Everyone knows that NFT is cooling down, but to what extent?
On OpenSea, the largest NFT marketplace in the world, the monthly sales of Ethereum-based NFTs and Polygon-based NFTs in September dropped to the lowest level this year, reaching $74 million and $5 million respectively, a 30% decrease from the peak in February.
Ethereum and Polygon are the top two blockchain networks in terms of NFT issuance, and now the NFT markets of both ecosystems have cooled down to freezing point. The ones who can feel the cold the most are the NFT issuers. Yuga Labs, which was already hit hard by the recent wave of bored apes selling off, couldn’t sit still anymore.
On October 6th, Yuga Labs announced a team restructuring, and its NFT projects Meebits and 10KTF will be integrated into the metaverse gaming platform Otherside, and corresponding layoffs have already begun.
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“We have already endured a lot of pressure internally.” Yuga Labs CEO Daniel Alegre sounded discouraged in the restructuring announcement, and he pointed to a way out, “While Yuga Labs needs to refocus, we also need to actively collaborate with more external partners.”
This company, which has acquired several leading NFT projects in order to build blue-chip NFTs, has decided to focus on the gaming field. This year, the company created the game “Dookey Dash” with the “bored apes” IP, which attracted a large number of traditional esports players at one point.
After testing the waters in the gaming industry, Yuga Labs probably saw an opportunity to break through the NFT ice and decided to launch more games and entertainment experiences based on Otherside in 2024. With restructuring and betting on games, where can Yuga Labs’ NFTs find a chance to turn profitable?
Layoffs and restructuring in the selling-off market
As of October 7th, the floor price of CryptoPunks is 43 ETH, which is a more than 65% decrease from the floor price of 125 ETH at the end of August 2021; bored apes (BAYC) is even worse, with the current floor price of 26.99 ETH shrinking by 82.4% compared to a year ago.
Yuga’s multiple NFTs have decreased in value by 60-90% from their historical highs
From the current market situation, after a brief period of prosperity, the NFT industry has experienced a bubble burst. Some well-known holders, such as singer Huang Licheng, sold a large number of NFTs including bored apes in a short period of time, causing drastic price fluctuations in the market.
With its own unfavorable situation and no signs of the overall market warming up, Yuga Labs’ restructuring seemed inevitable.
In the restructuring announcement, Alegre pointed out Yuga Labs’ successful projects this year, including the highly anticipated game Dookey Dash, TwelveFold, and collaborations with BAPE and Gucci. However, he admitted that some product launches did not meet expectations.
What will be the focus of operations after the restructuring?
Alegre outlined three clear directions: community growth and interaction with brands; unique initiatives in gaming, entertainment experiences, and interactive social activities centered around Otherside’s strategy; and focusing development efforts on a few core areas and continuing to build complementary long-term partnerships.
“Community growth” seems to be the top priority. It is not surprising that Yuga Labs, as a leading issuer in the NFT market, owes its success to its flagship and star project, Bored Ape Yacht Club (BAYC), and the huge player market it brings with its NFT series.
Recently, the topic of “declining vitality of the BAYC community” has been hotly discussed on social media, and Alegre has also noticed these public opinions.
In response, he said that Yuga Labs is well aware of the importance of the “early BAYC atmosphere” and promises to continue to maintain this energy, striving to start with the upcoming ApeFest in Hong Kong. In addition, the restructured team will support the expansion of the Made by Apes IP tool and other projects, thereby empowering club members worldwide and continuing to cultivate community culture and creativity.
Yuga Labs acquired another NFT ace IP, CryptoPunks, and has also expressed its commitment to continue investing resources in this NFT series, consolidating and showcasing its legacy in the field of crypto art. The specific approach is through education (including the upcoming book), improving and simplifying the app, and providing more high-quality experiences.
The restructuring news may appease the community’s anxiety, but the shadow of layoffs has already loomed over Yuga Labs. Although the company has not disclosed specific numbers, according to subsequent tweets from Greg Solano, co-founder of Yuga Labs, the number of employees after the restructuring still exceeds 120. Alegre also stated in the letter that the transition plan for departing employees includes generous severance pay, COBRA medical insurance coverage, and assistance in finding new job opportunities.
Deeply integrating own NFTs into the gaming track
After the layoffs and restructuring, with the clear direction of the team’s efforts, Yuga Labs’ most important move is now directed towards its metaverse gaming platform Otherside, where the teams of two less popular NFT projects, Meebits and 10KTF, have been merged into.
According to the official website, Otherside is a metaverse gaming platform that Yuga Labs is currently developing. The platform revolves around the GameFi concept of “Play To Earn” and combines the mechanics of large-scale multiplayer online role-playing games (MMORPGs). Users can view it as a metaRPG platform within the metaverse space, where thousands of people can interact online simultaneously. Unlike traditional RPG games, these player characters are represented by the NFTs they hold.
Yuga Labs has long been betting on the gaming track through Otherside.
As early as April this year, Alegre, the former Blizzard executive, stated that NFTs still have a bright future because they are the key to the world of gaming, events, and e-commerce. Obviously, Otherside is the lock that matches Yuga Labs’ “key”.
On March 25th of this year, Yuga Labs conducted the second voyage test of Otherside, with approximately 7,200 participants, significantly more than the 4,000 participants in the first voyage.
In the first voyage, navigators can participate in various game activities such as free movement, sending emojis, sprinting, dancing, completing aerial flips, or showcasing their NFT holdings and experiencing private live broadcasts.
Otherside is also a platform deeply integrated with Yuga Labs and its NFTs. The platform has a total of 200,000 NFT plots named Otherdeeds. On May 1, 2022, Otherdeeds was first opened for minting, and 100,000 plots have already been sold out.
Among these 100,000 plots, 10,000 were directly allocated to BAYC holders and 20,000 to MAYC holders. Similar early-bird benefits include all BAYC, MAYC, BAKC, and CryptoPunks holders receiving 3D models that match their NFTs when the game is released, which can be used as characters in Otherside’s game.
Yuga Labs has launched the public beta of Legends of the Mara.
On September 26th, Yuga Labs also released the public test of the 2D strategy game Legends of the Mara (LOTM) on Otherside.
If Otherside is a grand blueprint in the making, then Yuga Labs has already tasted some success in expanding the gaming attributes of their own NFTs.
In March of this year, Yuga Labs launched a game called Dookey Dash for BAYC holders. This game, similar to “Temple Run,” attracted participation from traditional esports players due to its high prize money and quickly brought temporary popularity to BAYC and related token APE.
After developing games with their own NFT IP and receiving positive feedback, Yuga Labs officially stated that the Otherside team will establish a new gaming experience through third-party partnerships in 2024.
Breaking the Ice for NFTs Requires Breaking the Circle
Regarding the current trend in the NFT industry, some industry insiders have pointed out that the narrative of PFP (Profile Picture) representing identity has become outdated, and NFTs need new stories. Therefore, Yuga Labs’ game track planning for Otherside can be seen as one of those stories, and the emphasis on “third-party partnerships” is also evident, which is to “break the circle.”
In addition to Otherside, Yuga Labs’ blue-chip NFTs have started collaborating with traditional games. Recently, the NFT series “Mutant Apes” (MAYC), derived from the “Bored Ape,” reached a collaboration with the famous game IP “Dungeons & Dragons.”
On August 17th of this year, the fighting game Wreck League, developed by nWAY in collaboration with Animoca Brands, began minting NFTs. Yuga Labs appeared as the “Season 1 Partner” of the game, which will integrate the four Yuga series NFTs: BAYC, MAYC, BAKC, and Otherside Kodas. Players can collect Mech Parts NFTs in the game, assemble them, and then mint complete Mech Character NFTs.
Otherside is the headquarters of Yuga Labs’ grand plan for games.
It can be seen that Yuga Labs is making every effort to maintain its industry influence through the combination of games and NFT narratives.
Other blue-chip NFT issuers are not sitting idly by either. They are also starting to take the opportunity to “break free” with their NFT IPs, such as the well-known blue-chip NFT project Doodles collaborating with Crocs to launch a limited edition of “hole shoes”, and Pudgy Penguins launching Pudgy Toys physical toys at the end of September.
From these examples, it is not difficult to see that giving NFTs more application scenarios has become the path for major project parties to break free from difficulties. Games, IP collaborations, and IP derivatives are all means of “breaking free”. In this process of change, Yuga Labs is no longer just an NFT issuer. Their attributes have become more diversified, and perhaps it is more appropriate to describe them as NFT IP brands.
And this also means that when entrepreneurs have the idea of creating NFTs, designing a series of cool, bizarre, or beautiful images is no longer sufficient. What newcomers need is the ability to turn NFT series into IP clusters in the market, and then transform IP into more valuable commercial applications.
If you hold Yuga series NFTs, would you sell them?
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