If you’re active in the NFT ecosystem, you likely know the name “Yuga Labs.” The young company entered the space in 2021 and quickly made a name for itself by launching and acquiring the biggest NFT projects ever — the Bored Ape Yacht Club and CryptoPunks, respectively.
Here’s everything you need to know about the company taking over the metaverse.
What is Yuga Labs?
Yuga Labs was founded in February 2021 and incorporated in the state of Deleware in the United States. The company is best known for creating the world’s largest and most profitable NFT project to date, the Bored Ape Yacht Club (BAYC). BAYC is a collection of 10,000 unique Bored Ape NFTs. On April 23, Yuga Labs launched the BAYC mint, with the final sale set for May 1. The initial floor price was set at 0.08 ETH (about $240). Just a few months later, in August of 2021, the floor broke 44 ETH (about $137,000). Today, the project is worth billions.
But BAYC was just the beginning. On June 18, 2021, Yuga Labs launched a spinoff collection for Bored Ape holders called Bored Ape Kennel Club (BAKC). Then they launched the Mutant Ape Yacht Club (MAYC) on August 28, 2021. NFTs from both collections quickly started selling for tens of thousands of dollars on secondary markets, and the most famous people in the world started buying them.
After a highly-lucrative 2021, in which Yuga Labs pulled in a staggering $127 million in net revenue, the opening of 2022 saw the company set its focus on one thing: expansion. In March alone Yuga Labs acquired CryptoPunks and Meebits, two of the most valuable NFT projects in the community, and announced it would launch a new metaverse project known as Otherside.
However, until recently, relatively little was known about the company itself, especially in contrast to its high-profile NFT project. But as Yuga Labs emerges as one of the most dominant and financially heavy-hitting players in the NFT ecosystem, with big plans to expand into the metaverse, the company has come under an increasing amount of scrutiny.
BAYC doxxing: Who founded Yuga Labs?
For a time, the identity of the individuals behind the BAYC project was unknown. Yuga Labs itself was spearheaded by two individuals who went by the pseudonyms of Gordon Goner and Gargamel and who later enlisted the help of two software engineers known as Emperor Tomato Ketchup and Sass.
February saw this Web3 pseudonymity dispelled when BuzzFeed published an article that effectively doxxed Gargamel and Gordon Goner, revealing them to be a writer by the name of Greg Solano and a former student by the name of Wylie Aronow, respectively.
Doxxing is the act of exposing previously unknown personal or private information, usually about an individual, online. Shortly after the BuzzFeed doxxing, the two remaining members of BAYC, Sass and Emperor Tomato Ketchup came forward, revealing their names to be Zeshan and Kerem.
The doxxing sparked an uncomfortable but crucial discussion about anonymity in the world of Web3 that continues today. Buzzfeed senior technology reporter Katie Notopoulos, the journalist behind the story, claimed the publication’s actions helped increase transparency and accountability toward a company that is now worth billions and operates in a legal and technological realm that is nowhere near finished evolving.
In contrast, Yuga Labs’ CEO Nicole Muniz was quick to express her dissatisfaction with the doxxing, claiming that anonymity doesn’t necessarily equate to a lack of accountability.
Both parties have a point, but what happened to the project’s founders may not even qualify as doxxing in the proper sense.
When the founders of BAYC launched their NFT project in April of 2021, they chose to remain anonymous. Beyond a veil of pseudonyms, however, that anonymity was arguably never really there to begin with. Yuga Labs is an officially registered business in Delaware, and Buzzfeed admits to combing through publicly available records to identify the two founders.
Drawing a clean and sensible ethical line here is not easy, and the NFT community was divided on which side was right. What emerges is, admittedly, a bit of a choose-your-own-ethical-adventure-style quandary: Either trust powerful Web 3 companies to behave ethically, pursuing identification and accountability only after problems arise, or demand that this information be not only available but easily accessible (a la Buzzfeed article) a priori. In any case, this discussion isn’t going away anytime soon.
Yuga Labs’ funding and profits
In late March of 2022, Yuga Labs completed a funding round that saw them raise $450 million and put them at a $4 billion valuation. The round was led by Andreessen Horowitz (commonly referred to as a16z in the crypto world), a venture capital giant who has also played a role in getting Web3 organizations like Dapper Labs, Coinbase, and OpenSea off the ground. Other investors include CoinBase, Animoca Brands, Samsung, and Google Ventures to name just a few.
Yuga Labs has seen incredible success since its inception in 2021 and continues to ride that wave to further growth. The company expects to generate $455 million by the end of 2022, chiefly through sales of virtual plots of land in Otherside.
The board and affiliations
Yuga Labs’ CEO Nicole Muniz and a16z general partner Chris Lyons constitute the company’s board of directors, Lyons having joined the team during Yuga’s March funding round. Things get a little more complicated when looking at how the BAYC’s expansions are being run, which is where much of the important decision-making pertaining to Yuga Labs’ projects happens.
In March, ApeCoin DAO, legally a separate and independent entity from Yuga Labs, announced it would be introducing ApeCoin ($APE), a cryptocurrency to be used in products, games, and services in the BAYC universe. It’s also a governance token that allows holders to vote on proposals regarding rules, funding allocations, and projects in the DAO community.
DAO stands for “decentralized autonomous organization,” a description whose roots are found in the underlying ethos of Web3. Despite the existence of some very close relationships between the two organizations, Yuga Labs insists that it is not in any way responsible for ApeCoin. This distancing is unsurprising given that Web3 companies that sell tokens as unregistered securities have attracted the attention of the SEC, despite crypto’s general ability to skirt traditional regulatory frameworks.
But this claim of independence is difficult to take at face value. When ApeCoin launched, Yuga Labs made it no secret that the company would happily incorporate the token into the BAYC universe. Yuga Labs also gifted a 1/1 NFT to the ApeCoin DAO treasury.
Looking at ApeCoin DAO’s current board doesn’t help their case, either, which currently consists of five members serving a six-month term: Amy Wu (head of ventures & gaming at FTX), Alexis Ohanian (co-founder of Reddit and general partner and founder of Seven Seven Six), Maaria Bajwa (principal at Sound Ventures), Dean Steinbeck (president and general counsel at Horizen Labs), and Yat Siu (co-founder and executive chairman of Animoca Brands).
Other than being an investor in Yuga Labs, Animoca Brands is a game software and venture capital company that, along with British metaverse tech company Improbable, is helping build the company’s metaverse, Otherside.
When ApeCoin launched, it immediately started trading on major exchanges and became highly valuable. Currently, a single $APE is worth just over eight dollars. A total of one billion ApeCoins will be released in stages to various groups and individuals. That makes the distribution of these tokens a critical part of the picture.
Sixty-two percent will go to the ApeCoin DAO community, 15 percent of which goes to owners of Bored Apes or their spinoff NFT project cousins, Mutant Apes. The remaining tokens will go to the DAO’s treasury.
Sixteen percent will go to Yuga Labs itself (6.25 percent of which will be donated to the Jane Goodall Legacy Foundation). Fourteen percent has been allocated to “launch contributors,” and while there has been little detail provided regarding who those contributors are, they are likely to include investors like Andreessen Horowitz and Animoca Brands. The remaining eight percent will go directly to the founders of Yuga Labs.
For a company that claims it had no hand in the creation of ApeCoin, it has rather close business ties with at least one member on ApeCoin DAO’s board and is certainly taking in a fair amount of the token’s resulting profits.
The fight for the future of the metaverse
Back in March, when Yuga Labs announced Otherside, the NFT community took note. The company’s metaverse project is by far the largest it has undertaken and aims to be the centerpiece of what is essentially a new media empire.
They know they are not alone in trying to attract Web3 denizens to their community. Meta, the company that owns Facebook, Instagram, and Whatsapp (among others), is banking hard on the future of its own metaverse, and it certainly has the resources to back up its intentions.
Yuga Labs proponents advocate against traditional players like Meta monopolizing the space, though. In a recent interview with The Verge, Chris Dixon, a general partner at a16z, said, “There’s a dystopian future where Meta is this kind of dominant digital experience provider, and all of the money and control goes to that company.” Curiously, though, Marc Andreessen, co-founder of Andreessen Horowitz, is on Meta’s board of directors.
Yuga Labs faces tough competition from other Big Tech players, too. Apple, Google, and Microsoft are all hard at work building out their own metaverses. Decentraland, the virtual reality platform built on Ethereum, made headlines last fall when a plot of land sold for $2.4 million dollars.
It’s unclear if Yuga Labs can compete with these companies in the long run, but given the scale and speed of their expansion to date, it would be unwise to count them as anything but a real contender in the metaverse space.
How they choose to go about building these Web3 spaces is another uncertainty. On Yuga Labs’ website, the company’s mission statement flashes up in bold black-and-white lettering as you scroll down the page: ‘We believe that the potential of Web3 can be realized […]. No borders, no rulers, just people making cool shit, together,’ it reads. Whether or not they choose to inhabit that rhetoric as they shape the future of the NFT community remains to be seen.