As long as there is a tide, there will be a day of retreat. Yuga Labs may not have much time left to contemplate.
In the background, Pudgy Penguins is surpassing Bored Ape Yacht Club (BAYC) with a 54% surge in floor price, reaching as high as 19.5 ETH.
“Project teams are working” is not a mockery; NFT players are actually very tolerant.
“As long as there is a tide, there will be a day of retreat.”
Conclusion:
When Yuga Labs announced the acquisition of Moonbirds’ development team PROOF, there was hardly any doubt about Yuga Labs being the “LVMH of NFTs”. Now, Yuga Labs owns top-tier NFT IPs/projects such as CryptoPunks, BAYC, MAYC, BAKC, Otherdeed, Meebits, and Moonbirds. These projects occupy 8 positions in the top 15 projects with the highest trading volume in OpenSea’s history.
However, at the same time, Yuga Labs has also encountered its strongest challenger to date. On February 17th, Pudgy Penguins’ floor price surpassed that of BAYC for the first time. While Yuga Labs has been continuously advancing in acquisitions, the appeal of “Bored Apes” has been steadily declining.
We can’t help but ask, why? Why did Pudgy Penguins gain market favor? Why did “Bored Apes” lose their charm?
“The rise and fall of the market” is a widely circulated saying among NFT players, and it has even become one of the bases for criticizing toxic NFT players. Another saying that is popular among Chinese-speaking NFT players is “Project teams are working.” People often half-jokingly say that the projects that actually do things are the ones that NFTs keep falling.
But Pudgy Penguins’ success actually proves that many “doing things” project teams in the past were actually just moving themselves or staying in their comfort zones. The so-called “doing things” does not allow holders to see the project’s long-term strategy clearly, nor does it bring long-term value to the project.
In the previous NFT bull market, every PFP project claimed to be doing IP. But what happened? We saw new series, token launches, staking… Most of them stayed in their comfort zones, in the familiar territory of Web3. And in reality, building IP is a long-term endeavor, and teams starting from Web3 are often only proficient in operations within the NFT or Web3 community. When a project team successfully receives money from dream-chasing retail investors, how many of them spend that money on professional brand construction, content creation, social media operation, and other talents?
Is “the rise and fall of the market” justice? Yes, it can even be said that the rise in floor price is the biggest emotional value source for NFT players. Does Pudgy Penguins have market makers manipulating the price? I don’t know, but I believe most people would think the answer to this question is “yes.” However, can boosting the price alone bring Pudgy Penguins such tremendous success?
No, such success requires the combined value recognition of potential market makers and retail investors. Pudgy Penguins’ logic in IP construction is reasonable. They have developed a matching brand image for their cute and affable characters, and have achieved good results by selling toys based on their character traits. Along with the rise in the floor price, they have solidified their community and formed new value recognition among NFT players: “NFT projects that do things well can really rise.”
Whether the narrative is logical depends on market recognition. So we can also see that Doodles, which was previously criticized heavily, has also risen nearly 70% in the past month. Is there any positive news? No, the recent news is about a collaboration with G-SHOCK for a limited edition watch, but Doodles has been “doing things” all along.
Cool Cats have also started “making toys,” so they have achieved a similar increase in value as Doodles in the past month.
On the path of building IP, Pudgy Penguins can only be said to have had a good start, but they have already shown astonishing performance in the NFT market. NFT players are actually very tolerant and not toxic at all.
Pudgy Penguins surpassing BAYC’s floor price is seen by many players as a historic moment. In fact, many NFT players are not surprised and have their own reasons why they think this historic moment is “inevitable.” But for me, the answer to this question is actually quite simple:
Does BAYC, or rather Yuga Labs, still remember where they came from? I’m not saying they have forgotten that they are an NFT project. I’m saying, do they still remember the excitement of doing something cool when they created BAYC? Have they forgotten their once idealistic aspirations?
Let’s make a NFT, everything stems from the phrase of one of Yuga Labs’ co-founders, Greg Solano:
“Wandering in a secret club in the swamp, exclusively for apes. And doodling on the collaborative pixel board on the club’s bathroom wall.” This vibe attracted me, who couldn’t afford BAYC at the time, to observe the community of BAYC holders and feel the sense of being in a tipsy little tavern filled with dreamers.
The former vibe, the former unity, the former community interactions and collective decision-making, when did they disappear? The slogan “Apes together strong” seems to be becoming more and more hollow, and the community watches as Yuga Labs keeps rushing forward on the path of acquisitions, coming up with small games accompanied by new assets (Otherside was cool, but what happened after that…). On the business side, Yuga Labs has been expanding, but what it has left for the community seems to be more confusion and loss.
Whether it’s building IP or developing games, these are new stories planned for NFTs after the rapid and dramatic value inflation in the first round. Although later on, NFT players became immune to these new stories and even scoffed at them, it’s not shameful—just like stocks, sometimes you can think that a company is telling a story -> delivering -> telling a new story, and what can be delivered is called value, and what can’t be delivered is called a bubble. Secondly, at that time, everyone was genuinely excited about the infinite possibilities of these NFTs and sincerely marveled at being on the wave of a new era—
According to Pudgy Penguins CEO Luca Netz’s “NFT Value Accumulation Funnel” theory, with 8,888 Pudgy Penguins, assuming there are 3 million loyal fans, just a 0.3% conversion rate would be enough to absorb them all. But NFTs are not securities after all, and under current regulations, it’s difficult for NFTs to directly distribute dividends to holders, no matter how profitable their physical businesses are. So, this fan conversion to the consumption of NFT “collectibles” still relies on being “cool.”
If BAYC wasn’t “cool” from the beginning, it wouldn’t have attracted a group of dedicated supporters. Who would want to support a project full of paper hands? Forgetting about being “cool” is actually abandoning the community and forgetting the original intention.
As “Whale of NFT” @jivacore, also known as “Guan Laoshi,” said, “Yuga Labs is like Supreme, it’s not cool anymore, as long as there is a tide, there will be a day of retreat.”
Among the voices of the BAYC community, the one that struck me the most was not the confusion or criticism from the big V’s regarding Yuga Labs’ recent acquisition, but this statement from @votefloridaman:
“The motto of ‘Degen Only’ has gone with the wind.”
We are about to endure the winter of NFTs and even the entire crypto market. As a practitioner who has always persisted in the NFT field, I have only one reason to continue:
NFTs are really cool and fun. We don’t lack good projects; we just lack good teams.
How to do it actually depends on how to think. Losing that excitement, is there really any difference between a big NFT project and a big but slowly declining “sh*tcoin” with images?
There will definitely be another bull market for NFTs, and it will definitely be the most attractive crypto asset for young people. For series like BAYC with high floor prices, people like me, who belong to the vast majority of ordinary NFT players, cannot afford them. So how can we attract the remaining 10% of players with purchasing power?
Yuga Labs may not have much time left to contemplate. This will be a race against the bull market.
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