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Colossus (Invest Like the Best / Business Breakdowns)Podcast18 Nov 2021Source: joincolossus.comHost: Patrick O'Shaughnessy

Bored Ape Yacht Club -  [Web3 Breakdowns, EP. 1]

In plain words

This is about Bored Ape Yacht Club (BAYC), which isn't just digital art — it's a membership card that gives owners IP rights, community access, and profits. Guest Eric Golden (ex-Fidelity manager, BAYC holder) thinks NFTs are becoming a new asset class, with top-tier ones worth holding long-term. Key picks: BAYC (floor price ~$150K, project has made over $100M); CryptoPunks (seen as the 'gold' of NFTs, but creator retains copyright); Axie Infinity (a 'play-to-earn' game).

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Bored Ape Yacht Club (BAYC), as an NFT project and cultural phenomenon, derives its core value not only from rare digital art but also from building a strong membership community. Former Fidelity investment manager Eric Golden shares his motivation for owning a Bored Ape and analyzes the price tiers

~11 min full read · 10 sections
Deep Analysis

Bored Ape Yacht Club - Web3 Breakdowns, EP. 1

At a Glance

Guest Eric Golden (former Fidelity investment manager and Bored Ape holder) deconstructs the BAYC project from a holder's first-person perspective. BAYC's core innovation is not digital art, but rather enabling consumers to truly become "owners"—community members own the IP, participate in governance, and share in economic returns. This bottom-up brand-building model may reshape the relationship between creators and consumers.


Theme 1: The Essence of BAYC – From Digital Art to Membership Community

Eric Golden believes BAYC is not art, but a "membership card"

Golden describes his motivation for purchasing a Bored Ape: "This isn't just buying a piece of art to hang on the wall; it's a symbol of joining a community." He initially coveted CryptoPunks, but upon entering their Discord, he felt like an "imposter" — those members had been holding Bitcoin since 2010, whereas the BAYC community atmosphere was entirely different.

BAYC's narrative foundation is a fictional scenario: what would everyone do if they got rich from crypto investments? The answer is "build a cool bar and club to hang out with friends." This "blue-collar project" (starting at 0.08 ETH, roughly $200, compared to MeBits at about $8,000) attracted those who "wanted to be punks but weren't punks yet."

> "With my Ape, I could speak in a way that immediately got me into a circle of people I wanted to associate with and I wanted to learn from."

Readers should note: Golden is a BAYC holder, and his narrative reflects a holder's perspective, with descriptions of the community atmosphere potentially skewed positive.


Theme 2: Price Tiers and Rarity Distribution — From $200 to $2.7 Million

Golden notes that BAYC has formed clear price tiers, with rarity driving sub-communities within the group

Current price range (at the time of recording):

  • Floor price (cheapest): 35 ETH (approximately $140,000–$150,000)
  • Highest recorded sale: a "trippy" rare ape (trippy fur + crown + heart-shaped sunglasses) sold for $2.7 million
  • Some golden rare apes have bids exceeding 1,000 ETH

Rarity distribution:

  • 10,000 apes, 170 traits
  • Pricing curve: floor (common) → mid-tier → rare (steep upward slope)
  • Rare ape trades mostly occur within the community rather than on the OpenSea public market — because the buyer pool capable of spending $2.7 million on an ape is extremely small

Community phenomena created by rarity:

  • Sub-groups such as "Cheetah Gang" vs. "DMT Gang" have formed
  • A "Rare Apes Club" Discord has been established, with members being collectors holding large numbers or rare apes
  • These sub-groups serve as matchmaking venues for large transactions
Price Tier Current Range Characteristics
Floor ~$140,000–$150,000 Common traits
Mid-tier Hundreds of thousands of dollars Some rare traits
Rare Millions of dollars Extremely rare combinations such as golden fur, crown, etc.

Theme 3: Economic Model – Airdrop Mechanism and Brand Monetization

Golden argues that BAYC has achieved "holders as beneficiaries" through airdrop and royalty mechanisms

Airdrop Mechanism:

  • Each original holder received a Serum for free, which could be combined with their Ape to generate a Mutant Ape
  • Serum value: $15,000–$60,000 (on the day of the airdrop)
  • Previously, Bored Ape Kennel Club dogs were also airdropped, valued at approximately $15,000–$20,000
  • Early holders have already recouped their initial investment through airdrops

Revenue Sources:

  • Secondary sale royalties: 2.5% per transaction
  • Since its launch in April, total trading volume has exceeded $1 billion, generating over $100 million in revenue for the project
  • The second sale (Mutant Ape) raised approximately $90 million

Brand Roadmap 2.0:

  • Ape Fest New York: Chartered a Hudson River yacht for a gathering of thousands
  • Physical bar (potentially located in Miami) — "this meme is becoming reality"
  • Game (speculated by the community)
  • DAO governance mechanism

Golden emphasizes: "With no venture capital, they have built a balance sheet exceeding $100 million solely through their community."


Theme 4: IP Ownership — The Evolution of Three Frameworks

Golden outlines three models of IP ownership for NFT projects

Model 1: Creator retains copyright (Larva Labs / CryptoPunks)

  • The creator holds the copyright and licenses it to holders for use (capped at approximately $100,000 in value)
  • The creator can independently enter into partnerships with entities such as Hollywood

Model 2: IP belongs to the holder, brand belongs to the creator (BAYC)

  • Holders own all IP rights to their individual ape
  • BAYC retains the brand logo and the "Bored Ape" name
  • Holders can: use their ape for clothing, start a beer company, open a coffee shop
  • Holders cannot: use the BAYC logo for merchandise

Model 3: Fully decentralized

  • All IP belongs to the community, with no restrictions

Real-world example: When someone copies an ape, the community spontaneously defends the rights on Twitter ("They are impersonating me"); meanwhile, CryptoPunks once successfully requested OpenSea to delist a mirror-flipped project.


Theme 5: Valuation Framework — From Speculation to the Formation of a New Asset Class

Golden acknowledges that current NFT valuation is "extremely difficult," but three investment logics are emerging

Current valuation methods:

  • No DCF; instead, relative value comparison is used: BAYC vs CryptoPunks vs digital art (e.g., Ringers)
  • The core is "intangible assets" — Golden admits: "As a former fund manager, I know how hard it is to put intangible assets on a balance sheet, but we don't have a better measurement tool."

Three investment paths:

Path Logic Risk
Long-term holding of blue chips Betting on Web3 and NFTs becoming mainstream entry points, holding for 10-20 years Directional judgment error
Market making/arbitrage Current BAYC bid-ask spread is approximately 5-70 ETH ($20,000-$30,000); low liquidity but large arbitrage opportunities Insufficient market depth
Speculation/lottery Chasing new projects, similar to daily fantasy sports High risk; requires funds that can afford losses

Key judgment: "I believe we are witnessing the formation of a new asset class."


Theme 6: Infrastructure – Ethereum as the Primary Chain, Others as Supplements

Golden believes that blue-chip NFTs will remain on Ethereum permanently, while utility NFTs require other chains

Ethereum's position:

  • All "blue-chip long-term assets" (Glyphs, Punks, Ringers, X Copy) are on Ethereum
  • High-value NFTs (six to seven figures) should remain on Ethereum

Applicable scenarios for other chains:

  • Solana/Matic: Low cost, high-frequency transactions (e.g., Zed Run's horse racing NFTs, with 10–20 races per day)
  • Flow (NBA Top Shot): Zero transaction fees, supports credit cards, but currently operates in a closed environment

Decision framework:

  • Creating "once-in-a-lifetime" high-value NFTs → Ethereum
  • Creating utility NFTs such as one-time event tickets → Solana or Matic (to avoid gas spikes impacting user experience)

Mentioned Positions

Position Guest Stance Key Data
Bored Ape Yacht Club Bullish (holder perspective) Floor price 35 ETH (~$150K); highest sale $2.7M; project revenue over $100M
CryptoPunks Neutral (as a benchmark) Viewed as "the gold/Treasury bond of the NFT space"; Larva Labs retains copyright
MeBits Neutral Issue price ~$8,000; "culture war" with BAYC
CyberKongs Bullish (innovative model) Pioneered "hold-to-mine" — holding NFTs earns tokens, tokens can be used to mint the next-tier NFT
NBA Top Shot (Dapper Labs) Bullish Zero transaction fees, supports credit cards; Flow chain, currently a closed environment
Axie Infinity Bullish (trend) Represents the "Play-to-Earn" gaming model
Zed Run Neutral 38,000 horses, 10-20 races per day; uses Matic/Polygon

Judgments Worth Remembering

1. "Your ape is your Amex Black Card" (as Gargamel put it) — one of BAYC's co-founders. A community member later actually produced a physical black card printed with their own ape. This reflects the community's "bottom-up" innovation vitality.

2. NFT valuation cannot rely on traditional DCF; only relative value comparisons are feasible (Golden) — He views CryptoPunks as "gold/treasury bonds," with the price ratio of BAYC to Punk serving as the core reference frame. Currently, there is a lack of accounting tools to measure intangible assets.

3. BAYC's three IP frameworks mark a watershed moment for the NFT industry (Golden) — From Larva Labs retaining copyright, to BAYC granting IP to holders while retaining the brand, to full decentralization. This determines holders' commercial rights and the project's revenue model.

4. The airdrop mechanism allows early holders to "recoup their investment" (Golden) — Each original holder received $15,000–$60,000 in value from the serum airdrop, plus the earlier dog airdrop ($15,000–$20,000), covering the initial investment. However, Golden warns this model is unsustainable and risks devolving into a Ponzi scheme.

5. "Consumers feeling like owners" is the core breakthrough of Web3 (Golden) — Bypassing venture capital and intermediaries, creators connect directly with consumers. He cites Taylor Swift as an example: in theory, she could bypass intermediaries like Ticketmaster and Live Nation to interact directly with fans.

6. NFTs are evolving from pure speculation into three types of investment assets (Golden) — Long-term holding of blue chips, market-making arbitrage, and speculative lottery tickets. Currently, bid-ask spreads reach $20,000–$30,000, with poor liquidity but significant arbitrage opportunities.

7. Blue-chip NFTs will remain on Ethereum forever, while utility NFTs require other chains (Golden) — High-value (six to seven figures) NFTs use Ethereum; one-time event tickets use Solana/Matic to avoid gas fee spikes.

8. BAYC's "bottom-up brand" model could reshape commerce (Golden) — Community comes first, then the brand, with community members spontaneously creating value (black cards, sub-groups, commercial collaborations). This is the complete opposite of the traditional path of "product first, then distribution."