Interview: Jack, BlockBeats

Organized by: Luccy, Joyce, BlockBeats

Editor: Jaleel, BlockBeats

In recent months, the transaction volume, new issuance volume, and blue-chip NFT prices in the NFT market have continued to decline, and BAYC has also fallen below 24 ETH many times. When everyone in the crypto community talks about NFT, Yuga Labs must be a topic that cannot be avoided.

As the leader in NFT, the NFT brands incubated by Yuga Labs firmly occupy the blue chip rankings. In the past year, although Yuga Labs has launched Dookey Dash and the Bitcoin NFT series TwelveFold, these new narrative gameplays have only attracted players’ short-term attention and liquidity, such as “NFT’s darkest hour” and “NFT is dead”. The emotion is still there.

During the Token 2049 conference in Singapore, BlockBeats frontline reporters made an appointment with Daniel Alegre, CEO of Yuga Labs, for an exclusive interview, in-depth discussion of the narrative of NFT, the ecological layout of Yuga Labs and other topics.

Is the NFT narrative really over?

Before joining Yuga Labs, Daniel Alegre first worked in music, and his family was in the radio business. Daniel Alegre then moved to Google and worked at Google for 16 years. In 2005, he was responsible for opening Google in China and ran Google Asia, opening many businesses in the Asia-Pacific region. Later, Daniel Alegre joined Blizzard in March 2020 as president and chief operating officer. During his tenure at Blizzard, he worked on Call of Duty, World of Warcraft, Diablo, Overwatch and Candy Crush 》and other well-known game brands.

On April 1 this year, Daniel Alegre posted on his personal social media that March 31 was his last day of work at Activision Blizzard, and he would officially start serving as CEO of Yuga Labs starting tomorrow. It was extremely exciting and sparked a heated discussion in the community.

BlockBeats: Regarding the current situation of NFT, do you think the NFT narrative has ended?

Daniel Alegre：No, of course not. This is a misunderstanding, that is, the valuation of the NFT space is based on the valuation of PFP. But just a few weeks ago, some BAYCs sold for over a million dollars. When people asked Amazons Jeff Bezos in 1998 if e-commerce was over, he replied, No, of course not, even though everyone thought Amazon would go out of business.

But if you look at the evolution of NFTs and the true value and functionality of NFTs, you will understand that NFTs are a clear value proposition. Its value is so high that Bored Ape holders now use it not only as PFP but also for community branding.

So for Made by Apes, we have over 900 holders who are leveraging their PFP to create independent businesses, but its really leveraging the whole community branding and what theyre doing is building a variety of businesses from selling alcohol and water to apparel to digital cards, burgers and more. The entrepreneurial spirit displayed by our NFT holders, I think is very unique because they are creating a completely new ecosystem similar to what Amazon has established in e-commerce.

NFT ruler, how Yuga Labs built the NFT brand

Yuga Labs was founded in 2021 as an NFT and cryptocurrency marketing and development company. Its first product, BAYC, went on sale in April 2021, creating one of the most influential projects in the history of NFT. Not just BAYC, along the way, Yuga Labs famous NFT projects have included MAYC, BAKC, Cool Cats, World of Woman, etc. After acquiring the IP of CryptoPunks and Meebits, the entire crypto community went into a frenzy.

In March last year, Yuga Labs, the parent company of Boring Ape, completed US$450 million in financing at a valuation of US$4 billion, led by a16z, with participation from Animoca Brands, Thrive Capital, FTX, MoonPay and others. From the first picture to a valuation of US$4 billion, stars from sports, entertainment, and VCs have supported it, acquired well-known IP, and launched Ape Coin. So far, Yuga Labs has become a veritable NFT ruler.

Related Reading:Written by Yuga Labs: The origin of the $4 billion story—“Let’s make an NFT.”》

BlockBeats: We do see some people printing their monkey NFTs on water bottles or different kinds of drinks. But if the price of NFTs drops, people will be less willing to associate them with brands. What do you think about this issue?

Daniel Alegre：I beg to differ. Just the other day, I saw a robot making coffee at the San Francisco Airport. My son said to me, Look, theres a BAYC. And then I noticed someone had their BAYC displayed on the screen. So its not that people arent willing to take advantage of their PFP.

BAYC’s trading volume shows that 92% to 93% of holders are unwilling to sell their BAYC. So relatively little $ape is actually being traded in circulation, and people hold $ape because they see value, value in community and community connections, personal value in identifying with the brand that the community builds together. On top of this, you can see a complete ecosystem with many developing commercial enterprises emerging.

BlockBeats: Does Blur ruin the atmosphere of NFTs or NFTs as a whole? After all, only Blur was able to extend their brand or popularity through licensing, but while projects like Azuki or Pudgy Penguins performed slightly better, they didnt really benefit from BAYC.

Daniel Alegre：Yeah, we focus on one thing, and thats telling great stories, building great communities, and then everything else flows from there. Especially in BAYC, the model we adopt is subverting the traditional concept of intellectual property. In a normal media company environment, you create intellectual property and then license that intellectual property in very specific ways. For example, you can use the image of Mickey Mouse and make sweatshirts and make money from it, but if you want to build a restaurant, you dont use Mickey Mouse to build it. Whereas here, were actually letting the community help build the brand, they own the brand and can really drive it forward, and we just have to support them. In addition, we have also built some Web3-based or non-Web3-based experiences for the community. What were doing with Made by Apes is supporting businesses across the entire ecosystem, and theyre also creating offline businesses.

We want them to succeed. Its all about community and connection. We built Otherside because community members told us they wanted to build a place where members of the community could connect together and build on that with a unique experience.

BlockBeats: So you fundamentally disagree with other NFTs such as CC0 that do not have permission to create, commercialize, and use NFTs for other purposes. So how should we use them?

Daniel Alegre：What surprised me was the level of entrepreneurship in the community. I know the community will be very strong and the users will be connected and committed to the community. What I didnt expect was that a lot of people were taking what they had built together in the community and turning it into something else that was really interesting. Besides, the reason why I came to the Asia-Pacific region is that I know there are many community holders here. In the early days, this was just a two-year-old company, and we were more focused on our business in the United States. But when I became CEO, one of the first things I said was that the next ApeFest (an annual ape community event) would not be in the United States, but in the Asia-Pacific region. I think this must be the right decision because the community in this area is so impressive and it gives us an opportunity to expand the community.

BlockBeats: Its really hard to build a brand in Web3, especially extending your reach to Web2. There are many friends in the Chinese community who are also building NFT brands, but many people left because they were unable to successfully build brands and strong communities through NFT, and eventually returned to the Web2 industry because Web3 did not bring them enough income to survive. What do you think about this? How did you survive and build your brand?

Daniel Alegre：I think the mistake these companies make is that they treat the NFT industry as a revenue opportunity and think about how to profit from it. If you look at it from this perspective, you might launch an NFT, but there is too much noise in the market. You might think this one doesnt do much, one makes a little money, the other makes a lot of money, but what next?

And Yuga Labs was built from the beginning with the idea of ​​being a continuous interaction and community building, which is why it is called BAYC. When communities feel that they are not only heard and connected, but that the experience will continue to evolve, they will stay enthusiastic and help build the brand, which of course is not an easy thing to do. We as a company should be completely focused on telling stories and making connections, and if you do that well, you can build long-term connections. But we dont look at this in terms of NFTs now or NFTs 12 months ago, we look at it as a long-term commitment and we hope to continue to maintain and build this enthusiasm and connection in the years to come.

Yuga Labs is more like Tencent for Web3

BlockBeats: Some people say that a great achievement of Yuga Labs is that there are many celebrities standing on the side of the brand, but others say that this is carefully planned by the team. For example, giving monkey NFT to these celebrities is a clever marketing strategy. What was the thought process behind this strategy?

Daniel Alegre：The reality is that we have nothing to do with celebrity endorsements or owning Monkey NFTs, or pushing anyone to buy Monkey NFTs, they are buying them spontaneously, they identify with the art, love the quirkiness of it, and the art resonates with so many people. I think thats what makes it special.

It all comes down to whether you have a good story and great artwork. This art is innovative and truly resonates with people around the world, whether in Asia Pacific, the United States, the Middle East or Europe, from the top celebrities to the unknown, they have all found a sense of identity.

Speaking of ApeFest, we will be holding ApeFest in Hong Kong in early November. What’s special about ApeFest this time is that we have added a day of activities to invite creators, community members, and potential new members to experience what it means to join BAYC. We care about not just growing the community, but also fostering connections between community members. I think its also important as a leader in this space to show people the value of being part of such a successful brand so that more people can experience the joy of Web3.

BlockBeats: Another question that is very important to us, where do you think Yuga Labs’ main revenue model will come from in the future?

Daniel Alegre：Frankly, I think its unpredictable. What I can see right now is everything from new minting to secondary royalty revenue, to the in-app purchase experiences were building in Dookey Dash and Heavy Metal Forge, to the revenue shares we have with third-party partners like Gucci, its very There may also be entirely new revenue streams that I might not have imagined.

BlockBeats: If you were to compare Yuga Labs to a Web 2 company, which one do you think is most similar to Yuga Labs? Which one is closest?

Daniel Alegre：This is a very good question. We can feel that Tencents development is very strong in terms of games, social connections, content, etc. We have some parts that are similar to Tencents development and evolution, but there is a big difference, and that is the sense of belonging and community. But this is what I know about Tencent from five to ten years ago, so I dont know what Tencents actual situation is now. However, I have found no other company in the digital space that can compare to this kind of community and connection, a community branding and brand connection approach that even the most loyal of Elvis Presley, Britney Spears and BTS s fans dont have this level of connection either. The closest example I can see is that level of connection that fans of major artists have, but they go a step further and embrace it and want to build and strengthen that connection for the benefit of others and themselves .

In the future ecological landscape, where will Yuga Labs go?

Starting this year, Yuga Labs’ layout seems to have undergone new changes. On January 12, Yuga Labs officially announced that it will launch the new game Dookey Dash on January 18, and will launch Mint for the game participation ticket BAYC Sewer Pass the day before the game is launched. This is the third stage of the prequel to the new storyline within the BAYC ecosystem, and is also the preparation stage for the launch of the first interactive game of this storyline.

Similar to Temple Run, Dookey Dash is an endless runner game. There is no end point in the game and the difficulty of the game increases with the distance traveled. The game will be a web-based game that can be played on PC and mobile devices, but you must have a BAYC Sewer Pass.

On June 21st, BAYC Yacht Club’s official Twitter released a promotional video for the new game “HV-MTL Forge”. “HV-MTL Forge” is a game centered around Yuga Labs’ latest mecha NFT series HV-MTL. In this space construction game, players with HV-MTL can access and participate, build or customize an exclusive special space in the game, and upgrade their HV-MTL to a new form through the game.

Seven days later, the HV-MTL Forge game was officially launched. On the eve of the launch, Yuga Labs co-founder Garge.eth posted a long article on his personal Twitter, talking about the game, the earlier Dookey Dash, and Yuga Some thoughts on Labs game development planning. After BAYC was released two years ago, Yuga Labs had the idea of ​​making a game. Although it was not implemented in the end, the idea still existed, and the thinking about the game has not stopped.

Following HV-MTL Forge, the public beta test of Yuga Labs Legends of the Mara (LotM) game will be launched in September, providing otherdeed virtual land NFT holders with new NFT and a wider metaverse experience . Legends of the Mara is a collection-based 2D strategy game, while Otherside itself is a large-scale 3D game. LotM will also reveal more information about Kodas, small bipedal creatures that exist on 10% of the original 100,000 Otherdeed lands.

Build culture and community on the chain

BlockBeats: There is another question that is often raised by many NFT entrepreneurs. They regard Yuga Labs as their spiritual mentor in building Web3 brands. But now they see Yuga Labs moving into gaming as well. Therefore, they need to choose between building a brand or a game for the NFT project. How did you choose? Why switch to gaming?

Daniel Alegre：I would like to say to friends who ask, Yuga Labs is not a game company. Our mission is to build culture on the blockchain, which means telling stories, showcasing art, delivering experiences, and building community.

We want to provide gaming experiences to the community for two reasons: one is that many of our holders have a strong interest in gaming and they understand Web 3 and its value, so we create games that connect them , they like this kind of game. Dookie Dash is a game we designed for Heavy Metal Forge that will enter its final season tomorrow (I believe it is tomorrow). This game actually brings the community together and its an opportunity for us, just like I mentioned before with ApeFest. This is an opportunity for us to show people who are new to Web3 what you can experience in gaming, shopping, video, and more.

Now lets start with games, because thats the easiest way to explore what Web3 can do, to show Web3 to gamers, and let them understand: through Web 3, I can have digital ownership, I can trade in-game assets, I can trade them in different Use my character between games. These are issues that have existed in previous games, and I experienced them firsthand with Activision Blizzard. The closed model of the game means that as a player, you invest money but never get anything in return, or the fruits of your hard work are never exchangeable. This is a problem unique to gaming, and Web 3 will enable a unique evolution in this area.

BlockBeats: Although BAYC is a brand with high community recognition, community members can already start to connect and socialize with each other even without playing games. And the community is growing as the number of other IPs owned by Yuga Labs grows. Another way to expand the community like Azuki is through the transaction of low-priced NFT IP. I noticed these two obvious differences. For example, in the narratives of BAYC and GameFi, users can utilize or monetize their gaming tools. or equipment. What do you think of this situation?

Daniel Alegre：I dont know if youre a member of a country club, but if you look at country club memberships, you can see how we think about community development. When you join this country club, you can socialize with other members. Youll meet them in the main building, drink and socialize. Then some people will say, I actually like playing golf. Do you want to play golf together? OK, lets play golf together. Then you start to build your own social circle and actually get involved in the game of golf. This is what we are doing. BlockBeats: Why arent you considering collaborating with other games? Daniel Alegre: Thats exactly what were doing. We have created and launched our own games and have now begun discussions with third-party game developers to collaborate to create unique experiences for our community. This is what we will definitely do. Thats why we spend so much time in the Asia-Pacific region, where many of the best games and gaming companies in the world are based.

BlockBeats: So, at least in the short to medium term, the focus of Eugalyptus is building a platform for games?

Daniel Alegre：While we deliver a gaming experience, our absolute focus is narrative, engagement, and community. Whether it involves NFT minting, gaming experience, or partner experience, such as partnerships with brands such as Gucci that allow you to truly experience some kind of Gucci experience, these are all things we are building. Our current focus is not just on games, but on multiple aspects.

BlockBeats: So, what will the future ecosystem structure of Yuga labs look like, in which NFT may include IP, and then games and other series of works?

Daniel Alegre：It depends on which series youre talking about. Obviously we have CryptoPunks, orbits and BAYC. In terms of BAYC, I think our vision of evolution is to have digital connections on the other side, and the evolution on the other side is youre going to continue to have new experiences, and no one knows what its going to look like in three years. But were actually empowering the community to bring in their third-party partners to help build it. It could be games, it could be shopping, it could be augmented reality (AR) or virtual reality (VR). We hope to encourage the ecosystem to build itself, rather than being built by ourselves. At the same time, ensuring community connectivity and ongoing storylines are what keep our various communities connected. So this is more of a metaverse digital evolution of our platform with a strong community element in it.

War on OpenSea, is the PFP NFT market heading in the wrong direction?

On August 18, OpenSea announced that optional royalties will be enforced starting from August 31, and all previously issued NFT series will enforce optional royalties after February 29, 2024.

OpenSeas move is very confusing, because it was OpenSea that previously allowed NFT projects to make multiple choices and filtered out zero-royalty markets such as Blur, but now it is turning to optional royalties and indirectly embracing zero-royalty. Previously, OpenSea seemed to have always stood on the side of creators, taking root in the cultural track, providing new project support (Launchpad, etc.) services and forming differentiated competition beyond transactions with Blur. However, OpenSea received criticism from Yuga Labs and began to stop supporting OpenSeas Seaport protocol.

This matter has also attracted the attention of many community members. How will things develop? Will OpenSea change? Or will Yuga Labs have its own NFT trading market like projects like Pudgy Penguins, or use $APE to settle?

BlockBeats: I know you have made a lot of comments on OpenSeas NFT transaction tax cap. Do you think the entire PFP NFT market is heading in the wrong direction?

Daniel Alegre：Not just you, I am also very concerned about the entire NFT ecosystem. The importance of secondary royalties is in creating an economic business model for creators to incentivize them to create on Web 3. The more you can incentivize them to invest in this space and create unique opportunities, the more everyone will benefit from it. Whether its consumers who have access to these works, whether its an ecosystem built around creators or a creator economy, or companies like Yuga Labs that can help facilitate connections between communities. So, Im very disappointed with the direction OpenSea is taking, and I publicly expressed my opinion on Twitter: We are committed to finding ways for creators to be rewarded for their hard work.

BlockBeats: How are you considering FutureHub and are you considering building your own NFT marketplace?

Daniel Alegre：The first thing is to make sure we can partner with and support the markets that support secondary royalties, its that simple. When it comes to whether to consider building your own NFT marketplace, we are committed to finding the right solutions and, ideally, others in the space can help develop and build. The core issue is still caring for creators and protecting their livelihoods, and we will do everything we can to make that happen.