Yuga Labs is now the biggest brand in NFTs, but according to its $450 million financing round this week, it may soon be the greatest name in the metaverse.
Yuga’s most recent financing round, led by venture capital powerhouse Andreessen Horowitz, upped the company’s valuation to $4 billion. However, what Yuga aims to achieve with all that money may be just as dramatic: alter the metaverse’s still-forming reality.
To recap, Yuga was the company that gained fame in late 2021 and early 2022 as NFT fever grew, culminating in celebrity NFT investments from NBA legend Steph Curry and music superstar Justin Bieber. They, like hundreds of others, own Yuga’s trademark Bored Ape Yacht Club NFTs, the cheapest of which is now worth more than $300,000.
Yuga recently conducted an “airdrop” of a special cryptocurrency token called ApeCoin, which was issued by a decentralized autonomous organization, enhancing the already large firm’s size (DAO). Despite being technically separate from Yuga, Bored Ape NFT users got thousands of free ApeCoins and discovered they now owned an asset worth tens of thousands of dollars in the real world. ApeCoin’s value increased by up to 90% on its second day of trading.
Yuga wants to take the logical next step of allowing the Bored Apes to socialize in the sequel. And what better location than the metaverse to do so?
Soon after the launch of ApeCoin, Yuga Labs announced a metaverse platform titled Otherside.
Although few specifics and release dates are available for the project, Wylie Aronow, aka Gordon Goner, told the Verge that he sees a multiplayer role-playing game and “a linked world” that will be “player-run.”
According to a leaked presentation deck that has been circulating in crypto communities on Reddit and Twitter and seems to have been prepared by Yuga, the company is already preparing to exploit a hypothetical metaverse platform to reward its existing members. Yuga Labs wants to develop 200,000 plots of land, with 30% of the first 100,000 plots reserved for existing members of the Bored Ape Yacht Club and Mutant Ape Yacht Club.
According to Ramon Govea, founder of intellectual property creation business Myth Division and owner of seven Bored Apes, the prospect of free land has already sparked excitement in the Bored Ape community.
“Owning virtual real estate is a viable path for wealth building when you’re aligned with a company that is focused on infrastructure first,” Govea told Fortune. “Whatever is on the Otherside, as ApeCoin holders, we have an opportunity to define it.”
A ready-to-go metaverse community
Yuga Labs’ Otherside metaverse project will join an increasing number of metaverse platforms, which include NFTs and cryptocurrencies.
The Sandbox and Decentraland have grown in popularity as Web3 metaverses. Both of them make use of NFTs, which enable users to acquire land and in-game assets such as avatar apparel that are technically theirs, not the platforms. Each also has its coin.
Yuga Labs, on the other hand, has an advantage when it comes to developing a metaverse platform for the brands in its portfolio.
Yuga Labs currently controls four significant NFT collections: Bored Ape Yacht Club, Mutant Ape Yacht Club, Meebits, and CryptoPunks, after it acquires the Meebits and CryptoPunks NFT collections earlier this month. Each of these NFT collections has a loyal following, which may be the difference between Yuga’s metaverse being a thriving metropolis or a barren wasteland.
To attract users, the Sandbox collaborated with well-known brands such as Adidas, Warner Music Group, and Atari, while large organizations like JPMorgan Chase and Samsung developed virtual zones in Decentraland. These firms are all looking for their own metaverse communities, but Yuga, it is believed, already has one built-in.
Despite this, Sam Hamilton, the creative director of Decentraland, asserts that Yuga Lab’s entry into the metaverse presents no threat to his organization.
“We have collaborated in the past and I love their team, really cool people,” Hamilton told Fortune. “We don’t see other Metaverses as competition, we are all building the next iteration of the internet collaboratively, together, and having BAYC building can only be good for everyone!”
The metaverse may be rife with wealth inequality
The metaverse of Yuga Labs will be available to everybody, not just members of the Bored Ape Yacht Club. Additionally, it will allow owners of numerous NFT projects to appear in the game.
This enables users who do not own–or could not afford–NFTs from Yuga’s top collections to access them. For example, some of the top Bored Ape NFTs have sold for millions of dollars. While some Bored Ape owners may have bought in while prices were low, the most are beyond of reach of the average person.
As a consequence, a metaverse in which you identify as a high-priced NFT may create an inequitable environment for those who cannot buy a “blue chip” NFT.
NFTs already possess a kind of social capital when they operate online. When navigating through Twitter, you’ll see thousands of accounts with hexagonal profile images featuring cartoons and other NFT visuals.
According to Gmoney, a well-known NFT collector who created his own blockchain-based NFT game called Brick Breaker, there is a certain amount of “flex utility”—or social status—associated with belonging to one of these prominent collections, such as Bored Ape Yacht Club or CryptoPunks.
That is why, as he tweeted in January 2021, he spent a six-figure sum for his CryptoPunk NFT No. 8219.
“With an NFT, by posting it as my avatar on Twitter and Discord, I can quickly ‘flex’ with a picture… It has the same effect as wearing that Rolex in real life, but digitally.”
Numerous people have obtained NFTs for the same reason and subsequently refused to sell them, regardless of the amount of money they might make, due to the symbolism of the NFT and their online identity.
Gmoney asserts that this culture will undoubtedly infiltrate the metaverse as well.
“There will be biases that exist in the metaverse based on someone’s avatar, just as there are biases that exist in the real world,” he said.
He thinks that people will interact with the metaverse in the same way they interact with the actual world, for example, by wearing a Rolex to dinner or sharing a snapshot of it to impress friends.
“Whether we’re seated in front of a computer screen or conversing with someone face to face,” he observed.