The Bored Ape Yacht Club (BAYC) is an Ethereum-based NFT collection of 10,000 unique Bored Apes. Each Bored Ape has a basket of traits programmatically generated from over 170 traits, including expression, clothing, headware, and more.
Each Bored Ape doubles as a Yacht Club membership card, which grants the holder access to members-only benefits. The first released benefit is a collaborative graffiti board called THE BATHROOM, a digital board likened to a dive bar bathroom wall.
BAYC holders get access to the BAYC Discord, a server where owners chat and hang out.
Perhaps the most notable advantage of the BAYC is access to additional NFT collectibles such as Bored Ape Kennel Club dogs, which are usually airdropped for free to wallets holding a BAYC NFT. These new NFTs are often resold for decent chunks of change.
Future benefits plan to be unlocked as the project progresses along with its roadmap.
Ape holders also have full commercial usage rights over their NFT.
Bored Apes became incredibly popular in the throes of an early-2021 NFT profile picture wave, and they have become particularly popular among NFT-savvy celebrities.
About Bored Ape Yacht Club
The Bored Apes are ERC-721 tokens on the Ethereum blockchain, and are hosted on IPFS.
When the project launched in April 2021, an ape could be purchased for just 0.08 ETH. Thirty apes were withheld from the initial sale, and were earmarked to be used for giveaways, puzzle rewards, and the four creators.
Today, Bored Apes regularly sell for six to seven figures; a collection of 101 Bored Ape Yacht Club NFTs recently sold for a whopping $24.4 million at a Sotheby’s auction in September 2021.
What an historic moment for the club: the @Sothebys auction of 101 Bored Apes has closed at over $24m. Congratulations and THANK YOU to the whole ape community. To the buyer, I think we speak for everybody when we say: WELCOME TO THE CLUB. ☠️🦍⛵️ pic.twitter.com/NKxHekC0ny
Yuga Apes also listed 10,000 new Mutant Apes for sale that anyone could buy for 3 ETH, all of which sold out in under an hour, generating $96 million for the project.
Notable Bored Ape Yacht Club Holders
One of the first athlete celebrities to buy a Bored Ape Yacht Club NFT and use it as a social media avatar was three-time NBA champion Steph Curry, who purchased an Ape for $180,000 in Ethereum in August 2021.
The list of BAYC athlete celebrities includes the NBA’s Josh Hart and Tyrese Haliburton, the NFL’s Dez Bryant and Von Miller, and artists like The Chainsmokers, Waka Flocka Flame, and Jermaine Dupri.
Plenty of corporations and publications have aped into the BAYC, including Arizona Iced Tea.
Final Thoughts: What’s Next for the Bored Ape Yacht Club
Among future NFT drops (unannounced), the BAYC plans to launch an ERC-20 token in Q1 2022. The mechanics and functionality of the token are currently being smoothed over, but some speculate it could work as a DAO governance token, or perhaps something to help the project expand into DeFi.
Good evening, apes. Been hearing a question around the club a lot:
The BAYC is regarded as the most valuable NFT project launched in 2021 in terms of its community and market volume, and it’s nestled into the rankings just behind Larva Labs’ CryptoPunks.
Perhaps the most notable metric for the BAYC success is its secondary market activity– the project has taken on a life of its own due to an active, and now increasingly more affluent, the base of users. The most popular BAYC secondary market is on OpenSea.
As BAYC helps lead the charge for NFTs as profile pictures, NFT fans would be keen to observe how certain projects develop into status symbols– and how quickly a project can transition from a quiet launch of .08 ETH to selling for millions in just months.
Non-fungible tokens (NFTs) are blockchain-based tokens representing unique digital items such as digital art, collectibles, video game items, domain names, and more.
The concept of NFTs is somewhat polarizing: one end of the spectrum raves about the creation of a financial infrastructure to trade and collect digital assets, and the other tends to view the value of NFTs and digital assets as dubious compared to their tangible real-world counterparts.
Much of the static in the antagonist argument comes from a misunderstanding of how valuable the digital economy has grown to be. Understandably, the notion that completely digital items are being sold for thousands to millions of dollars sounds preposterous to a community used to buying physical art and trading cards.
Epic Games, the creator of the popular video game Fortnite, sold $2.4 billion worth of costumes in 2018. Now, if the average person doesn’t know what Fortnite is, let alone why people are buying costumes for their character on it, they may be ideological odds with NFTs.
Fortnite is a great example because, although none of the costumes or items are blockchain-based NFTs, it provides a great perspective of market value for purely digital assets. However, since those costumes aren’t NFTs, their value is entirely limited to existing within the NFT ecosystem. If one wants to buy a Fortnite skin (costume) from someone, they would have to go to a marketplace like eBay, pay money through the platform, and trust that the seller doesn’t scam them or that eBay is a fair intermediary if a dispute arises.
NFT technology allows the owners of NFT-based digital assets to transact peer-to-peer and seamlessly trade NFTs for cryptocurrency.
The benefits of the technology, however, don’t stop there. NFTs have enabled a deep variety of use-cases, from digital trading cards to video games to the representation of assets in the real world.
Welcome to the complete guide on Non-Fungible Tokens (NFTs). This article isn’t investment advice. NFTs and all digital assets have very volatile prices and can be risky to own.
What is “Fungibility”
Fungible (adjective): an item that can replace or be replaced by another identical item. Fungible items are mutually interchangeable.
For example, Bitcoin is a “fungible” asset because 1 BTC will always equal 1 BTC. A $20 bill is valued the same as another $20 bill, regardless of its serial number. You can replace a $20 bill with another $20 bill and still be completely whole.
A non-fungible token is a representation of a digital asset that is unlike other assets. An NBA Top Shot highlight with a serial number of 1/1000 has a different value of the same highlight but with a serial number of, let’s say, 893/1000.
Note: if you’re unfamiliar with NBA Top Shot, check out our guide. A “serial number” basically refers to the order assigned to each NFT moment. If there are 1000 “prints” of a moment, the serial number for an individual number will be X/1000.
Fungibility is a relative concept that tends to reflect on the market value of an item. For example, some assets are semi-fungible within a class. Two parties can swap tickets for NBA Finals nose-bleed seats without too sharp a change in value, but they can’t be swapped for courtside seats.
NFTs and Digital Assets: A Dynamic Duo
Non-fungible assets precede the invention and popularization of the blockchain; domain names, social media handles, tickets to events, and in-game items are all examples of non-fungible digital assets.
Traditional assets generally lack the ability to sell or trade outside of a particular ecosystem. For example, the popular MMORPG Runescape has an in-game economy with some rare items, such as Party Hats, attracting upwards of $5,000 in USD. However, trading this asset requires an enormous amount of trust between two parties, or the use of a third-party “escrow” intermediary.
The blockchain provides a “coordination layer” for digital assets. With blockchain-based assets, users get full ownership and management permission over their property.
A blockchain allows developers to build and collaborate with common and reusable standards, allowing them to specify ownership criteria, transferability, and access. This is comparable to other facets of the digital space, such as PNG or JPEG image file formats, or HTML & CSS formats for displaying visual content on a website.
In less techy words, think of the blockchain as the concrete foundation and plumbing for a house structure, and developers as the builders.
The NFT token standard, introduced in late-2017, essentially dictates how digital assets can leverage a blockchain, provided they meet the standard criteria set out by the developers.
NFTs standardized the trading, interoperability, liquidity, and ability to prove proprietorship across all digital asset classes.
Since NFTs are interoperable, meaning they can exist in the same ecosystem together (unlike, let’s say, digital plane tickets and a RuneScape party hat), they can also be traded in open marketplaces.
For the first time in digital history, people can list their digital assets in global 24-7 open marketplaces, creating liquidity. Think of NFTs as an evolution from a primitive inefficient bartering ecosystem to an eBay-like marketplace.
However, unlike eBay, many of these marketplaces are completely decentralized. There is no need for escrow, and since the blockchain can automatically prove the legitimacy and ownership of an item, it’s almost impossible to scam or be scammed.
The first NFT token standard, ERC721, was launched by Dapper Labs in CryptoKitties. The ERC721 standard maps unique identifiers to address; these identifiers correspond to single assets. It also allows for a permission means of transferring those assets using the transferFrom method.
Another NFT token standard, ERC1155, was launched by Enjin, which brings the concept of semi-fungibility to the blockchain world. ERC1155 IDs can represent classes of assets, rather than single individual assets.
The ERC-998 standard hasn’t been used much, but is still worth mentioning; it allows for a way for people to own both non-fungible and fungible assets.
What’s stopping an NFT creator from just making more of the same NFT?
Through smart contracts, another innovation is made possible by the blockchain; developers can create “hard caps” on the supply of NFTs. If a smart contract says there will only be 10 of an asset, there is no way to reverse it. Further, these smart contracts can prevent NFTs from being modified after they have been released.
In practice, a developer can specify that only 10 copies of a “rare” item can ever be created, while keeping the supply of common items infinite.
What was the first NFT?
CryptoKitties launched in November 2017 and was an enormous driver of attention into the NFT and digital collectible ecosystem, but it was preceded by a few notable projects.
Launched in June 2017, CryptoPunks by Larva Labs was the first NFT experiment on Ethereum: 10,000 unique collectible punks with unique characteristics were sold. These punks could be used with non-custodial wallets like MetaMask, making it easier for the average crypto-savvy individual to get involved with NFTs.
Since there are only 10,000 collectible punks without any further creations, CryptoPunks are a glance at the role scarcity plays with digital collectibles. Some CryptoPunks have sold for over $5,000,000.
Prior to 2017, early NFTs include Rare Pepes (built on the Bitcoin counterparty system) and colored coins (on the Bitcoin network.)
Where Can I Make NFTs?
A handful of NFT minting platforms do a great job at bridging the world of creatives with that of the blockchain.
Entire virtual worlds are being built on the blockchain, where NFTs represent characters and items. Decentraland, for example, is a virtual reality metaverse. Enjin has a “multiverse” platform.
Naming services (think “.com” domain names on the blockchain) are also trendy. Unstoppable Domains, built initially on the Zilliqa blockchain released .crypto domains, each of which is an ERC721 asset. The Ethereum Name Service is also worth mentioning.
Final Thoughts: Why are NFTs Valuable?
Beauty is in the eye of the beholder. NFTs have a market value because the market deems them so.
However, beyond the pricing of an average NFT asset, the NFT technology itself is an enormous evolution in collecting and owning property, whether digital or not.
Beyond the already great value proposition of utility, liquidity, and provenance, NFTs are based on decentralized technology. They can accomplish peer-to-peer and prove true, unrestricted ownership of a digital asset while also achieving centralized organizations’ primary value (trust, escrow, etc.).
Although the lines blur between digital art and other types of experiential art, for the sake of this guide, we’ll be regarding digital art as anything that primarily lives in the digital realm.
If you’re reading this article, you may be wondering how digital art is different from “crypto” art. The technology of crypto art cuts through any latent subjectivity surrounding digital art.
Crypto art utilizes the blockchain as a means to acknowledge and authenticate ownership, prove the propriety of a specific art piece, as well as to facilitate the instantaneous transactions between buyers and sellers. It largely accomplishes this through the use of NFTs, or Non-Fungible Tokens; these blockchain tokens represent unique, one-of-a-kind assets.
The following article will explore the top 6 types of digital art, but it comes with a caveat– “top” is merely a handy way to categorize what excites us about the digital and crypto art industry in 2021.
We acknowledge beauty is in the eye of the beholder, and our opinions below aren’t meant to “rank” artists against one another. If our writing here can inspire other artists around the world to explore creating art on the blockchain, we’d call this one a success.
Let’s get into the best types of digital art in 2021.
1. Everydays: the First 5000 Days
Charleston, South Carolina artist Beeple’s ‘The First 5,000 Days’ crypto art piece shocked the world, selling for a record $69,346,250 on March 11, 2021.
The piece is a collage of artist Mike Winkelmann’s daily releases since he challenged himself to make a picture from start to finish every day starting on May 1st, 2007. His digital designs portray dark, comical phantasmagoric worlds, often using pop culture figures as focal points and references. Many pieces make some subtle, or not-so-subtle, rather, political or social commentary.
Although the lofty price tag has been a controversial subject for a good majority of 2021, and for good reason, we view Everydays: the First 5000 Days as a testament to Winkelmann’s commitment to his creative journey. It’s also a reflection of his early advocacy of blockchain technology.
Artist Chris Torres created Nyan Cat about a decade ago, publishing a video of the poptart-body flying cat in April 2011. The video grew to over 185 million views, becoming a viral sensation.
In February 2021, a 1/1 NFT of Nyan Cat sold in an exciting auction with three bidders competing down to the last few minutes.
Nyan Cat makes our list because its sale will pave the way for future creators of viral sensations to directly interact with their audience, rather than having a third-party intermediary platform, YouTube in this case, determine the engagement and monetization.
There are 10,000 CryptoPunks, each with uniquely generated characteristics. Each is one-of-a-kind, and can only be owned by a single owner on the Ethereum blockchain. When they first launched, anyone with an Ethereum wallet could claim one for free (all were claimed very quickly.)
We like these 8-bit digital portraits are the closest we have to cryptocurrency antiques– they were the first “NFT” on Ethereum, and were an inspiration for the NFT ERC-721 token standard.
4. Pascal Boyart’s Murals (and NFTs)
Inspired by an early 19th-century painting by Eugène Delacroix called La Liberté guidant le peuple (Liberty leading the people), a Parisian street artist Pascal Boyart painted a mural homage, but with one interesting spin.
The mural contains $1,000 of BTC that can be claimed, provided visitors can crack the code the Boyart’s puzzle; the bitcoin has yet to be claimed.
Boyart also began selling NFTs of the mural’s digital version. The pieces are selling for 15 ETH+, or about $32,000 a pop.
#StreetArt treasure hunt in Paris with a #Bitcoin puzzle For the 10th birthday of the genesis block, I painted this frescoe in Paris with a 0,26btc ($1000) puzzle in it. Here’s the public key: 1NqPwPp7hEXZ3Atj77Ue11xAEMmXqAXwrQ Thanks to @alistairmilne for sponsoring this ? pic.twitter.com/F7aIkxmp6t
We like Boyart’s murals because they bridge the real and digital world in such a unique way; for example, he frequently adds a QR code for donations in BTC, and has generated thousands of dollars for his work by admiring passers-by.
5. Hashmask #9939 sex
Hashmasks are unique because they’re the product of a community, rather than a product made to be sold to a specific community. There are 16,000 unique pieces, created by over 70 artists.
The Hashmask initiative belongs to the Zurich-based Suum Cuique Labs, and the Hashmask creators are anonymous.
Hashmask #9939 sold for 420 ETH, or about $840,000.
“We are the exact target audience. We just build what we would like. We didn’t have to do any analysis on people’s preferences because it’s just us,” said one of the anonymous founders. “We hang in the same Discords.”
We like Hashmasks because they demonstrate the efficacy of creative anonymity on the blockchain, as well as the mainstream success that comes about when cultivating a unique relationship with an audience. Being the decentralized world the cryptocurrency industry is, this is particularly important.
6. THE COMPLETE MF COLLECTION
Beeple again, this time with THE COMPLETE MF COLLECTION, a 1/1 collection of all of Beeple’s artwork in video format.
This NFT sale is awesome because it actually comes with a physical, interface-free, always-on, physical artifact that constantly streams the NFT. The device comes with a signed, numbered titanium backplate with, according to the description, hidden authentication markers.
It also comes with an “Authentic Beeple hair sample*,” which the creator further qualifies by saying “totes promise it’s not pubes.”
THE COMPLETE MF COLLECTION sold for $777,777.77 on Nifty Gateway.
We love this one because it not only broadens the category of “digital art” to film, but it comes with a physical, presentable object that makes for a visually stimulating discussion piece.
Final Thoughts: Digital Art History is Being Written
With Bitcoin’s 500% growth in price over a few months between 2020 and 2021, a newly minted batch of affluent cryptocurrency millionaires have entered the art collector space.
The Internet’s newest millionaires and billionaires are showing a warmness to something they’re uniquely familiar with– value stored on the blockchain.
For one, NFTs don’t come with the trappings and concerns of owning physical art pieces, like security costs, transportation, and physical deterioration. While NFTs do come with their unique set of risks (and digital deterioration, or “bit rot” is still a real thing), they provide an ownership and authentication framework like never before.
Crypto art backed by NFTs already has some significant success stories, with CryptoPunks, Beeple, and Hashmask as strong examples in their own right.
Our list of the top digital art is by no means exhaustive, and that’s so motivating to us as creators. There are already dozens of examples of NFT-backed music, videos, and trading card games selling for millions of dollars; the shiny selling prices are less important than the enthusiasm and democracy of investment created in the new era of art.
Street Fighter cards are glorious reminders of the nineties; they’re a passport to the age of arcade gaming.
The first Street Fighter was released in 1987, a simpler time when Internet gaming was still over a decade away. Street Fighter trading cards entered the scene in 1991, bringing the hype of sports cards into the digital realm.
Capcom, the legacy video game developer headquartered in San Francisco, CA, recently launched a suite of Street Fighter II-inspired cards as Non-Fungible Tokens (NFTs) on the WAX blockchain.
The Street Fighter NFT cards are tradeable digital cards with recreations of Street Fighter characters. The packs come in Standard and Ultimate sizes, with 10 cards and 60 cards per respective category.
The first series of Street Fighter cards was released in February 2021 and quickly sold out. Users were able to purchase the packs via credit card.
Upon purchase, the cards can be digitally “opened”– an experience reminiscent of opening up a physical pack of cards in the real world.
Moreover, you can craft them to form other NFTs. By crafting, you can choose to power up the non-build cards you received by adding one more build card and combining them together.
Street Fighter Card Founders
Capcom started its journey as a game machine manufacturer in 1979 and has since matured into a video game industry behemoth with offices in Japan, the United States, England, Germany, and Hong Kong.
Capcom released the first arcade video game version of Street Fighter in 1987, followed up with Street Fighter II four years later. It wasn’t until this game that the Street Fighter craze took off, quickly growing into a cult classic video game and penetrating mainstream culture.
In 1994, the Hollywood-produced Street Fighter movie was released in theatres, and the TV animation version of the game started broadcasting the next year.
It wasn’t until 2021 that Street Fighters made their appearance into the blockchain as tradeable NFT cards.
Enter WAX: the Worldwide Asset Exchange
The Street Fighter NFTs are listed on WAX, short for the Worldwide Asset Exchange. By hosting the cards, the WAX blockchain allows the collectors to enter a marketplace where they can purchase the digital Street Fighters, propose and execute trades, showcase their inventory on social media, and search the wishlist of other traders.
On February 16, 2021, the news about the partnership between the WAX blockchain and Capcom was made public. As per the terms of the partnership, Capcom and WAX teamed up to bring Street Fighter as digital blockchain collectibles to fans.
WAX was founded by William E. Quigley and Jonathan Yantis in 2015 to primarily help content creators tokenize their products and offer them to the global collector community. To date, WAX has raised a funding of 42 million USD from a total of five investors: Node Capital, Asian Cowboy, Andreas Schwartz, Distributed Global, and Hashed.
What Does WAX Do?
The WAX platform has established itself as an early pioneer of NFT hosting, allowing anyone anywhere to trade digital or physical items instantly and securely. Users can use WAX to buy and sell gift cards and build online stores for their products.
In addition to Capcom, WAX has been used by the likes of deadmau5, Atari, Topps, and William Shatner to host their NFTs.
WAX consists of a cloud wallet that makes it easy to buy the native WAX token, store NFTs, stake tokens, and participate in the WAX DeFi ecosystem.
The platform has been used by several gaming industry stalwarts because by participating in WAX brands gain access to a global community of collectors, traders, buyers, sellers, creators, gamers, merchants, dAPP creators, and game developers.
WAX offers lucrative monetization opportunities to its users. Anyone who participates in the WAX network qualifies for rewards in ETH tokens or WAXG governance tokens. Those who deposit a combination of WAXE and ETH into the Liquidity Pool qualify to earn Liquidity Pool Rewards (WAXE-ETH). WAXG is given to those who stake their WAXE-ETH Tokens in the WAX Economic Activity Pool.
Street Fighter II on WAX: How It Works
The Street Fighter II card sale started on February 18th, 2021, and was scheduled to last 24 hours. The first series of Street Fighter on WAX comes with 262 unique trading cards in eight rarities.
As the new crafting system of the card set dictates, the buyer has to start by opening packs of Build Cards, then combine two matching Build Cards to unlock a new card in one of six rarities.
Street Fighter NFTs Explained
A buyer of a Street Fighter Build Card pack opened the pack, and then combined two matching build cards to reveal a new card. The Build Cards are burned in the process, increasing the scarcity and value of the standalone Build Cards.
The buyer can continue upgrading that card’s power score by adding additional build cards. Once it reaches a power score of five, the user gets to unlock a special Class Card in one of six rarities. Build cards are burned when used, which increases card scarcity and value.
WAX’s blockchain technology has multiple roles.
Because these cards are powered by WAX Blockchain technology, users can not only buy and sell digital Street Fighter trading cards on several marketplaces – they can also instantly trade cards from their collection with anyone owning a WAX Blockchain account.
The WAX Blockchain also ensures that the Street Fighter collectible is 100% verifiable as authentic and can never be changed or duplicated.
It’s worth noting that in February 2021– the month Capcom launched its Street Fighter NFT sale– saw over $255 million in NFT sales, the bulk of which came from Dapper Labs’ NBA Top Shot.
Users with WAX wallets and funds were eligible to participate in the Street Fighter sale. A few reports of the sale noted glitches with the sale in the first hour, largely due to the web traffic overload of people attempting to buy a Street Fighter NFT.
Buyers of the initial card sale received “build” cards, which could be combined to form “character” cards, or NFTs of famous Street Fighter characters like Ryu, Chun-Li, Ken, and Blanka.
The cards that you create with the ‘build’ cards come in varying rarities.
The Collectors’ Edition contained the game’s classic characters, and users had a 1% chance of getting them.
The Action, Weld, Battle, Foil, and Base categories come with 5%, 10%, 15%, 25%, and 44% rarities.
The card minting happens simultaneously with the sale, and the participants keep combining their build cards to level up. The platform displayed the mint number and other details of the asset profile such as the asset name, the offer, and template-id, the product price, etc.
The WAX platform also offered a few unique incentives for buyers. On WAX, Buyers could propose trades, showcase their inventory on social media, and search wishlists of other traders.
Although the original sale only lasted for a day, Street Fighter card owners could instantly trade their collectibles on the secondary market to anyone in the world.
The Popularity of the NFT Marketplace
While explaining the rise in demand, Lee Jenkins, Product Manager at WAX, compared the digital ownership of these collectibles with the physical ownership of an item.
“[Blockchain technology] is the first time that digital ownership is truly comparable to physical ownership of an item,” says Jenkins.
The verifiable authenticity and scarcity of the products are also sources for the long-term demand of NFTs.
Final Thoughts: Street Fighter on the Blockchain Packs a Punch
The success of the initial Season 1 sale of Street Fighter cards may lead Capcom to launch Series 2 and 3. NFT launches such as these serve as an excellent example that legacy brands can tap into entirely new marketplaces of digital collectors to generate revenue and connect with their fans.
CryptoKitties is a Non-Fungible Token-based (NFT) game that allows users to collect, trade, and breed digital cats together to produce a variety of new cats. It is widely regarded as the first project to bridge the otherwise “too techy” world of NFTs with a mainstream audience.
If this guide is among your first exposure to the world of blockchain-based digital collectibles, think of CryptoKitties as a hybrid between NeoPets and Pokemon, where each creature has a real-world value on a live market.
The technology underpinning CryptoKitties, the blockchain, essentially acts as a replacement for a centralized “authenticity verification and escrow” department that accompanies most collectible auctions and marketplaces, such as eBay.
The following guide will explore CryptoKitties as an NFT pioneer, how the game functioned, and critical lessons learned by CryptoKitties that have benefited the entire world of NFT creators.
The Origin of CryptoKitties
CryptoKitties was launched in late 2017 at an Ethereum-oriented hackathon, ETH Waterloo by Axiom Zen, the creator of CryptoKitties’ creator, the consumer-focused Flow-blockchain Dapper Labs. The primitive game was built on-chain on Ethereum (a decision that proved to be chaotic for both parties).
CryptoKitties raised a total of $23 million from top-shelf investors like a16z and Union Square Ventures.
The first generation of cats “Generation 0” was auctioned to a small audience in a Dutch auction format, and any new cats could be sold on a secondary market.
As an NFT, each CryptoKitty exists on the blockchain as a unique asset using Ethereum’s ERC-721 non-fungible token standard. The breeding aspect of the game is an on-chain algorithm nestled within a closed-source smart contract that determines the “cattributes” (genetic code of the new cat.) Some cats with certain cattributes are valued more than others, so ensuring the randomness of breeding required an adept level of foresight.
The trading and breeding mechanisms underpinning CryptoKitties allowed for a rudimentary path for experienced users to profit: buy a bunch of cats, breed them to make a rarer more valuable cat, sell the cat on the secondary market, and repeat. Another strategy is to buy a cat on the secondary market with hopes of flipping it for a higher price to a future buyer.
Silly and lovable digital pictures of cats selling for thousands of dollars had palpable value for media outlets thirsty to give a raging audience interested in the perceived absurdity of the cryptocurrency boom what they wanted. As more outlets wrote about CryptoKitties, often lampooning the game as a ridiculous fad, more users poured into the game to see what all the hubbub was about.
As the game became more popular and the demand for CryptoKitties increased, so did the prices– the game was soon engulfed in a speculative mania. At its peak, the game saw roughly 5,000 ETH in volume, accounting for 95% of Ethereum’s network usage.
The avalanche of CryptoKitty users wreaked havoc on the Ethereum network; Ethereum can process only a limited number of transactions at once, currently about 15 transactions per second. With CryptoKitties’ popularity, the daily average pending transactions jumped from 1,500 to 11,000, leading to longer transaction times and high gas prices. Now, new cat buyers, as well as any user trying to move tokens on the Ethereum network, was faced with extremely high gas fees and long wait times. e paying astronomical fees and waiting hours on end for their transactions to be confirmed.
Dubbed the CryptoKitties Congestion Crisis, the playful hackathon product turned viral sensation nearly slowed the Ethereum network to a halt. CryptoKitties led to a 6x increase in total network requests on the Ethereum network in December 2017 alone, ringing the alarm for Ethereum core developers and associated projects.
“Although we wouldn’t have pursued the CryptoKitties project if we didn’t want it to be a success, we did not expect it to catch fire quite like it did,” said Bryce Bladon, Co-Founder of CryptoKitties, in comments to Ethereum dev house ConsenSys. “ And I mean that in the metaphorical and, potentially, the literal sense. […] All signs were great. We thought we’d caught all the bugs and issues. We were expecting to have to deal with things like scaling at some point. We did not expect it to be in the first week.”
Successfully navigating the Congestion Crisis required close collaboration with the largest organizations utilizing the Ethereum network.
The CryptoKitties hype fizzled from the mania, further dampened by a bearish 2018 cryptocurrency market. The average CryptoKitty prices and volume declined– the game has an average volume of 50 ETH per week.
Axiom Zen & Dapper Labs: Post-Crypto Kitties
The story of CryptoKitties shares a similar arch as many products that achieve rapid popularity early on: the virality exposed several fundamental issues that would prevent the company from scaling.
Although the crisis was averted, it exposed the reality of how urgent Ethereum’s scalability issues truly were. With the DeFi craze of 2021 and the ensuing exorbitantly high Ethereum gas prices, the network has yet to solve this pain point.
The Dapper Labs team would build its own high-volume blockchain called Flow in early-2020. The Flow blockchain uses a native token, FLOW, to allow validators, users, and developers to participate in the FLOW network and earn rewards.
Leaning on lessons gained in its launch of CrypoKitties, Dapper Labs launched NBA Top Shot in 2020. The project would go onto generate over $205 million in revenue in February 2021, helping usher in a new wave of NFT creators.
CryptoKitties, however, is still an active project with a loyal base of users. The original version is considered less of a “game” than a collection platform and marketplace, but there have been several “layer two” games built by third-party developers. As a permissionless project, CryptoKitties enables unaffiliate developers to build their own applications as layers on top of the public CryptoKittiew smart contracts.
Popular CryptoKitty games include Kitty Race, where users can race their cats to win ETH, KittyHats, where users can further accessorize their cats, and even– get this– Wrapped Kitties, a platform where users can “wrap” their NFT Kitties into ERC20 tokens to be traded on DeFi exchanges.
As an early pioneer of blockchain-based digital collectibles, CryptoKitties has served as an inspiration for hundreds, if not thousands of NFT ventures.