👉 News. Bored Ape and other collections are making their way into the "traditional" economy.

👉 Background. NFT trading volumes have dropped more than 90% from their 2021 peak.

👉 Why it matters. Only the most well-known collections will easily make it through the "bear market".

What is happening in the NFT market? For the past few months, all the indicators have been turning bright red one by one without knowing how far the fall could go... One figure allows us to measure the trend: in 2022, the trading volumes on the main NFT platforms such as OpenSea have fallen by more than 90%. 90% !

And yet, contrary to what we can read everywhere, NFTs are anything but "dead". If many collections - some of them very crazy - will not survive the "bear market" (and that's not bad if you ask us), others are more than resisting and continue to develop under the media radar.

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These collections are the "Bored Ape Yacht Club", the "Mutant Ape Yacht Club", the "CryptoPunks", the "Moonbirds", the "Doodles", the "Azuki", the "VeeFriends" or the "Nouns"... Aesthetically, they have nothing in common. But on the rest, i.e. the marketing, the community dimension, the similarities are not lacking and that's what explains in a large part their success.

Build a core group

The first strength of NFT's large collections is obviously their...community. A community that is created gradually. First, there is the time of the constitution of a hyperactive hard core. Some projects like the Bored Apes or the CryptoPunks started with the support of anonymous collectors. Others, like the "VeeFriends", are welded around a well identified personality; in this case, Gary Vee.

The American managed to raise 50 million dollars from the Andreessen Horowitz fund, which is with Sequoia Capital (read their interview with The Big Whale), the largest investor in the Web3 planet.

Gary Vee's background, his reputation as a serial entrepreneur (he has notably invested in Facebook, Twitter, Uber or the French company Sorare), have made him a strong personality in the ecosystem. He has 10 million followers on Instagram! In order to take as many people as possible with him, Gary Vee got personally involved in the project. In addition to offering educational content on NFT, he responds directly in the VeeFriends Discord, which has... 365,000 members!

The phase of building the core is essential for any NFT collection, with or without a leader. The French Panda Dynasty project started with a bang a year ago thanks to a particularly dynamic Discord. The project had gathered some 8000 members in a few weeks.

Develop a community

Then comes the phase of opening the project to reach a wider audience. One of the common points between all successful collections is the feeling of "FOMO" (Fear Of Missing Out), i.e. the fear of missing a great opportunity. One of the most effective ways to create this reaction is the "hashtag" on social networks. The Bored Ape and the Mutant Ape have used this strategy a lot with the now famous #apefollowape.

This system allows both to get the word out about the collection and to give members the opportunity to identify each other on the Internet, while increasing their number of followers on social networks. Gaining notoriety, especially on Twitter, is important. This is an opportunity to showcase your NFT(s), whose value may appreciate as your account gains popularity.

The tour de force achieved by the studio Yuga Labs, which created the Bored Ape and bought back the intellectual property of CryptoPunks in 2022, has been to regularly re-launch the hype with new projects around its collections. In June 2021, when the "floor price" of the Bored Ape was 20 times higher than the "mint price", Yuga Labs released a spin-off collection, the Bored Ape Kennel Club (BAKC), enriching their universe with new characters in the form of dogs.

Three months later, Yuga Labs did it again with the release of Mutant Ape Yacht Club, a collection derived from BAYC, this time in the guise of zombie monkeys. "The best collections have understood that the sinews of war is to make people talk about you constantly," recalls Stanislas Barthélémi, blockchain and crypto-assets consultant at KPMG.

If this strategy can generate doubts among the "uninitiated", it allows the brand to be known. A choice of diversification that some collections, such as the French Panda Dynasty, have not adopted and which today penalizes them. The buzz phases around a collection are often synonymous with a buying frenzy, making us forget the risks of "rug pulls" (scams in which the project holders leave with the cash register, which are still legion in the world of NFT).

Keeping the hype going

One of the big advantages of NFTs, and one that is used by large collections, is that they can be used as profile pictures on social networks. The paying users of Twitter can do it since a few months, those of Instagram and Facebook (not yet in Europe) since this week. But is it enough to keep the members of a community loyal?

Before being a sort of badge of ownership, NFTs are above all proof that one owns a unique digital object. This is where NFT technology comes into its own, as it allows owners to be granted benefits - or "utilities" - based on their digital title.

The most popular collections like Bored Ape also build their success on their ability to offer exclusive benefits to their members: unique clothes, privileged access to events... At the end of October 2021, only a few months after the launch of BAYC, Yuga Labs organized the Ape Fest, a party on a yacht reserved for 1000 owners of BAYC or MAYC, with an exclusive concert by rock band The Strokes and rapper Lil Baby.

These very "hype" events are all opportunities for Yuga to remind their weight in the ecosystem. At the last NFT NYC festival in June 2022, Snoop Dogg and Eminem, who own BAYCs themselves, came to do a private show for the other BAYC owners. "The artistic dimension of an NFT is essential, but the benefits it provides have almost become even more important," notes John Karp, co-founder and president of the NFT Factory in Paris.

The strength of the large NFT collections is finally to proceed to airdrops - free gifts - of new NFTs for their members. One of the most famous examples is the "Moonbirds" collection. To have access to these NFTs, you already had to have one of the 1000 NFTs of the PROOF Collective collection, created in September 2021 by Kevin Rose, who is the creator of the Modern Finance podcast.

This very exclusive strategy has propelled the Moonbirds into the pantheon of the most popular collections with a "floor price" of around 16 ETH (about 23,000 dollars).

In order not to fall into speculation, the collections however set up systems which oblige their owners to keep them long enough to benefit from all the advantages. In order to evolve and develop specific traits, Moonbirds must, for example, be "nested", i.e. kept for varying lengths of time.

With a view to mass distribution, the "blue chip" collections (the most capitalized) are now betting on prestigious artistic directions in order to create complete and differentiating universes. For example, Doodles recruited Pharrell Williams as art director, while Azuki recruited Rehito Hatoyama, the ex-boss of Sanrio (Hello Kitty), as advisor. The influx of specialists from the fashion and merchandising industries helps to flesh out these universes into brands that are recognizable to everyone.

Reaching the general public

The last step for the collections (and not the least) is to reach the general public. To this day, none of them has reached the general public. Maybe Bored Ape on the fringe, and still! During the creation of the Bored Ape virtual world plots, Otherside, some investors, less experienced, had experienced a lot of technical and financial difficulties. During the "mint" (creation) of the plots, the only transaction fees could exceed 2 ethers on the Ethereum blockchain because of the congestion of the network!

After this episode, Yuga Labs hinted that they might create their own blockchain, fuelling a bit more confusion, and putting off a lot of potential new entrants. This episode showed how far the sector still has to go to be more than just for... experts.