Yuga Labs, creator of Bored Ape Yacht Club, announced today that it has acquired CryptoPunks and Meebits from Larva Labs. CryptoPunks is one of the oldest and most valuable brands in the NFT world, and Meebits quickly joined the list of most valuable NFT collections after its launch last May.
Yuga Labs hopes to create a “builder community” that creates derivative works around the two projects. To do that, it plans to grant intellectual property and commercialization rights to owners of CryptoPunks and Meebits so that they can create works and products based on their NFTs in the same way as owners of Bored Ape.
“Everyone knows CryptoPunks, everyone loves CryptoPunks,” said Greg Solano, a co-founder of Bored Ape Yacht Club under the pseudonym Gargamel. The edge† “It’s just iconic, way ahead of its time. It is visionary, and it will be here forever. We were just immediately excited about it without knowing what we would like the next step to be.”
Matt Hall and John Watkinson, the co-founders of Larva Labs, said they thought Yuga Labs would be better managers of the projects in the future. The duo launched CryptoPunks in 2017 as a “sort of a digital art project,” Hall says The edge† “We felt like we were less and less suited to this as a few experimental software developer people.”
Yuga Labs is also acquiring more than 400 CryptoPunks and 1,700 Meebits from Larva Labs as part of the deal. The company declined to share the sale price. Larva Labs will continue to operate independently and work on new projects.
More than $1 billion worth of Bored Apes has been traded to date, according to OpenSea, which ranks the collection as the second largest NFT collection of all time by trading volume. It is only beaten by CryptoPunks, with $2.2 billion. Meebits has traded approximately $227 million in volume, according to OpenSea.
The acquisition comes as the NFT market begins to cool. After a rapid increase in sales volume and value for much of last year, the market began to decline around the holiday season and has yet to recover. The sales tracker NonFungible links yesterday’s NFT sales to approximately 12,000 trades worth $30 million in total. Transaction totals were 10x higher than those through August and September last year; even a month ago, sales and value were twice as high as today.
But as today’s purchase turns Yuga Labs into an even bigger juggernaut in the NFT space, the founders are looking beyond NFTs when thinking about what’s next. The company has already launched merch drops, released a limited-time mobile game and hosted a celebrity-filled party in Brooklyn.
“We see ourselves tentacled in all those things: streetwear, events, gaming, NFTs, and so on,” said Wylie Aronow, another co-founder of Bored Ape Yacht Club, who goes by the pseudonym Gordon Goner. “It’s just a matter of figuring out and extending that utility to these new IPs.”
The team will also have to find ways to monetize the new acquisitions, which didn’t pay off for Larva Labs. While Yuga Labs takes a cut every time a Bored Ape is resold, Larva Labs doesn’t do that with CryptoPunks and Meebits. Yuga Labs doesn’t plan to change that, so they’ll have to come up with something else. Yuga Labs declined to comment on future plans for CryptoPunks and Meebits. They don’t want to repeat Bored Ape’s “membership club” model with CryptoPunks and Meebits, Aronow said.
Yuga Labs has also grown rapidly. Yuga Labs had 11 employees as of January. Today, the co-founders say that number is closer to 50. The company has reportedly been in talks with Andreessen Horowitz on a multi-million dollar investment at a valuation of nearly $5 billion. Yuga Labs declined to comment on a potential investment.
The takeover is a big deal for another reason: it may well be the first sign that the NFT space is professionalizing and consolidating. Outside of the NBA’s Top Shot, most of the major brands in the NFT space have been eccentric projects with names like Cool Cats and Pudgy Penguins that appear to be run from Discord servers. Yuga Labs is starting to behave like a real company – and like any company that wants to make a claim in a growing market, it wants to consolidate.