Boring Ape’s decline continues, where should the NFT market break the ice?
As Boring Ape's decline continues, where should the NFT market innovate?Bored Ape Yacht Club (BAYC) is experiencing its biggest sell-off in history. In June alone, singer Huang Licheng sold at least 74 BAYC NFTs. According to on-chain tracking tool Nansen, many long-time BAYC holders have also been selling their NFTs, with 39 addresses holding BAYC for over a year now exiting the market.
The overall floor price of the Bored Ape Yacht Club NFT series has also been declining, with the floor price of BAYC falling below 30 ETH last week. On July 11th, the floor price of the NFT rose to 33 ETH, equivalent to about $62,000. Although this price is still expensive for ordinary people, the floor price of BAYC reached a peak of 153.7 ETH on April 30th, 2022, when the cheapest Bored Ape Yacht Club was selling for $430,000, or about 3 million yuan.
With the bursting of the NFT market bubble, Bored Ape Yacht Club has fallen from grace, and its market value has dropped from a luxury mansion to a low-end BMW 5 Series, with a price drop of more than 85%.
The huge price drop has caused great losses to the big buyers who once purchased Bored Ape Yacht Club at a high price. An NFT collector posted on WeChat Moments saying “I’m a big loser” and posted a picture of his Bored Ape Yacht Club, jokingly saying “I bought it for 118 ETH, let’s see when it drops to 18 ETH.”
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The most noteworthy losses are those of celebrities and business brands. During Bored Ape Yacht Club’s heyday, it was highly sought after by many domestic and foreign big shots, including basketball stars Curry and O’Neal, famous singers Justin Bieber, Jay Chou, and JJ Lin, who all showed off their Bored Ape Yacht Club NFTs.
In January 2022, Justin Bieber purchased BAYC #3001 for about $1.29 million, and now the highest bid for that NFT on OpenSea is only $61,000, which means he has lost more than $1.2 million. In May 2022, Meitu Group Chairman Cai Wensheng announced that he bought BAYC #8848 for about $560,000, and the highest offer for it now is only $61,000. In addition, Li Ning of China purchased BAYC #4102 for 120 ETH (about $356,000), and Greenland Group purchased BAYC #8302 for 140 ETH, both of which have now lost more than 80% of their value.
Justin Bieber lost more than $1.2 million on the purchase of Bored Ape NFTs.
As a leader in NFTs, the price of Bored Ape has continued to decline, a reflection of the darkest moment in the NFT market. According to NFTGO data, the total market value of the NFT market has fallen from a peak of $29.3 billion to $6.05 billion today, a drop of 79.35%. In the past month, 44.5% of NFT trading users have suffered losses, with only 46,000 making profits.
How will the NFT market break the ice?
Whales lose big money and small shrimps lose small money. The NFT market, which once had a huge wealth effect, has become a battlefield, with the difficulty of making money through NFT investment soaring.
On social media, along with the plummeting prices of NFTs such as Bored Ape, there are all kinds of ridicule and satire, with some calling it a “scam of trading pictures,” and others comparing it to the bursting of the tulip bubble. And in the Web3 field, NFT themes are no longer sexy, with few people discussing NFTs in various Web3 communities. “I still can’t understand where the value of these pictures lies,” said a crypto user who entered the circle in 2018.
As high-rise buildings rise and market capitalization rises, buildings collapse in the blink of an eye, and NFTs enter an ice age. In fact, NFT projects represented by Bored Ape have also made efforts, and NFT issuers have made a lot of attempts to make the value of NFTs more than just a picture, but everything is not very effective during the bear market.
Yuga Labs, the “manufacturer” of Bored Apes, has always been regarded as the most marketing-savvy brand in the industry. Bored Apes’ initial success was also due to its creation of the “club” concept, which made Bored Apes NFTs the “ticket” to the “rich people’s club.”
“Club members” not only have complete ownership of the Bored Ape NFT, but can also use it for commercial purposes, such as when Li Ning of China bought Bored Ape NFT and printed its image on clothing for sale; and the Web3 label under Universal Music Group created a virtual band using Bored Apes.
Chinese sportswear brand Li-Ning is using the Bored Ape Yacht Club (BAYC) NFT as part of its latest marketing campaign. The BAYC is a collection of 10,000 unique digital ape drawings, each with a different characteristic. Li-Ning has used a BAYC ape in its advertising campaign, and the image has been seen on billboards and other promotional materials across China. BAYC NFT holders also receive various airdrops, such as when Yuga Labs released a derivative series of mutated ape NFTs, which were airdropped to BAYC holders and Bored Ape NFT holders, with both groups receiving airdrops of the Bored Ape token (APE) later. For many BAYC holders, owning the NFT is a status symbol, representing the elite and trendy in the Web3 world. In addition, Yuga Labs has created the OtherSide metaverse, which provides virtual land to BAYC holders, and the company has designed a Temple Run-like game called Dookey Dash that requires a pass NFT to participate, but initially only BAYC and other Yuga series NFT holders could claim a free pass. It can be said that Yuga Labs has tried various means to add value to BAYC, but it has failed to prevent the decline in the price of Bored Ape NFTs. A senior NFT player believes that all of Bored Ape's attempts have failed to escape the old narrative of PFP (personal avatar), and that BAYC's core significance lies in its identity, with a lack of actual application value in all scenarios. Although Bored Ape has created its own games, metaverse, and other scenarios, they all have a relatively high threshold for funding participation, forming an invisible wall that isolates them from the outside world and makes it difficult to increase ecosystem vitality. Mao Shihang (Shen Yu), co-founder of Cobo Wallet, also recently stated that NFTs are in a state of bubble bursting and narrative logic restructuring. The next step for NFTs is to find new narrative logic and landing scenarios beyond the concept of PFP, perhaps combining NFTs with offline activities, such as combining with fan economy and membership rights, which "should bring in a lot of new users." From Shen Yu's perspective, making NFTs "useful," rather than just art or identity indicators, is one direction to break the current impasse.
Previously, Starbucks explored the "practical" route of combining NFT with membership benefits. Users can directly subscribe to NFT with a credit card in the Starbucks NFT market. NFT holders can participate in online coffee making teaching, subscribe to joint artist merchandise, and be invited to participate in exclusive activities such as Starbucks Reserve Roasteries. Currently, Starbucks has attracted more than one million members and partners to join.
In addition, some fans hope that NFTs can become equity tokens for star fans in the future, such as holding Jay Chou's fan NFT. They can enjoy priority purchase of concert tickets, and enjoy the benefits of close contact with stars. "When NFT has a scene that is connected to the real world, people will have the desire to buy and hold it."
In the view of the encryption and investment institution LD Capital, RWA equity-type NFTs may also become a breakthrough point for NFTs. RWA stands for real-world asset tokenization, which uses the immutability of blockchain to map real-world assets such as real estate, cars, and jewelry to the blockchain, generating corresponding digital assets with better liquidity and financial attributes.
Recently, a KOL in the encryption industry revealed that a borrower mortgaged a Patek Philippe watch to a third-party custodian company, and then the company issued an NFT representing ownership of the physical object. The borrower used NFT for on-chain mortgage lending, realizing the scenario of using real-world assets to borrow digital assets.
At a time when the NFT market is stagnant, the Web3 industry seems to need a new narrative to break the ice of NFTs.
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