BAYC Creators Interviewed As NFT Lending Crisis Looms

Yuga Labs founders Greg Solano and Wiley Aronow, also known by their respective pseudonyms CryptoGarga and GordonGoner, recently sat down with the Full Send podcast team for their first long-form on-camera interview.

The creators of Bored Ape Yacht Club (BAYC) share in the nearly hour and a half video how they grew the brand into a $4 billion company, which now accounts for 63% of the implied market capitalization of the top 100 NFTs.

This interview follows changes to the terms of service of the newly acquired Yuga Labs collections CryptoPunks and Meebits to offer expanded commercial rights usage to their owners.

“We were not the first project to give away a license to NFT holders. But I think we were the first project to do that with IP that actually felt like you’d want to use, for products and branding or TV shows,” according to Aronow, who said people were already creating derivatives of their Bored Apes within a week with launch in March 2021.

They admitted that the first NFTs they bought were CryptoPunks and CryptoKitties back in 2017, but not as an investment and more as something fun. Solano called CryptoPunk’s Mona Lisa of NFTs.

The moment they knew “we’ve kind of made it” was when Golden State Warriors point guard Stephen Curry entered the BAYC Discord chat and former NBA player Shaquille O’Neal bought a Bored Ape. “This is really now, on a whole different level,” Aronow said.

At launch, BAYC bucked the trend of bid levels or bond curves by selling everyone equally at around $200. All monkeys are also equal in utility value – a gold monkey has the same utility value as a monkey at the floor price.

“We never look at the floor price ever. I don’t care, Aronow said.

Solano offered some advice to any founder stuck on not focusing on the floor price, but rather “go pick mushrooms in the woods and think of something cool you can do with the project instead.”

What they care about is the unique number of wallet holders. It’s also why each founder only owns one Bored Ape.

“We are trying to create this egalitarian club. We want as many club members as possible to be as distributed as possible, said Aronow.

When it comes to the Otherside Metaverse, the virtual world connected to the BAYC ecosystem referred to as their “passion project,” they were inspired by the video games they grew up playing like World of Warcraft.

They believe the metaverse doesn’t have to be as dystopian as it’s often depicted, but it can be fun and “primarily a platform for experimentation and play,” according to Aronow.

The NFT lending crisis may loom over BendDAO

This interview comes at a time when many NFTs used as collateral in the BendDAO lending platform have defaulted without any bids. The BendDAO contract has run out of Wrapped Ether (wETH) and as a result now has 0 ETH left to pay lenders at the time of publication.

Researcher NFTStatistics.eth pointed out in a Twitter thread that the platform’s NFT borrowers should expect to pay 100% interest on the ETH they borrowed, while the debt positioned against the NFTs is “rising rapidly”.

BAYC and Mutant Ape Yacht Club (MAYC) are among the gatherings with many NFTs that have defaulted due to lack of bids and are nearing liquidation.

NFTStatistics lists that the main reasons for no bids are that BendDAO requires bid amounts to be more than the debt owed by the borrower and above OpenSea floor prices. To open a bid, the user must initially lock ETH for 48 hours, which can be risky.

While the BAYC floor price has been on the decline since a May 1 peak of 153 ETH, sitting at 67 ETH at press time, it remains in the top ten pools with the highest floor prices.

The DAO must decide on the best course of action to take. A proposal is currently under consideration. The DAO uses the off-chain Snapshot voting system, and pending the outcome of a 24-hour voting period, the core team will need to implement changes in dapp.

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