Planet of the Apes
Making sense of the NFT craze
Go ahead, download this image. It’s free.
To truly ‘own’ this image though, you have to fork out a small fortune — roughly the cost of a brand-new Toyota.
The only difference? A string of numbers and letters on a distributed ledger saying that this image is yours, certifying this image as a non-fungible token or NFT.
This is a project called MAYC or Mutant Apes Yacht Club — a spinoff project from Bored Apes Yacht Club — that launched three days ago. As of today, MAYC already did close to $200M in sales. Each ape picture costs $20,000–300,000, and they are flying off the shelves. The apes are taking the world by storm. We are living in the planet of the apes.
While primates remain the most popular, there have been all sorts of animal derivatives — penguins, lions, cats, dogs, koalas, you name it. Everyday you see new projects like this spring up, raising millions of dollars from nothing more than a set of computer-generated images.
Is the NFT craze a harbinger of a new era in art and culture, or is it the mother of all bubbles? Only time will tell. What we know for certain is that the world has irrevocably changed. It is insanely difficult to change consumer expectations — old habits die hard, and we are wired to respond to certain trigger buttons programmed across generations of natural selection.
And yet… in such a short span of time, NFTs have completely upended our standard notions of value, ownership, and creation.
Why? What is so special about them? Last week I went deep into the NFT rabbit hole to find out, and I’ve been utterly consumed since then.
This headline from Fortune attempts to explain why.
Rolexes and Lamborghinis are so yesterday. NFTs are the new digital ‘flex’
Owning certain NFTs ’ give instant cachet in this increasingly virtual world. Human beings have a natural inclination to show off. In the absence of doing that in the ‘meatspace’ real world due to the pandemic, people are finding new ways ‘flex’ online using their NFT collections and profile pictures.
A coveted NFT profile picture like Cryptopunks or Bored Apes can be an even stronger flex than a Rolex or a Lamborginhi. You don’t just wear or drive it; the NFT is your face and your identity online.
The NFT also serves as a signal that you are part of an ‘in-group. It acts as a membership card that gives the owner access to exclusive clubs communities in the virtual realm. It is a new means to network and connect with like-minded people. With an NFT, you can participate in this new social game.
Speaking of games, the whole experience of buying, bidding, owning, and selling NFTs itself feels like a big game. There is a thrill of catching an NFT with a particular set of rare attributes. It feels almost equally exhilarating to put up your NFT for sale at a target price and to have someone pick it up. Some people are making 10x, 100x, or even 1000x returns trading JPEGs, causing massive FOMO in the market. It’s like stocks on steroids, and it scratches the betting itch that people may have.
There are of course the collectors who truly care about the art, the new digital patrons who see NFTs as a new way to support artists and connect with creators. For the NFT revolution to truly blossom, it will ultimately depend on these stalwarts. Without them, this craze could devolve into a speculative game of musical chairs that could go out of hand and implode.
The big prize for NFTs is the metaverse — the next phase of the internet. Buying an NFT is a gamble that we will one day spend most of our days as digital avatars in a virtual world. It is a bet that people will want to own the coolest digital representations of themselves and be willing to spend top dollar for it.
With the rise of NFTs, the world starts to feel even more like a video game. Lines are getting blurrier between the real world and the virtual world, just as the line is also getting thinner between stuff that cost nothing and stuff that cost a fortune. None of this make sense on the surface, but when we see NFTs as digital Rolexes, fancy casino chips, and memberships to an exclusive clubs, it starts to make a little more sense. The art itself in the image is almost just a bonus.
It will be interesting to see how this space evolves. Now back to browsing Opensea for the next NFT I could ape into.
