Avatars
Note: Data in this section last updated May 28th, 2022
Avatars are far and away the most popular category of NFT, representing 73% of digital art and almost 60% of all NFTs.
Their most immediate use is as a profile picture on social media sites such as Twitter, Instagram or Discord – in fact, that’s why they are often called PFPs for “Profile Picture” or “Picture for Proof”, depending on whom you ask.
My Twitter PFP at the Time of Writing
But there’s actually a lot more to these avatars than first meets the eye, as we will see when exploring one of the most popular PFP projects, The Bored Ape Yacht Club.
The Bored Ape Yacht Club is a collection of 10,000 pictures of apes. It was created in 2021 by parent Yuga Labs.
Apes are created using a process known as generative art. This means that the artists created several “templates” (e.g. different expressions, fur colors, hats, earrings, eyes) and layer these templates on top of one another with a computer program to create 10,000 works – each unique in its own way.
The Bored Ape Yacht Club
At the time of writing, the cheapest apes sell for approximately $150K (down from $400K in April 2022!), while the most expensive have sold for millions. The Bored Ape Yacht Club community also includes 20,000 Mutant Apes, 10,000 Bored Ape Kennel Club dogs (to keep the apes company!), its own propriety token known as APE and a decentralized virtual world known as the “Otherside”.
While on the surface each ape can be thought of as a piece of art, there are several indirect benefits to owners that include:
Access to an exclusive community: The Bored Ape Yacht Club (BAYC) grants members access to its private Discord group, hosts members-only parties and has plans to build a physical clubhouse
Airdrops, Dividends and Distributions: All original holders received two free Mutant Apes and one Bored Ape Kennel Club dog in 2021, and up to 15,000 APE tokens and three pieces of Otherside metaverse land in 2022. At their peak in April, these free distributions were worth over $350K. Combined with the value of the original APE at the time, anyone who participated in the original mint in April 2021 for ~$200 would have had over $750K in assets (assuming they held). That’s nearly a 4,000x return in one year!
Ownership of the IP: Most projects grant owners exclusive IP rights, allowing them to create and sell derivative works and receive royalties if someone wants to use their avatar in a game, music video or marketing. This could be quite lucrative, as one BAYC holder partnered with CAA for representation, another launched their own music group in partnership with UMG and the project is in talks to create a play-to-earn game, which could leverage the assets from multiple users.
Free ApeCoin: ApeCoin is the official token of the Bored Ape Yacht Club ecosystem. It is intended to be used for payments in the Otherside as well as for purchases of real-world merchandise. There are 1 billion ApeCoin tokens, and 150 million of them were originally airdropped to Bored Ape, Mutant Ape and Kennel Club holders. In addition, there are rumors that BAYC holders will be able to “stake” their assets to earn more tokens.
Ownership of ApeCoinDAO: Ownership of APE tokens also grants holders governance rights of ApeCoinDAO, the entity responsible for governing the ApeCoin token.
Interestingly, Yuga Labs itself is quickly becoming a powerhouse in the NFT community. The project recently received funding from A16Z at a valuation of $4B and ,according to a leaked pitch deck, It generated nearly $140M in revenue in 2021 at >90% margins and expects to generate over half a billion in 2022. In addition, the project has a notable social media presence with nearly a million Twitter followers and is held (or has been held) by several celebrities including Justin Bieber, Serena Williams, Jimmy Fallon, Shaq, Steph Curry, Neymar Jr., Eminem, Tom Brady and Snoop Dogg.
Notable Bored Ape Yacht Club Holders
In addition to the ecosystem expansions listed above, the studio purchased the rights to CryptoPunks and Meebits from Larva Labs in March 2022. This gives Yuga the rights to almost 50% of all avatars! (but remember that due to the decentralized nature of Web3, they don’t actually “own” this IP – the NFT holders do)
As you can see, digital art avatars are shaping up to be so much more than merely “art”. In many ways, JPEGs can be considered “art plus”, and holders of these assets often hope they’re buying the next Picasso + membership at Augusta + the IP rights to Spiderman + a share of stock in Marvel.
In addition to the Bored Ape Yacht Club, there are several other high-profile avatar collections including Crypto Punks, Meebits, Mutant Ape Yacht Club, Clone X, Moonbirds and Azuki.
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