Bored Ape Yacht Club: The Case for Licensed Commercial Use Rights

“Jessica” (BAYC #1980)

Earlier this month, The Sandbox Game purchased “The Captain” (BAYC #3749) for 740 ETH. It is a record-breaking sale by a known project in the space, that wants to continue building the NFT ecosystem by curating a high-end collection. What makes The Captain desirable is his aesthetic which combines two rare traits — gold fur (1/46 apes) and laser eyes (1/69 apes). This combination makes The Captain the 27th most-rare ape based on analytics site Rarity Tools. For many in the Bored Ape Yacht Club community, Rarity Tools is viewed as a key metric in how Bored Ape Yacht Club tokens are valued on the secondary market. While rarity will always have its place in valuations, I believe that tokens with brand recognition will outpace them long-term.

Enter Jessica (BAYC #1980) — an ape I purchased in early-May for well under current market value. What drove me to Jessica was her aesthetic — a female, tweed suit-wearing ape with a focused facial expression. Immediately I saw her potential to represent a female CEO as there are 38 female CEOs of Fortune 500 companies. While I agree with Drew Austin that how a woman dresses should not matter, female executives in my field (finance) have shared with me how wearing suits was historically necessary for growing their careers.

All Bored Ape Yacht Club tokens featuring both a Girls Hair and Suit combination

It turns out Jessica was rare herself — 1 of 2 tokens with both a Girls Hair Short and a Tweed Suit — the traits that make her unique. If you consider the Girls Hair Pink and Tweed Suit trait combination as well, Jessica is 1 of 4 tokens with either pairing. Although there is also a Black Suit trait, none are paired with either of the Girls Hair traits. However, Jessica is viewed as a middle-of-the-pack ape when using Rarity Tools. Based solely on rarity score, Jessica won’t fetch much of a premium on the secondary market beyond the floor of her highest-rated trait which is the tweed suit.

Introducing Licensed Commercial Rights

When the Bored Ape Yacht Club launched in April there were two characteristics that set it apart; flat pricing at 0.08 ETH without a FOMO ramp and licensing of commercial rights. The former contributed to its quick sell-out, and the latter spurned a plethora of ideas of how ape holders planned to monetize their new tokens.

Nearly five months has passed since the initial Bored Ape Yacht Club release, and their brand has soared. Athletes such as Dez Bryant, Steph Curry and Brandon McManus all have acquired apes. The team has sold out multiple merchandise drops, including a collaboration with long-standing streetwear brand The Hundreds. There have been articles across multiple publications including The New Yorker. And auctions with both Christies and Sotheby’s occurred in September 2021.

This has created a recognizable platform that Bored Ape Yacht Club token holders can use as a launchpad for their own projects. If you were a part of the community in early May, you were expecting everything from merchandise, coffee, glassware, games, and more — an ecosystem within the ecosystem.

Use Cases for Licensed Commercial Rights

Last week, I posed a question on twitter asking how Bored Ape Yacht Club token holders were taking advantage of their respective ape’s commercial rights license.

Of the responses I received, shared below are some of the most promising or unique.

While the above examples indicate the creativity in the Bored Ape Yacht Club community, the reality is that monetizing an an ape’s commercial use rights is difficult. As an example, merchandise created by token holders would be challenged to find widespread traction because they are competing with the Bored Ape Yacht Club itself who has the sole rights to use their logos and other non-token specific intellectual property.

I asked my friend Vivek — an individual who focuses and holds rare tokens across multiple projects — for his view on projects licensing commercial rights to token holders.

DM used with permission

Vivek makes a great point in that a strong creative aptitude and/or business acumen are key drivers to leverage commercial rights. While it may be difficult for individuals alone to execute on commercial rights, the door has been opened to larger projects that pair token holders with professional content creators with the goal of building long-term success.


AlphaBetty is a character from an English children’s book. The NFT based off her character aims to ease the onboarding process into cryptocurrency and blockchain technologies. The project distributed a free coloring book to its token holders, and one of the pages was dedicated to intellectual property rights.

Reprinted with permission from a member of the AlphaBetty team.

What I like about this approach, is that AlphaBetty is onboarding new users and encouraging them to think about how tokens can be used commercially. IMHO this shifts how users of blockchain and NFT technology will view their tokens in the future.

Pixel Vault

Issue #2 of PUNKS Comic — Pixel Vault’s genesis project — will feature eight characters based on the Bored Ape Yacht Club. In July, Pixel Vault launched Ape Madness which was an elimination-style tournament to select eight “Elite Apes” to be featured in the second issue. Ape Madness aims to foster a long term relationship with the Bored Ape Yacht Club community, who supported the PUNKS Comic project during its launch phase.

Being featured in PUNKS Comic Issue #2 provides brand awareness for the participants. Pixel Vault is also providing each of the Elite Apes with a collectible NFT of PUNKS Comic Issue #2 featuring their ape, which can be used to mint a limited-number of copies also branded with their ape. Sales will utilize a Euler-beats style bonding curve, and each Elite Ape will receive royalties on any branded prints they sell. The mechanics are still being developed and additional details are forthcoming from the Pixel Vault team.

Note: While out of scope for this article, Pixel Vault is building their own ecosystem through their PUNKS Comic and MetaHero Universe. Their core and generative MetaHero NFTs come with limited and full commercial right licenses, respectively.

Jenkins the Valet: The Writer’s Room

The Writer’s Room is a project that evolves publishing by making it a community-generated process. The Writer’s Room is comprised of 6,942 tokens, each of which provide voting rights and an acknowledgement, plus other various levels of integration in the book. Separate from the tokens themselves, holders have the option to license their ape to the team in return for a fee. For the purpose of this article I will focus on the rarest token — the WAGMI Yacht — and defer to their official site for other details.

WAGMI Yacht; Jenkins the Valet

The Writer’s Room team views their project as a character development incubator. The genesis story will focus on the Bored Ape Yacht Club and their rising brand. The Writer’s Room team will leverage the Bored Ape Yacht Club’s popularity to build depth around the apes holding WAGMI Yacht tokens.

The WAGMI Yacht token provides 215 votes to drive the creative process, and offers the highest tier of token integration into the story. Holders of a WAGMI Yacht token can choose one of their Bored Ape Yacht Club tokens to be included as a character in the genesis book. The combination of creating a backstory and including the ape in the genesis book adds intrinsic value to the token being used. There are only 69 WAGMI Yacht tokens, and they comprise 0.99% of all available tokens in the project.

Estimated Valuation of Licensed Commercial Rights

And now to the question that I am sure most of you have been asking throughout this article — what is the tangible value? Creating a brand around your token is a new concept that has limited use testing, and applying tangible value is difficult. Below is how I am personally analyzing the future value of a token with a strong personal brand.

The above chart highlights how a branded token could be valued in the future based on the following assumptions:

Based on the above, even the most conservative scenario (99% discount, 1x multiplier) would indicate a value of $250k, which is nearly double the value of a current floor ape (39.9 ETH, $138k). All other scenarios further highlight the upside of a strong brand.

Jenkins the Valet as a Use Case

To highlight how this could look in the future, let’s look at Jenkins the Valet himself. A self-identified floor ape, the Writer’s Room team have made Jenkins the Valet one of the most recognizable apes within the ecosystem. A few days ago I posted a quick straw poll on Twitter to highlight this.

Although only 154 people responded, over 77% of the respondents had heard of Jenkins the Valet. He doesn’t have gold fur or blue beam eyes — but he has a strong service ape aesthetic and his brand has been built around those traits. Jenkins the Valet has transcended beyond being strictly valued as a token, and the Writer’s Room team explained to me that his value can no longer be fairly represented as an OpenSea secondary market transaction.

Final Thoughts

Yesterday, Jake Udell posted to Twitter that he was placing “millions of dollars in bids” on apes, focused on a collector’s approach by placing a premium on apes with top rarity scores. I responded with a brief tweet highlighting the premise of this article.

While rarity will still have its place in valuations, the current focus on Rarity Tools is a centralized approach that is heavily reliant on pseudo-arbitrary values from one site. I have been critical of Rarity Tools in the past — particularly with how they value apes with female traits. I am not the only one with similar views. A few examples include:

I believe that pairing the global recognition of the Board Ape Yacht Club with individual tokens that have their own recognizable brand, will outpace the value of pure rarity plays long-term. While brands can also be built around tokens with top rarity scores, the ability to buy lower rarity tokens at a fraction of the cost and adds value.

The aforementioned projects are the building blocks to de-prioritize rarity and change the narrative on NFTs to long-term utility. We are so early in this space that these projects are literally creating the intellectual property for you, and offering a platform to launch your character and distribute it. I believe there is a short window of opportunity where the long-term value outweighs the short-term costs.

The Writer’s Room is my top asymmetrical bet for building a brand around your Bored Ape Yacht Club token. Today’s floor on the WAGMI Yachts is 8.8 ETH (~$30,000) — a relative bargain when you consider the intrinsic value that an ape with brand recognition could have in the future. Citing my analysis above, how many of you would spend $30,000 if you believed it would add a minimum of $110,000 in long-term value to your Bored Ape Yacht Club token?

To be fully transparent, I have a strong conviction in the success of the Writer’s Room project. Jessica was one of the apes to receive an early background story from Jenkins the Valet. Seeing the promise of the value early on, I minted 15 tokens from the Writer’s Room project including two WAGMI Yachts. This puts me in a favorable position to continue building the Jessica brand and driving value to her long-term. I am an ardent supporter of this approach and I have been vocal on twitter about my plans.

Thank you for reading, and I look forward to continuing the discussion about commercial use licenses.



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