More than JPEGs: How Bored Ape Yacht Club Built an NFT Empire

In this article, we dive into the world of the Apes to find out what they’re all about and look at on-chain data to see if the hype is real.

Introduction
NFTs have taken over the world. Wildly expensive pixelated cartoon humans, anime themed art and cartoon animals are increasingly becoming the crypto investor's profile picture of choice. Among the menagerie, however, Apes are the most iconic.
Bored Ape Yacht Club (BAYC) has emerged as both the most expensive and most influential NFT collection. In addition to commanding a total market cap in excess of 1.69M ETH, the collection has managed to snag endorsements from the likes of Stephen Curry, Steve Aoiki and Jimmy Fallon – just to name a few.
How did a NFT collection of cartoon ape JPEGs turn into a multi-billion dollar brand in just over a year? Are the Apes truly strong together or is “community” just the newest buzzword thrown around to gain traction?
In our first installment of More Than JPEGs, we dive into the world of the Apes to find out what they’re all about and look at on-chain data to see if the hype is real.
Backstory
How it started
“Apes” and “Apeing” have a strong cultural significance among cryptonatives. The words are commonly used to describe blindly investing into something, typically stocks, cryptocurrencies, and NFTs. As retail interest in investing grew during the pandemic, so did the usage of the term. Spend any amount of time on subreddits such as WallStreetBets or on Crypto Twitter and you’d see the term appearing in every other post.
According to an interview with CoinDesk, founders Gordan Goner and Gargamel had an idea of a bar that was only accessible by members of an exclusive club. Apes were the members of choice for the club, and from this the concept of the Bored Ape Yacht Club was born.
April 23 2021 was the day the Apes were launched. At 0.08 ETH or ~$200 at that time, mint was almost free by today’s standards and yet it took roughly a week for the collection of 10,000 NFTs to sell out. There was no hype and no traction till Pranksy, one of the most profitable and prolific NFT collectors (who currently sits just outside of the top 10 on the Nansen NFT profitability leaderboard), gave them a shoutout a week later.
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The success that would unfold in the months to come would blow even the most bullish predictions out of the water. As of writing, the floor price for an Ape sits at ~100 ETH, ~$200K.
Progression
BAYC is the foundation, but not the entirety of the ecosystem that Yuga Labs has built over the past year. Feeling that the Apes were getting lonely, the team decided to create a companion collection: 10,000 Bored Ape Kennel Club NFTs were distributed to the holders of BAYC for free roughly 2 months after the apes were launched.
Following that drop, a third collection, Mutant Ape Yacht Club (MAYC), was launched in August 2021. This time, the collection’s total size was 20,000, double that of the previous 2 collections. 10,000 serums were given to the 10,000 holders of BAYC which allowed them to mint a mutant version of their ape. The other 10,000 was sold to the general public at a 3 ETH mint price. This time the collection sold out within an hour and the team raised a total of $96M.
Most recently, the team launched a fourth collection: Otherside, which is a virtual land collection for the forthcoming BAYC metaverse. The collection has a total size of 200,000 NFTs, 100,000 of which launched on April 30 2022 and the remaining will be given out to holders of the NFT that contribute to the development of Otherside. Similar to previous collections, existing holders of BAYC and MAYC were able to claim their Otherside NFT with no additional cost beyond gas fees. Members of the public were able to purchase the NFTs at a cost of 305 ApeCoins.
The launch attracted tons of interest in the crypto space, with the contract for the sale seeing 112 smart money addresses interacting with it. Gas prices flew from a range of 40-70 Gwei the day before to a peak of 8.1K Gwei during the mint. The spike caused an uproar on Twitter and many users were disappointed with the poor management of the launch and a sub optimal smart contract being deployed. However, Vitalik himself has responded and concluded that optimizing the contract would have had little impact on the gas fees.

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The sale that put the world on notice
In September 2021, world renowned auction house Sotheby’s sold a set of 101 Apes and 101 Kennels for a total of $26.2M, over 30% higher than the estimated upper range of the lot. During the same month, Christies, another renowned auction house, had their own auction of BAYC NFTs. In total, 4 apes were auctioned and sold for a total of approximately $2.8M.

Source: Sotheby's Both auction houses are leaders in the art and luxury auction world. Looking for pieces from the likes of Vincent van Gogh, Raphael and Leonardo da Vinci? Sotheby’s and Christie’s would likely be where you can get your hands on one. BAYCs being featured in their auctions added a stamp of legitimacy to the collection and NFTs in general in the eyes of the traditional art world.
Claiming the crown
Since Apes first rose to prominence, there has been a simmering rivalry between Apes and CryptoPunks. For years Punks held the title of the pre-eminent “Blue Chip” NFT asset due to its storied history and dedicated community. Although the floor prices of Apes flipped that of CryptoPunks on numerous occasions and eventually pulled away into a league of its own by breaking 100 ETH, the OG status of CryptoPunks allowed the collection to arguably maintain its crown in the NFT space.
However, the debate over which is more influential was ultimately put to rest when Yuga Labs acquired the intellectual property rights of both CryptoPunks and Meebits from Larva Labs. CryptoPunks still maintain their OG status and historical relevance, but as of today the king of NFTs are undoubtedly the Apes.
On-chain deep dive
To understand the success and gain a deeper insight into the Bored Apes universe, let’s dive into the NFT analytics on Nansen to assess if the collection is truly the success that it appears to be.

Overview
Here’s a high level overview of the collection :

• Over 602,514 ETH in secondary sales (Wash trading filter applied)
• Highest single day volume of 15,415 ETH
• Averaging ~3.7K ETH daily volume the L30D
• ~6.2K holders
• 254 Apes have been held since mint

With 2.5% in royalties on secondary sales, Yuga Labs has received at least 15K ETH in royalties.

Source: Nansen's NFT God ModeSeniority distribution
As mentioned earlier, there are over 6.2K holders. It took about a week for the collection to hit 200 unique addresses but went parabolic from May to July, reaching over 4,400 unique addresses. ~80% of the NFTs have been held for at least 60 days, and ~63% for at least 90 days. This suggests that 63% of the NFTs on average, were purchased for 93 ETH or less. Floor prices peaked at 150 ETH at the end of April and have since dropped to ~100 ETH floor. The average buyer joined the club relatively recently but are nonetheless, at break even or in slight profit during a period when most markets are trending downwards.

Source: Nansen's NFT God mode‍
How sticky is the floor price?
Beyond checking the percentage of wallets that are sitting on decent amounts of profit, let’s take a look at the percentage of wallets holding only 1 BAYC NFT and the balance of diamond hands to assess how sustainable the current floor price is.
BAYC has a high percentage of wallets that only hold 1 Bored Ape. At 81%, it’s higher than similar collections in the Nansen Blue Chip-10 index such as CloneX (71%), Azuki (76%) and CryptoPunks (72%). This makes it less likely for holders to sell their Ape as it’s the only one that they hold, hence creating a more resilient floor price. Additionally, there are not as many “whale” holders who can drag down the price by liquidating their collection.
In addition to that, 5.2K apes have not been sold by wallets that currently hold the NFTs. While the number is down slightly from its all-time high of almost 6K NFTs, it’s one of the few collections with a gradual upward trajectory.

Source: Nansen's NFT God modeWe can also take a look at listing activity to get an understanding of the psychology of the holders.
Only about 5.9% of the collection is listed, 0.26% within 15% of the floor price and the most being listed at the 198 - 395 ETH price range. This shows that the majority of the holders aren’t thinking about selling and for the small percentage that are, are looking for prices well above the current floor.

Smart to ape in at these prices?
Prices are high and it seems like only degens would be buying a collection that’s at all-time highs. It’s difficult to imagine that smart money isn't taking profit at such prices, let alone ape-ing into the collection.
Looking at the trends in smart money holders, two things stand out.

• Number of Smart NFT Early Adopters and Smart NFT Traders are in a gradual downtrend.
• Number of Smart NFT Hodlers and Smart NFT Sweepers are in a gradual uptrend.

Source: Nansen's NFT God mode‍
On a whole, early adopters have started to gradually reduce their holdings and traders are taking profits and exiting as prices move up. Early adopters are likely seeing “life changing money” level profits. One of the top wallets on our profit leaderboards for BAYC is a Smart NFT Early Adopter that made a total of 1,404 ETH in profits, a 41,326% in profit.

Traders typically scale out as prices rise and with BAYC continually pushing new highs, it becomes difficult for them to remain in their position. However, smart money addresses that are inclined towards longer term horizons have been increasing. This is a signal that they’re optimistic about the long term prospects of the collection.
Based on the individual transaction dashboard, over the last 30 days we see that smart money has indeed still been making purchases. A number of them are even making purchases well above the 12 hour simple moving average price.

Future of the apes
BAYC is on track to become a hugely influential brand, having a mix of cultural influence similar to that of Supreme but social signaling that rivals high fashion brands like Gucci and Louis Vuitton. As their ecosystem grows and develops, so does their influence and significance. The launch of ApeCoin, ApeCoin DAO and virtual land collection further solidifies their prominence in the Web3 universe. More mainstream partnerships similar to that of the Adidas partnership as well as the BAYC film trilogy that’s in the pipeline will help to spread the mindshare of BAYC amongst the masses.
With holders being given full commercial rights and control over their NFTs, we could see a future where individual Apes become celebrities in their own right. Brands and movies might employ eye catching Apes or Apes with specific traits might to be featured in their advertisements or film.
Between these mass media touchstones and the forthcoming “Otherside” metaverse, the Bored Ape Yacht Club is now pioneering what it means to be a culturally significant NFT collection.
Conclusion
The apes have evolved from simple JPEG NFTs into a broader ecosystem that’s becoming as culturally influential as brands like Supreme. Their meteoric rise is practically unheard of and unrivaled by both mainstream fashion brands and crypto based projects alike.
While everything they’ve achieved so far is impressive to say the least, it may just be the beginning of a much bigger universe that they’ll create. Holder activity suggests that both degens and smart money share similar optimism on the future of BAYC. The team’s dream of a world run by apes might not be far-fetched after all and the Apes might become the rulers of the metaverse.

Disclaimer
The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.