Ape Yacht Club’s ten thousand images were sold out. When Swenson decided he wanted to buy one on May 3, he paid about $1,700 in OpenSea, an N.F.T. market. 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 to N.B.A. Top Shots, video highlights of basketball games on N.F.T. shape, but this felt more consequential. “It was fear of missing something,” he told me. “I was looking at a lot of people whose opinions I valued about the N.B.A. Top Shots changes their image to an ape.” Matt Galligan, the co-founder and C.E.O. from a cryptocurrency messaging network called XMTP, which managed to buy four Bored Apes at launch, told me: “It became a kind of status symbol, sort of like wearing a fancy watch or weird sneakers.”
Bored Ape Yacht Club’s initial batch of NFTs raised over two million dollars. Since then, the collection has seen almost a hundred million dollars in trade, with the cheapest apes often selling 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 cryptocurrency enthusiasts. Collectors can purchase cute cartoon cats from Cool Cats, which released thousands of its own NFTs on July 1 and sold out soon after. (Mike Tyson has one as his Twitter avatar.) They can buy angular sci-fi women from the Fame Lady Squad, punk ducks from SupDucks, 3D-rendered pills 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 began to abandon their own projects,” Aleksandra Artamonovskaja, founder of London-based curatorial consultancy Electric Artefacts, which has bought and sold a series of N.F.T. avatars, he said. “I am paying rent by exchanging jpeg images on the Internet. That’s what I tell my parents.”
Each avatar club is a rare combination of closed online community, stock group, and art appreciation society. When an ape (or cat, pill, or alien) is purchased at a high price, the perceived value of the set’s ten thousand authentic NFTs increases, in the same way that a painting fetching a record price at auction might. increase the value of an artist’s work. entire work. When a shopper turns their Twitter avatar into an image of a new N.F.T. club, it is a sign of loyalty and also a sign for other club buyers to follow you on social media. (“I traded my photo for the ape’s 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 N.F.T. owners—and hosts regular 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 the skin in the game, it creates a new dynamic, instead of everyone being able to say whatever they want and criticize everything without consequence,” Drew Austin, a tech investor who owns three Bored Apes and co-owns 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 as redundant, NFTs 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 not a collectible to hang on the wall or display on a shelf, but rather to populate the little square or circle of screen space that’s 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 M.F.A. program, but fell ill and took up daily cryptocurrency trading instead. The couple, both in their 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 huge shouting match about David Foster Wallace.”
When Gargamel and Goner started thinking about an N.F.T. project, earlier this year, avatar clubs were a budding trend. Gargamel and Goner were familiar with CryptoPunks, a batch of ten thousand pixelated figurines, which became N.F.T. market after they were released, by a company called LarvaLabs, in 2017. CryptoPunks, which can now sell for as much as $200,000 each, weren’t originally the foundation for a social avatar club, but some collectors (including Jay-Z) use them as avatars: Flaunting one as your profile picture, or “P.F.P.”, was the ultimate symbol of digital prestige. “It’s like having a Harvard degree in the N.F.T. space,” said Austin, owner of two. Gargamel and Goner also noted the success of Hashmasks, an artistic venture that sold 16,384 N.F.T. images in January totaling more than sixteen million dollars. 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 larger story arc,” Gargamel said.
One of the first ideas the duo considered was CryptoCuties, an ensemble of N.F.T. “girlfriends” but found it 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 duct-taped mouths.) Another concept was a shared digital canvas. : anyone who bought it could draw on it. But that looked like it could be treated like a bathroom wall in a dive. “The first thing someone will 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 going to get weird.” Why apes? In crypto parlance, buying in a new currency or N.F.T. with abandon, risking a significant amount of money, is called “leveraging.” “We also like apes,” Goner told me.
Avatar projects up until that point tended to employ low-resolution, often pixelated images in the style of 8-bit video games. Whether they were 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” (a tongue-in-cheek label) was meant to evoke places like Churchill’s Pub, a worn-out Miami music venue frequented by Gargamel and Goner. “We drew deep inspiration from ’80s hardcore, ’90s punk rock, and ’90s hip-hop,” Goner said. “We have called ourselves the Beastie Boys of N.F.T.s.” From the apocalyptic tiki bar scenes on its website to the light-hearted style of the apes themselves, Bored Ape Yacht Club was more like the blueprints for a triple-A video game than an assortment of isolated N.F.T.s. The combination of fancy imagery, subcultural fashion accessories (Hot Topic nuances), and literary pretensions made the Bored Ape universe a catch-all for a certain demographic of crypto brethren. “We took 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 graphics for the project, they hired professional illustrators, who accounted for the bulk of their startup costs (around $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, such as digital costume dolls. Certain traits (rainbow hair, laser eyes, robes) 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 right lineup of traits and you can win big by flipping it. It’s also a bit like participating in a multi-level marketing scheme. Often a small number of crypto whales buy hundreds of N.F.T. each and then sells its reserves when the price rises; New collectors must constantly be found for the old ones to benefit.
A lot of N.F.T. the projects fail or simply do not generate a secondary market. Creators have been known to “pull the rug,” abandoning a company, and running off with collectors’ money. Artamonovskaja, the founder of Electric Artifacts, speculated that 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 around $1,500 shortly after the release, which she now regrets; himself (wearing a Bored Ape Yacht Club-branded baseball cap, with a pop-punk vibe) is currently receiving offers in excess of 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 like he’s “diligent on a venture deal, which is funny because I’m looking at a fucking boring 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 about 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 N.F.T. club presents a “road map” to prospective buyers prior to 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. Bored Ape Yacht Club sold name-brand baseball caps, donated hundreds of thousands of dollars to ape sanctuaries and offered every collector an N.F.T. 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, Bored Ape’s owners have put cartoon primates in 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 top gossip, and is crowdfunding an ape-themed novel. (N.F.T.s aren’t entirely secure: ownership is indicated by just a line of code in the blockchain, and anyone can theoretically copy an ape’s image and use it as an avatar. But the clubs control that appropriation. “Crypto Twitter has this understanding: You don’t just 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 flow freely is prohibited; exclusivity is the business model. The founders of Bored Ape Yacht Club, by contrast, see their openness as an advantage. “Anything people create with their apes just grows the brand,” Goner said. Just as Silicon Valley startups obsess over software that’s “scalable,” growing exponentially to serve more users, N.F.T. clubs aim for a scalable culture; Like open source software, your cultural creations can spread organically through the efforts of many users while remaining recognizable, resulting in a kind of user-generated mythology. Dom Hofmann, co-founder of the now-defunct social network Vine and creator of an N.F.T. club called Blitmap, told me, “It’s playing into the idea that collectively and over time, fans can know 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 is this possibility that makes buying N.F.T. clubs so desirable: buying the new avatar could be like acquiring a small fraction of the rights to the next Mickey Mouse. But when it comes to the punk bands that inspired Bored Ape Yacht Club, getting too big can be interpreted as selling out. What makes a band 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 in a heart-shaped beanie and sunglasses, is set as your Twitter avatar, for now. “The more it’s associated with status, the less I feel inclined to maintain it,” Galligan said. “If the sole purpose of a club is ‘the number goes up,’” the crypto chant for rising prices, “well, that’s kind of silly.”