Yuga Labs sold 55,000 Otherdeed non-fungible tokens (NFTs) in late April. These NFTs gave holders land in the Otherside metaverse. Sold at a fixed price of 305 ApeCoin (APE-USD), the Bored Ape founder raised more than $320 million from the sale.
One APE-USD token was trading at around $19, so one of the NFTs cost approximately $5,800. With 200,000 Otherdeed NFTs ultimately available, their value is an estimated $450 million at current prices, down 71% since the April 30 launch.
According to The Block, Otherdeed #59906 recently sold on NFT marketplace X2Y2 for 625 Ethereum (ETH-USD), or $1.5 million, considerably higher than the $5,800 the seller would have paid for the Otherdeed plus approximately $2,236 in transaction fees.
Although the Otherdeed was the eighth-rarest in the sale of 55,000, it’s hard to fathom that someone would pay $1.5 million for a piece of virtual land that cost $8,036, but they say that value is in the eye of the beholder.
For Yuga Labs itself, it can’t sell any of the ApeCoin it got from the sale of virtual land for one year, so it naturally has more of a long-term view about the crypto’s price. However, as a Protocol article recently suggested, the usefulness of Otherside beyond making money for Yuga Labs has yet to be determined.
One way that Yuga Labs could ensure its 16.8 million ApeCoin tokens appreciate from their currently deflated prices is to build its own blockchain. It has asked the ApeCoin DAO (decentralized autonomous organization) to hold a vote to determine if it should move from Ethereum to its own blockchain.
It seems like a no-brainer to vote yes to this proposition from where I sit. The Economic Times recently pointed out that ApeCoin’s future is tied to Yuga Labs’ success. If gas fees are getting in the way of this, practically and economically, moving off Ethereum makes a lot of sense.
Yuga Labs is now valued at more than $4 billion. ApeCoin has yet to benefit from its close affiliation fully. Perhaps it will in the future.
In the meantime, volatility amongst cryptocurrencies of all market capitalizations remains the order of the day. Staying in cash avoids this problem. I would not be considering ApeCoin or any other crypto at this time. The risk/reward proposition is not tilted in your favor.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.