NFTimes Volume 11 – $400 Million From One NFT Mint?

In the last edition of the NFTimes we covered a few massive moves made by Yuga Labs over the past 2 weeks.

And they weren’t done.

Yuga is the startup behind Bored Ape Yacht Club, the ultimate blue-chip NFT collection. Little did we know when we wrote our last article that the Club would drop important news only a few days later.

Before Yuga could make their market-moving announcement, a pitch deck it created to lure new investors was leaked to The Block. It disclosed that the startup was about to launch a metaverse gaming ecosystem called MetaRPG.

A few days after the leak, it dropped a teaser video for the project on Twitter.

What is MetaRPG?

At the foundation of MetaRPG is what will be the largest NFT sale of all time.

The game will be similar to two of the most popular metaverse games right now, The Sandbox and Decentraland. It will be an inordinately big virtual world, split into 200,000 parcels of land.

There will be one sale in March of 100,000 plots, with the other half scheduled to sell in August.

Yuga Labs is also planning on launching another 10,000 NFT generative collection called Kodas tied into the land sale. One of these adorable little creatures appears in the teaser video above, flying off with the Bored Ape. We don’t know all the specifics yet but it seems like there will be a small chance to get a Koda trait on a piece of land. Holders with those plots will likely be able to claim a Koda as a separate NFT for free.

In their pitch deck, Yuga estimated the land’s price tag at 1 ETH each but some figures it has since released suggest a lower price of 0.6 ETH. If 0.6 or 1 ETH is the final price it will raise an absolutely whopping $360 million or $600 million respectively.

What will the startup, with about 60 employees, do with this huge fortune?

Well to begin with, it will use some funds to build MetaRPG. The game is already in development with the help of one of their backers, Animoca Brands. Animoca is one of the largest crypto venture capital funds, with billions of dollars invested into various projects.

Even if Yuga gets an AAA game studio to build this, it will probably cost $80 million–at the most. What will it do with the $320-520 million left in their coffers after the sale? It’s anyone’s guess, but a significant portion will probably end up in the pockets of the founders and investors.

How Will MetaRPG Impact the NFT Market?

This massive new metaverse game has widespread appeal and publicity. Bored Apes is one of the few NFT collections that is recognizable by the general public. The biggest downside to this project is the enormous cost. If the pitch deck is accurate, each sale will remove 100,000 ETH from the NFT market as a whole and send it straight to Yuga.

It’s hard to figure out if the sales will have an overall positive or negative benefit on the market. The game might bring in a ton more liquidity to the market by attracting new NFT investors. However, the two biggest existing games with a similar concept, The Sandbox and Decentraland, only have about 5,000-15,000 daily active users each. In contrast, top video games like League of Legends have 2-3 million users who play every single day.

This is unattainable for an NFT game with such a small community, but if Yuga Labs can get even a tenth of League’s numbers it would be monumental for the entire market. If it doesn’t, it’s completely possible that the sale becomes a harbinger of an NFT bear market, especially if the game doesn’t come out for a while.

There are also some less apparent (but possibly severe) consequences. Yuga Labs’ acquisition of Cryptopunks and Meebits already had a significant effect on the high-end of the market: now the 2 most valuable blue-chip NFT collections, BAYC and Punks, are controlled by a single entity.

If MetaRPG succeeds in becoming the main metaverse where different projects come together, Yuga will have even more power. If the marketplace ends up being a competitor to OpenSea it could continue to eviscerate the decentralization of Web3, and with it, the NFTs that we love.

Doubts on the Details

Will this be exactly how Yuga Labs rolls out the project? Almost certainly not.

One of the founders who goes by the pseudonym Gargamel (Greg Solano) rebuffed the pitch deck in the BAYC Discord soon after it leaked.

We don’t know whether he said this because it’s true or if he is just trying to discredit the community’s worries about the price and scale of the land sale. It was a confusing update to be sure. If the core team never saw this deck it’s unlikely that it was shown to investors.

So if investors didn’t get it, how did it leak? We’ll probably never know.

ApeCoin, the Token Launch of the Century

We also learned a bit about the new BAYC ecosystem token, ApeCoin, in the pitch deck. Soon after the deck was leaked, the ecosystem info was officially announced and released the next day.

The token doesn’t have any utility yet, but it could easily become the largest metaverse cryptocurrency when MetaRPG is finished, with a marketplace where we can trade items and possibly NFTs with ApeCoin.

The Yuga labs team designed the ApeCoin drop to build as much fear of missing out (FOMO) and hype as possible going into the launch. (They only gave people less than 24 hours to prepare after the announcement.)

Yuga’s tactics worked brilliantly. It started trading at about $20, but only because there was extremely little liquidity available. It immediately dipped to $6 and then steadily climbed to a peak of about $17.80. This was a pretty absurd price because it has a billion token total supply, and since then it has been mostly steadily falling.

Yuga Labs has a long way to go if they are to deliver on all the promises they have made. ApeCoin could still drop in the short term, but if most of those items are delivered it could become a top 30 (by market cap) crypto.

Do you want to understand the NFT market better? Check out some of Henry’s other articles to learn more!

Here are a few of our favorites:

Want to keep up with Henry and NFTs 24/7? Join him in AlphaMint’s dedicated NFT Discord server.

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