Non-fungible tokens, known as NFTs, are unique digital assets that took the world by storm starting in March 2021 with the $69 million sale of Beeple's "Everydays: The First 5000 Days," a collage of digital images. Since then, artists ranging from The Weeknd to 13-year-olds on Instagram have minted their work in hopes of eating a piece of the NFT pie.
In all the variety, however, one collective stands out: Bored Ape Yacht Club from Yuga Labs, a fast-growing marketer of NFTs. More than just selling a collection of one-of-a-kind, computer-generated 2D images of--you guessed it--bored apes, the developers at BAYC saw the opportunity to create something more sustainable, and thus more profitable in the long term: a community. A community that thrives on being different and irreverant. Or, if you prefer a more critical angle, the "tech bro equivalent of peeing on a hydrant," as Mashable recently put it.
Wherever you stand on the tech bro front, given what we know about our human nature and desires, BYAC's vision is working. What can forward-thinking brands learn from its success? Here are three lessons that you can learn from all those Bored Ape NFTs.
1. Uniqueness helps people earn status in a group.
Status matters. Ranking individuals within a hierarchy is fundamental to human social activity, and patterns of consumer behavior have closely aligned with these social calculations.
People own Lamborghinis and Birkins for this reason. What BAYC did differently with its NFT was capitalize on this intuition by providing a digital avenue for owners to signal their status. At prices reaching $6 million, when someone's Twitter or Instagram profile photo is a Bored Ape, you know they have money to burn.
The skeptics in the room will say, "But what about people who take a screenshot for free?" The NFT and say that while the two are indistinguishable in their appearance, there still is the ability to determine authentic proof of ownership through blockchain technology and laws around copyright infringement, if it comes to that. And it will. proponents clap back
It doesn't stop there. Not all Bored Apes are born equal. While two people can own the same Lamborghini, a Bored Ape is anything but boring. It's like a fingerprint--unique, unrepeatable, and non-fungible in the truest sense. The scarcity not only satisfies consumers' need for uniqueness, but also offers a one-of-a-kind digital identity that owners can boast about.
2. Consumers want to feel like they belong.
As much as human beings love to stand out, we also love to belong. It's the irony of human behavior: toeing the line between being unique and identifying with similar others, or what social psychologists call optimally distinct.
Humans' innate need to belong was placed only after primitive desires, like satisfying hunger, in Maslow's hierarchy of needs. Owning and displaying a Bored Ape NFT signals your membership to the Bored Ape Yacht Club, a social movement within which like-minded individuals can congregate as part of an overarching, exclusive experience that not many people can understand.
By now we should appreciate the point that it's not about the picture itself. It could have just as easily been Engaged Elephants, Anxious Anteaters, or literally any other random digital artifact. It's about what it means to now have that coveted belonging.
Identifying with this common experience strengthens social bonds between owners, and with that their self-concept and collective self-esteem.
Not to mention, for as little as $335, you can be a part of a members-only club with the likes of rapper Post Malone, NBA star Steph Curry, and drummer Travis Barker.
3. Reward-based brain circuitry responds to 'what could be.'
Spending this much money on a digital image may not have the same kind of pull if it didn't come with a host of ever-renewing, exclusive perks. Bored Ape owners are granted access to The Bathroom, a members-only collaborative graffiti board; the Mutant Ape Yacht Club, a collection of "evolved" Bored Apes that have been given a vial of "Mutant Serum"; the Bored Ape Chemistry Club, the marketplace where you can buy these serums for an average price of $127,000; and the list goes on...
What gives? Dopamine.
Not dissimilar to using slot machines at casinos, shopping online, or even just pressing buttons, the dopamine rush that results from seeing what is on the other side can be a significant driver of consumer behavior. Not knowing what your Mutant Ape will look like, wondering how it will compare with your friends' Mutant Apes, and envisioning the social banter that will result may be just enough to justify the purchase. And it was. Serum sales in January surpassed $22 million.
Marketers should take page from the BYAC NFT playbook. It may seem frivolous and silly on the surface, but don't be fooled. Underneath that bored ape is a deep well of human psychology and a lesson for driving engagement: Make people feel important and part of the group, and provide them with novel benefits that tickle and delight.