When Yuga Labs announced the acquisition of the development team PROOF from Moonbirds, there was almost no doubt about Yuga Labs being the "LVMH of NFT". Now, Yuga Labs owns top NFT IPs/projects such as CryptoPunks, BAYC, MAYC, BAKC, "Monkey Land" Otherdeed, Meebits, and Moonbirds. These projects occupy 8 seats in the top 15 projects by trading volume in OpenSea's history.

However, at the same time, Yuga Labs has also encountered its strongest challenger ever. On February 17th, the floor price of Pudgy Penguins surpassed that of BAYC. In contrast to Yuga Labs' continuous progress in acquisitions in recent years, the appeal of "boring apes" is constantly fading.

We can't help but ask, why? Why did Pudgy Penguins win the favor of the market? Why did "Bored Apes" lose their charm?

"Project teams are doing things" is not sarcasm, NFT players are actually very tolerant

'Buying the dip is justice' is a widely circulated phrase among NFT players, and has even become one of the justifications for criticizing toxic NFT players. Another popular phrase among Chinese-speaking NFT players is 'the project team is doing things', which is often joked about as the most feared thing for project teams, as the more they do, the more NFT prices fall.

However, the success of Pudgy Penguins actually proves that many project parties who claim to be "doing things" in the past were actually moved by themselves or stayed in their comfort zone. The so-called "doing things" cannot provide holders with a clear view of the project's long-term strategy, nor can it bring long-term value to the project.

During the previous bull market of NFT, every PFP project claimed to be doing IP. But what did we see? Most of them just released new series, tokens, and engaged in staking, staying in their own comfort zone and competing with each other in the familiar Shiseido incentive system in the Web3 world. In fact, creating IP is a long-term project, and teams starting from Web3 are often only good at operating within the NFT or Web3 community. When a project successfully raises funds from dreamy retail investors, how many of them actually spend the money on hiring professional talents for brand construction, content creation, and social media operation?

Is it fair to manipulate prices? Yes, even the rise of floor prices is the biggest source of emotional value for NFT players. I don't know if there is a market maker behind Pudgy Penguins, but I believe most people think the answer to this question is "yes". Can price manipulation alone bring Pudgy Penguins such huge success?

Cannot. Such success requires the value recognition of market makers and retail investors. The logic behind Pudgy Penguins' IP development is reasonable. They have established a matching brand concept for their cute and lovable image, and have achieved good results by choosing toys as a breakthrough point based on their image characteristics. These efforts, combined with the rise in floor prices, have not only solidified their community, but also formed new value recognition among the NFT player community.

"A NFT project that does things well, it really can increase in value."

Whether a narrative has logic or not depends on whether the market approves of it. Therefore, we can also see that Doodles, which was previously criticized heavily, has risen by nearly 70% in the past month. Is there any good news? No, the latest news is about a collaboration with G-SHOCK to release a watch, but Doodles has been "doing things" all along.

Cool Cats has also started "making toys", so in the past month, Cool Cats has also gained a similar increase as Doodles.

On the road of doing IP, Pudgy Penguins can only be said to have had a good start, but they have already had such amazing performance in the NFT market. NFT players are actually very tolerant and not toxic at all.

"As long as it's a tide, there will be a day to recede"

The floor price of Pudgy Penguins has surpassed BAYC, which is considered a historic moment by many players. In fact, many NFT players are not surprised and have their own perspectives to explain why they think this historic moment is actually a "necessity". But for me, the answer to this question is actually very simple:

"Yuga Labs is no longer cool."

BAYC, or Yuga Labs, do they still remember the way they came? I'm not saying they forgot that they are an NFT project, I'm saying, do they still remember the excitement of "I want to do something cool" when they were doing BAYC, and forget that idealism?

"Let's make a NFT", everything started with this sentence from Greg Solano, one of the co-founders of Yuga Labs.

"Roaming in the secret club in the swamp, exclusive to primates. And graffiti on the collaborative pixel board on the club's bathroom wall." This vibe attracted me, who couldn't afford BAYC at the time, to find ways to observe the group of BAYC holders and feel like being in a drunken tavern filled with idealists.

What happened to the once vibrant vibe, unity, community communication, and collective decision-making? When did they disappear? The slogan "Apes together strong" seems to be increasingly hollow, as the community watches Yuga Labs sprinting towards acquisition, pulling out one small game after another accompanied by new assets (Otherside is cool, but what's next...). In terms of business, Yuga Labs has been expanding, but what seems to be left for the community is more confusion and loss.

Whether it's IP or games, these are all new stories planned for NFT after the rapid and intense value inflation in the first round. Although later on, NFT players became immune to these new stories and even sneered at them, it's not shameful - just like stocks, sometimes you can think of a company as telling stories -> delivering -> telling new stories in a cycle, only what can be delivered is called value, and what cannot be delivered is called a bubble. Secondly, at that time, everyone was sincerely excited about the infinite possibilities of these NFTs and sincerely exclaimed standing on the wave of the new era -

"Cool!"

According to Pudgy Penguins CEO Luca Netz's "NFT Value Accumulation Funnel" theory, assuming that there are 3 million loyal fans among the 8888 Pudgy Penguins, they can be fully absorbed with just a 0.3% conversion rate. However, NFTs are not securities, and regardless of how high the profits of the physical business operations are, it is difficult for NFTs to directly distribute dividends to holders under current regulations. Therefore, the conversion of these fans to consume NFT "collectibles" still relies on being "cool".

"The NFT Value Accumulation Funnel" Theory.

If BAYC wasn't "cool" from the beginning, it wouldn't have attracted a group of loyal supporters. Who would want to lift up a project full of paper hands? Forgetting about being "cool" is actually abandoning the community and forgetting the original intention.

As "Teacher Guan" of the NFT whale, as @jivacore said, "Yuga Labs is like Supreme, not cool anymore. As long as it's a trend, there will be a day when it fades away."

What impressed me the most about the BAYC community's voice was not the confusion or criticism from those big V's regarding Yuga Labs' acquisition, but rather this sentence from @votefloridaman:

"The motto 'Degen Only' has passed with the wind."

Conclusion

We are about to survive the winter of NFT and even the entire cryptocurrency market. As a practitioner who has been persistently working in the NFT field, the only reason why I can hold on is perseverance.

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