Intellectual property is a powerful tool to give a sense of ownership to the original creator. Hence, intellectual property has to be well protected in the law. Oftentimes, small ventures lack the resources to effectively protect their intellectual properties or, in short, IPs. Even if the modern concept of intellectual property has evolved since the 17th century, primarily in Europe, intellectual property law could date far back. In medieval Europe, for example, guilds or associations of artisans were granted authority by the governors to regulate their respective industries.
NFT.NYC in late June was a great success. NFT.NYC is the largest and most respected conference for the NFT (non fungible token) industry. Amid a crypto currency crash, the NFT.NYC conference could have been a disaster. But, it received over 20,000 attendees. As some said, NFT.NYC grew into the Super Bowl of NFTs.
Out of the flood of party invitations for NFT.NYC, ApeFest, in its second year in the row, received the most attention. ApeFest only allowed people to enter, who hold Mutant and Bored Ape Yacht Club NFTs. the hottest NFT project in the world. From Times Square to Pier 17, where ApeFest was physically held, many familiar monkey faces bombarded on digital signages, posters, and social media platforms. ApeFest showed the true fandom culture of the NFT world. ApeFest was independently organized and could surpass the popularity of NFT.NYC soon.
The Bored Ape Yacht Club, or in short, BAYC, is a collection of 10,000 unique Bored Ape NFTs. They are digital collectibles living on the Ethereum blockchain. BAYC is one of the most successful NFT projects building upon the strongest community in the NFT space. BAYC is the brainchild of Yuga Labs, a venture-backed Web 3 marketing firm.
Yuga Lab is wickedly clever as it has created such a unique sense of exclusivity with 10,000 programmatically generated Bored Ape digital collectibles without any traditional marketing mixes. There was no advertising, search marketing, or extensive social media promotion.
Instead, BAYC harnesses the power of the community by connecting people together. Yuga Lab makes a BAYC brand to become a badge of honor and a clear symbol of social status in the crypto and NFT frenzy. BAYC NFT is an only pass for those who were brave enough to get on it early on and continues to possess it, which opens up a door to the exclusive community.
BAYC is a new threat to Disney as it is growing its influence as a global power house of new intellectual properties. BAYC was collectively worth $25 billion or about 12% of the market capitalization of Disney in May 2022. If someone purchases a BAYC NFT, then he owns the intellectual property rights that are tied up with his possession of NFT.
NFTs are yet highly speculative investments, but BAYC could be a good investment opportunity, not only due to the perks that come with ownership, but also a promising road map of its utility as a widely applicable intellectual property. Smart contracts could further accelerate its usage beyond the fandom community.
In only a few months since the initial BAYC release, BAYC soared. Many famous athletes have acquired BAYC NFTs. Soon after that, it was followed by multiple merchandise drops, including a collaboration with long-standing streetwear brands like the Hundreds. There have been many prestigious appearances of BAYC NFTs across multiple media outlets and also top art auction houses like Christies and Sotheby’s.
Now, BAYC characters are in the comic books, animations, soft drinks, coffee and ice cream franchises. It is yet hard to estimate the full valuation of licensed commercial activities of BAYC, but all we can tell now is that there shall be more monkeys popping up here and there in the coming years.
A NFT with character brand recognition will have future utilization across multiple mediums. When we think about a potential buyout of the intellectual property, BAYC’s insanely high price tag can be justified as it is valued based on projected revenue, not its so-called scarcity score card.
In June, the floor or entry-level price for a Bored Ape Yacht Club NFT fell below $100,000 for the first time since August 2021. It was down by 70%+ after Bored Apes launched and had approached nearly $429,000. It could further downplay for a while amid a crypto volatility, but directionally and emotionally, BAYC is heading toward long-term growth trajectory as its NFT commercial value continues to accrue.
Earlier this year, Yuga Labs, the creators of the BAYC and spin-offs the Mutant Ape, announced that it had acquired the intellectual properties of Larva Labs, which invented CryptoPunks. Yuga Labs also bought Meebits NFT collections. IP licensing models could greatly differ between different NFT projects. Yuga Labs’ licensing model allows a broader commercial use. Yuga Labs now encourages the third party and the community of creators to incorporate CryptoPunks and Meebits into their Web 3 projects.
Ultimately, the potential of what can be done with NFTs will be stated in the terms of licenses. Existing brands are likely to have longer and more complicated licensing processes to protect their most valuable core intellectual properties and maximize their bargaining power. Getting permission from Disney, for example, could take months to years. That’s how license business has been done for decades in the name of brand control.
Generative and new creative projects like BAYC are far more likely to have broader rights granted to their NFT holders powered by rapid contractual process under the original creator’s governing protocol. This concept would create a sea change in the world of intellectual properties.
Pairing the global recognition of the BAYC with individual NFTs that have their own recognizable characters and brands, could outpace the value of existing intellectual properties that are owned by large media companies. Fueled by its community fandom power, it won’t take too long to catch up with what decades old media companies have done.
Further relaxing the usage of intellectual property provides immense opportunities. The fandom community’s ability to get more actively involved will ultimately further seed new ideas and creative projects. Now, coupled with CryptoPunks and Meebits, Yuga Lab will further extend its proven marketing tactics to other intellectual properties powered by NFTs so that the use of NFTs could quickly evolve beyond the fandom community to create enormous mass market appeal and commercial success