In the 18 months since its launch of the wildly successful non-fungible token (NFT) project Bored Ape Yacht Club (BAYC), Yuga Labs has taught the nascent Web3 industry how to build a community around an NFT project and maintain that momentum despite market volatility.
Now it’s clear that Yuga Labs had much bigger ambitions to become a multi-tiered enterprise inspired by the creative thinking of animation studios like Pixar, by acquiring a handful of other character-driven NFT collections and creating virtual worlds where people can interact with them. To bring about this vision, Yuga raised $450 million in March led by venture capital firm Andreessen Horowitz (a16z), attaining a $4 billion valuation along the way.
“We see ourselves as like a creative-first company,” Solano said. “Our DNA is thinking of the things we want to do, then figure out the creative stories that we want to tell, and then we figure out how we’re going to do them and work back from there.”
What’s astonishing about Yuga’s growth, is how fast it has been. It was only back in Feb. 2021 that four friends – Greg Solano, aka “Gargamel,” Wylie Aronow, aka “Gordon Goner,” Kerem Atalay, aka “Emperor Tomato Ketchup” and Zeshan Ali, aka “No Sass” – set out to “join the club” of crypto by cofounding Yuga Labs when the idea of growing an online community around NFT profile pictures (PFPs) was still relatively nascent.
Aronow and Solano met in college and bonded over their shared interests in literature and gaming. What set the BAYC apart from other PFP collections, is the men’s ability to spin a narrative tale around the characters.
“That’s when we came up with Bored Ape Yacht Club. The idea was that it was this place for degenerates to go, right? Because that’s who we were,” Aronow and Solano told my colleague Jeff Wilser in September 2021.
Over the past year, the company has injected capital into growing its portfolio of brands:
its genesis BAYC project;
an evolutionary NFT project called Mutant Ape Yacht Club (MAYC);
a companion project called Bored Ape Kennel Club (BAKC);
CryptoPunks, a legacy NFT project that it acquired from Larva Labs in March;
Meebits, another NFT project that it acquired in the deal for CryptoPunks;
and its Otherside metaverse project, which is currently in its testing phase.
In November, Yuga Labs announced the acquisition of Beeple’s Web3 ecosystem WENEW and its flagship NFT project, 10KTF.
Their stream of steady product launches and high-value acquisitions has positioned Yuga Labs as one of the top NFT brands, with its product lineup consistently ranking among the top collections on top NFT marketplace OpenSea. Still, some have pushed back against the company as the “first NFT monopoly” in a space that is supposed to champion decentralization and individual ownership.
“I think the idea of a monopoly comes from people who don’t understand the impact we’ve had on the space in the form of decentralization,” Solano told me in an email.
The company has also grown its staff from 11 to 110 people, formalizing its leadership team by bringing on CEO Nicole Muniz, a childhood friend of Aronow’s who founded and managed a creative agency, as well as adding a chief gaming officer, vice president of product and vice president of communications.
Solano said that he and Aronow led the creative vision of Yuga since the early days, including all aspects of the creative and strategic processes, while Muniz has been key in building out the infrastructure of the company and helping it scale.
I sat down with Aronow and Solano at the Institute of Contemporary Art during Art Basel Miami, where they were celebrating the installation of the newly-donated CryptoPunk #305, the third NFT to enter the museum’s collection. While the event attracted leaders and influencers from the crypto and fine arts spaces, the founders appeared still to be navigating the “overnight celebrity” status they earned after their identities were leaked in a controversial piece by BuzzFeed News in February.
The two 30-somethings are proud and maybe even surprised that their passion project has exploded into such a cultural phenomenon, with celebrities like Snoop Dogg, Justin Bieber, Steph Curry, Eminem and Madonna, alongside thousands of other collectors, proudly sporting the cartoon apes designed by artist All Seeing Seneca as their profile pictures.
Yuga Labs was arguably the first NFT project to integrate previously niche concepts like using a flat price model, adding long-term utility, offering surprise airdrops, publishing a project roadmap and giving its holders full intellectual IP rights, allowing them to use the likeness of their characters for commercial purposes. This has paved the way for dozens of community-created projects and counting – including a California burger joint called Bored and Hungry, a beverage company called Ape Water and a music group called KINGSHIP made up entirely of Ape avatars.
“From Day One of the Bored Ape Yacht Club, the community has been empowered and encouraged to commercialize their NFTs. It’s core to why we’ve seen such rapid growth,” Aronow wrote me in an email. “This approach, while initially perceived as risky, has proved to be key to the company’s success.” Indeed, enabling BAYC owners to earn money from their PFPs may also be key to the community’s loyalty.
At the Web Summit conference in Lisbon in November, Muniz emphasized brand’s ability to turn previously passive consumers into owners of their own content. In recent months, this shift has been observed through an increase in NFT trademark filings and a growing number of IP licensing structures used across NFT projects.
Yuga’s rapid growth and community building efforts over the last year are in service to a much greater vision, the development of its ambitious Otherside metaverse project. As the co-founder describes it, Otherside will be an interoperable, gamified world-building platform that will turn NFTs into playable characters. “We see it as the platform for our communities and many other communities to come together,” Solano said.
Otherside, which blends mechanics from massively multiplayer online role playing games (MMORPGs) and Web3-enabled virtual worlds, sold 55,000 Otherdeed NFTs linked to virtual land ownership in April, raking in about $320 million. In July, Yuga organized its first tech demo for thousands of Otherdeed holders, which it dubbed its “First Trip,” giving the community a glimpse into the future where virtual identities are intertwined and owning an NFT is your key to unlocking the metaverse.
“We see Otherside as the intersection of a lot of these ideas,” Solano said. “It’s where we see the next evolution of the space going towards.”
“We wanted to create a truly co-developed, egalitarian metaverse that was fun,” Aronow added.
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