BAYC and MAYC's underwhelming price performance is a microcosm of the overall Ethereum NFT market.

By Nancy

While Bitcoin NFTs are experiencing a hot uptrend, Yuga Labs' darkest hour has left many NFT holders in distress. This not only reflects the continuous decline of the leading NFTs and the unfortunate liquidation, but also demonstrates the difficulty for the entire Ethereum NFT market to change its long-term decline in the short run.

Facing the imminent collapse of its NFTs, more than 75 BAYC and hundreds of MAYC are in a state of Blend auction liquidation. Additionally, the latest data from Flipside Crypto shows that as of March 5th, the blended loan balances of MAYC and BAYC have reached an all-time high, with over 50% of MAYC loans in an "underwater" state (i.e., the highest bid value is less than the principal owed).

The continuous decline of Yuga Labs' NFT series has sparked community discussions. Some are glad to have sold in time to stop losses, while others blame Yuga Labs for inaction. Some even express intentions to "exit the circle" by selling their NFT assets if prices do not improve, while others mockingly state, "Yuga Labs is giving everyone a chance to rejoin this great club."

With the return of the co-founder, Yuga Labs is still facing community dissatisfaction with its market strategy transformation.

Yuga Labs, once in the limelight, not only secured the largest single financing in the NFT field but also had its native and acquired NFTs as a backbone of the entire NFT market. However, after shifting towards the metaverse development path, Yuga Labs gradually began to decline. Recently, Yuga Labs has taken action.

In terms of team, Yuga Labs co-founder Greg Solano announced in a post on X last month that he would take over as CEO, replacing former Activision Blizzard executive Daniel Alegre, and announced the establishment of a new company called BAYC LLC as a subsidiary of Yuga Labs, responsible for all matters related to BAYC, in an effort to free the BAYC team as much as possible. In addition, Greg Solano also revealed that Yuga Labs plans to focus on developing more attractive games and plans to turn Otherside into a Web3 gateway. It is worth noting that the combined annual revenue of Fortnite and Roblox, competitors of Otherside, in the past few years is approximately $8 billion.

In terms of products, Yuga Labs recently collaborated with the NFT market Magic Eden to create an Ethereum market, allowing users to access all popular minting platforms of top creators and earn rewards through Magic Eden's reward program. In February of this year, Yuga Labs also announced a collaboration with the game studio Faraway to launch the game "Dookey Dash Unclogginged" in the first quarter of 2024, where NFT holders are eligible for token benefits. Unlike the original single-player version of "Dookey Dash," this is a free version of the game that allows all users to participate.

In terms of revenue, Yuga Labs has also established a creator alliance with Magic Eden and others to promote a sustainable royalty framework and collaborate on creating NFTs for random airdrops to users and rewarding the highest royalty collectors. At the same time, it has launched a 69-day royalty reduction event, including a 2.5% reduction in royalties for all forcibly collected collections and a 1% reduction for traditional collections. However, this temporary reduction in royalties does not seem to be widely accepted, and another NFT project, y00ts, using forced royalties for NFT repurchases and providing X badges to creators, has attracted market attention.

In terms of market expansion, Yuga Labs has not slowed down its acquisition pace, announcing the acquisition of Moonbirds' parent company PROOF assets last month, including the team, intellectual property, and art portfolio. However, due to the latter's poor reputation, Yuga Labs' move has also sparked community controversy.

Overall, the underwhelming price performance of BAYC and MAYC is a microcosm of the overall Ethereum NFT market. Although Ethereum NFTs, after multiple market baptisms, still hold an absolute advantage, they are facing rapid competition from rivals such as Bitcoin and Solana. Whether Yuga Labs can continue to maintain its position remains to be seen, but NFTs under its umbrella, such as BAYC and MAYC, are facing the most challenging situation since their inception due to the price decline.

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