Bored Ape Yacht Club (BAYC) is on the verge of something special, and it is going to change the way we see, and value, NFTs. With more high-profile buyers like Jimmy Fallon, Post Malone, and Stephen Curry joining the club, this process will only be expedited. First I’ll do a brief overview of how NFTs are typically valued today for anyone new to the space, and then we’ll dive into the change that BAYC is bringing to prominence.
Present-Day NFTs Rely on Rarity
There are many ways that various NFTs attain value today. An artist could produce work that becomes coveted by a loyal community of fans, ownership of a certain NFT could provide some sort of value for the holder, etc. For NFTs that are a part of a profile picture (PFP) collection, where there are typically 10,000 1-of-1 pieces within, value is almost entirely based on trait rarity.
Within a PFP collection, a variety of traits exist that are typically randomly generated when an individual mints the NFT. NFTs within that collection then derive their value (when compared to others in the collection) based on how rare its traits are compared to the others in the collection. For a Koala Intelligence Agency NFT (KIA), for example, some rare traits include DJ Headphones (pictured below), Cosmic Fur, and Ninja Gear. Traits that are rarer than others will usually also have a higher floor price than others.
When the rarity of each NFT trait is compiled, an overall rarity rank can be given for the NFT. For example, the Koala shown above is ranked as the 809th most rare NFT in the entire KIA collection of 10,000 koalas. This, in turn, gives the NFT a value that is, to some degree, predictable within the collection. It only makes sense that the 5th rarest NFT in a collection should be more valuable than the 200th rarest NFT, right? This is how NFTs have typically been valued up to this point. Bored Ape Yacht Club is about to change that.
Bored Ape Yacht Club is Trailblazing Uncharted Territory
BAYC is reaching the point where individual apes from the collection are becoming brands themselves. Owners, increasingly each day, are creating value in the NFT space; their apes are attached to that value. The NFT is linking itself to the personal brand of its owner, be it an individual, group, or company. I believe that the apes that become the biggest brands, and generate the most value, will become some of the most recognizable, and expensive, NFTs in the world. It will no longer be a simple rarity = $ value formula.
Take Jimmy Fallon’s ape (pictured at the top of the article) for example. Fallon is one of the most recognizable celebrities in the world. He has 20 million Instagram followers and 51.4 million followers on Twitter, and we all know that’s just the tip of the iceberg when it comes to his fame and global presence. His BAYC, under the assumption that it is now attached to his personal brand, is in my eyes one of the most valuable apes in existence despite its trait rarity. If someone were to buy that ape in five years from Fallon, I say that person would not only be buying an NFT, they’d be buying a part of Fallon’s well-established valuable personal brand that the ape was attached to and used to promote.
This change that we are witnessing over time is largely made possible because Bored Ape owners have possession of the intellectual property rights for their NFTs in the collection. That means they may use their apes however they please without fear of being sued by the creators of the BAYC project (This is a key distinction between BAYC and Crypto Punks as Punk owners do not possess IP rights). A prime example of this is what Universal Music Group has done in collaboration with Jimmy McNelis, owner of multiple apes and a leading NFT collector in the space. The music industry titan has signed a deal to use four of Jimmy’s NFTs (3 BAYC, 1 MAYC) to form a metaverse band, “Kingship”. The goal of the initiative is to provide global entertainment via metaverse concerts, community events, and creating new utility for fans and people in the NFT space.
The beginnings of this movement from rarity to brand value have occurred on Twitter. Prominent members of the ape community who use their apes as profile pictures, like “CapetainTrippy”, have apes that have become more recognizable than others within the collection as the owner has grown their online personal brand and presence. As the implied value of the owner’s personal brand grows, I say, if utilized properly, the value of their ape increases alongside it. I would consider a prominent BAYC owner’s profile picture ape to be more valuable than others that are more rare trait-wise but maintain a significantly smaller online presence. These prominent apes are more than just a profile picture; they’re a valuable part of the owner’s personal brand. Over time, I predict that the most valuable apes will no longer be the ones with the rarest traits, but rather, the ones with the largest and most valuable brand. Eventually, as other NFT projects grow in prominence, I foresee something very similar happening to their collections.
The Big Picture
NFTs are becoming more than what anyone could have ever imagined. Projects are becoming formidable blossoming brands, and when attached to the right owners, individual NFTs are becoming valuable brands as well. As more large companies and celebrities enter the space, they’ll all be looking to utilize NFTs to bolster their online presence and brand marketing. The value of some NFTs, as Bored Ape Yacht Club is beginning to demonstrate, could depend greatly on who (or what company) the owner is. The future of NFT valuations is not entirely rarity-based; how the NFT is used, who owns it, and the utility it provides will all play much larger roles.
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Disclaimer: This article is written purely for entertainment and educational purposes and should not be taken as financial advice in any way.
Do your own research and, if you are seeking financial advice, find a professional who is right for you.
