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Web3 may have already found its House of Mouse.
Or should we call it the House of Bored Apes?
Since launching 11 months ago, the Bored Ape Yacht Club non-fungible token collective has exploded into the mainstream. It’s the world’s most valuable NFT collection, with an estimated market capitalization of 1.1 million Ether, or $3.4 billion, as of Thursday afternoon, according to CoinMarketCap. (NFTs are blockchain-based digital assets like a photo, video, music that are noninterchangeable.) In the physical world, it’s just about everywhere, too—from hoodies to your Twitter feed to billboards in Manhattan. And the Bored Apes don’t seem like they’re going away any time soon, either. Especially not after Tuesday, the day that Bored Ape Yacht Club-creator Yuga Labs revealed that it had raised $450 million at a whopping $4 billion valuation from a seemingly random assortment of three dozen investors. Among them were the venture capital firm Andreessen Horowitz, NFL free-agent wide receiver Dez Bryant, and 2000s music icon Timbaland.
Part of the special sauce of Yuga Labs stems from the simple fact that the company owns the IP underlying the three most valuable NFT collections. In addition to the Bored Ape Yacht Club, it owns CryptoPunks and the Mutant Ape Yacht Club. It’s also in control of the IP behind Meebits, which sits at No. 8 on CoinMarketCap’s list of largest NFT collections. The business model has been working out quite well for Yuga Labs, too, considering it brought in $127 million of net revenue in 2021, earning more than a 95% profit on that, according to a leaked pitch deck that’s been previously reported on by The Block and The Verge.
Amy Wu thinks it goes further, though.
In an interview, the head of FTX Ventures, a $2 billion fund that participated in the recent funding round, told me that Yuga Labs is, in fact, looking at the potential of becoming the House of Mouse—or, in this case, the House of Apes—for Web3, the decentralized, blockchain-dependent version of the Internet currently in its earliest of early days.
“Their North Star is Disney,” Wu says. “They see themselves as holding valuable IP that they want to build, essentially, a media entertainment empire with. … Disney is what it is because of the culture it has created, and that’s what Bored Ape Yacht Club and the Yuga Labs team is trying to do.”
Becoming Disney—an entertainment goliath with a market capitalization in excess of $250 billion—is no easy feat.
However, with a growing collection of IP at Yuga Labs’ disposal, it’s a comparison that works quite well actually. Think about your Disney+ account, or the one that your sibling pays for that you grift on. The Mandalorian, WandaVision, Dug are all the IP of Star Wars, Marvel, and Pixar that was gobbled up over the years by Disney. Now imagine deploying that same model with NFT collections.
Yuga Labs is already moving in that direction, too. The company is currently developing a metaverse gaming project called Otherside that is designed to bring together the NFT community—Bored Ape holder or not—according to The Verge. CEO Nicole Muniz told the publication, which broke the fundraising news: “We’re opening the door to effectively a walled garden and saying, ‘Everybody’s welcome.'” A spokesperson for Yuga Labs declined to comment.
What Yuga’s success will ultimately hinge on is a broader appeal to the Bored Ape universe. Putting the questions about the NFT model to the side, of which there are plenty, a single Bored Ape NFT costs several hundred thousand dollars, which obviously acts as a hard limit on who can buy them. And then there’s also the matter of how Yuga reaches people.
“The consumer products, in addition to a beloved IP, is what can reach a mainstream audience,” Wu says.
No answer is going to come soon as to whether Yuga can pull it off. Wu says it’s a conversation that’s bound to play out over the next decade or two. But if it does, the opportunity would be huge, for both Yuga and all its backers.
“It was a no brainer to invest,” Wu says. “This is one of the most visionary projects happening in Web3.”
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Declan Harty
@declanharty
Declan.harty@fortune.com
DECENTRALIZED NEWS
Credits 🚀
Federal-prosecutor-turned-venture-capitalist Katie Haun, formerly of Andreessen Horowitz, has raised $1.5 billion for her new crypto VC funds… Investment bank Cowen is opening up spot cryptocurrency trading to its institutional clients… Larry Fink, the head of the world’s biggest money manager BlackRock, sees the Russian-Ukraine war as a potential catalyst for more digital currency adoption… Hedge fund behemoth Bridgewater Associates plans to back an external crypto fund… Goldman Sachs partnered with Michael Novogratz‘s Galaxy Digital to conduct its first over-the-counter crypto options trade… Coincheck is going public in the U.S. through a $1.3 billion SPAC deal… Meta appears to be working toward a mix of crypto ambitions based on new trademark applications that were filed… GameStop has launched a beta version of its NFT marketplace… Eyeball-scanning crypto startup Worldcoin is raising $100 million in a deal that values its tokens at $3 billion… Crypto exchange Kraken has named Carrie Dolan of Tradeshift as CFO… Justin McMahan, former global treasurer of Tower Research Capital, has joined crypto investment company Abra as CFO… Crypto payments company MoonPay has added former Financial Crimes Enforcement Network official James Freis as a special adviser on regulatory matters… Mike Cagney‘s Figure Technologies will soon start offering 30-year mortgages of up to $20 million in return for an equal amount of crypto collateral.
Debits 🐻
El Salvador delayed the issue of its Bitcoin-backed bond… New regulations around crypto will need to be crafted, Federal Reserve Chairman Jerome Powell says… A senior economist at the Federal Reserve Bank of Chicago has found that it doesn’t really matter which crypto you invest in. They all tend to go in the same direction… Arthur Cheong of DeFiance Capital had more than $1.7 million of NFTs stolen from his crypto wallet… The artist formerly known as DJ D-Sol, Goldman Sachs CEO David Solomon, is performing at Lollapalooza in Chicago.
FOMO NO MO
“I’ve been yelling a lot, and sometimes that yelling does feel like howling into the wind.” Nine years after the creation of Ethereum, Vitalik Buterin still dreams of a future where blockchain technology can lead to massive socioeconomic and political changes designed for the betterment of society. And yet, the world of crypto seems to keep coalescing around speculative and flashy projects, and in turn, muddying the conversation around the value of such technology that’s taking place around the world. In Time‘s latest cover story, Andrew Chow spoke with Buterin about how the now 28-year-old is beginning to strike back in hopes of reframing the focus on crypto back toward the greater good.
From the article:
“Crypto itself has a lot of dystopian potential if implemented wrong,” the Russian-born Canadian explains the morning after the party in an 80-minute interview in his hotel room.
Buterin worries about the dangers to overeager investors, the soaring transaction fees, and the shameless displays of wealth that have come to dominate public perception of crypto. “The peril is you have these $3 million monkeys and it becomes a different kind of gambling,” he says, referring to the Bored Ape Yacht Club, an überpopular NFT collection of garish primate cartoons that has become a digital-age status symbol for millionaires including Jimmy Fallon and Paris Hilton, and which have traded for more than $1 million a pop. “There definitely are lots of people that are just buying yachts and Lambos.”
BUBBLE-O-METER
$750,000
Web3 startups are dolling out the cash. And plenty of it. In the middle of a massive wave of resignations in the greater labor market, Web3 jobs are promising salaries that cast a long shadow over what traditional tech giants have been paying employees, according to a report from The Defiant. Lending protocol Silo Finance, for instance, has a senior engineer role that it’s willing to pay a salary of upwards of $750,000—through a mix of crypto and a “basic salary”— to fill. TempleDAO is currently advertising a position that would pay somewhere between $300,000 and $900,000, the report said. And LooksRare is willing to pay more than $600,000 for some new hires.
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(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
MEMES AND MUMBLES
“Yeah, I’m into crypto,” the U.S. Fish and Wildlife Service tweeted Monday. To be clear, it was talking about Cryptobranchus alleganiensis, an aquatic giant salamander, according to the tweet, that is more commonly known by the completely awesome name “hellbender.”
Financial Services
