Looking back at Yuga Labs over the past year, is APE still a good target for bottom fishing in a bear market?

Is APE still a good target for bottom fishing in a bear market at Yuga Labs over the past year?

Institution: Mint Ventures

Author: Scarlett Wu, Investment Manager at Mint Ventures

It has been a year since the last review of the Yuga ecosystem (see “APE Collateral Approaching, Regulatory Pressure, Re-evaluating the Value of Yuga Labs Ecosystem at Key Points”). Yuga Labs, which was once revered, continues to deliver products that often meet or occasionally exceed expectations. However, the prices of ecosystem tokens and NFTs have already burst the market’s high bubble fantasy for the metaverse/crypto IP. With AK’s pinned tweet on Twitter, coupled with the fundamental aspects and delivery of the Yuga ecosystem having refreshed the conclusions of previous research, as a long-term follower and participant in the game and metaverse track in Mint Ventures, I will reevaluate Yuga Labs and its related ecosystem.


This study attempts to answer the following questions:

  1. Has the product delivery of Yuga Labs and ApeCoin DAO in the past year been worthy of the community’s trust? (The support for NFT and $APE prices respectively will be explained in the following text)
  2. What are the upsides and downsides of the subsequent ecosystem? Are AK’s inferences reasonable?

1. Yuga Labs Ecosystem Annual Review

The previous Yuga Labs ecosystem review was published in October of Year 22. In these nine months, the fundamental changes of Yuga Labs can be summarized as follows:

1.1 Yuga Labs Main Storyline: MDvMM Arrived Late

In the seed round pitch deck circulated by Yuga Labs, the storyline of MDvMM (Mech Dog vs. Mech Monkey) was supposed to be a three-month-long event. It was scheduled to start in August 2022 and end in October 2022.

Screenshot of Yuga Labs' circulated pitch deck

However, due to more intense internal personnel changes, the first message of this storyline was released by MDvMM on November 25, 2022: The Trail begins this Christmas.


This also marked the starting point of the NFT surge in the Yuga series. Taking BAKC as an example, the subsequent release of key narratives and game rules became crucial points for the price changes of BAKC.

LianGuairsec, Charted by Mint Ventures

MDvMM timeline summary

In the narrative of MDvMM, there are many key points worthy of discussion. This is not only highly related to the prices of NFT/FT of Yuga itself, but also involves the construction of the entire NFT community narrative. Yuga Labs, once the pioneer of NFT narrative universe, can it still bear the responsibility of saving the NFT market with a new narrative?

1.1.1 Common Issues with Incentivized Games – Criticized Web2.5 Anti-Cheating Measures

Since the beginning of Dookey Dash, due to the expectation that “Sewer LianGuaiss ranked higher can be upgraded to NFT with higher value in later stages”, slave players and professional players may be able to earn hundreds or even thousands of USDT per order in the market. (In fact, this speculation is true – at the time of writing this article, the floor price of higher-level HV-MTL HOLO is 6.5E, while the floor price of the most common HV-MTL is 0.6E.) The market’s expectations for Yuga Labs games and trust in the fairness of the games have created such a profitable trading market.

Unfortunately, although there is “suspicious” detection during the game process, there are still simple ways to bypass the anti-cheating system:


The core logic is that although Dookey Dash appears to be random and cyclical, the selected process is actually limited. This process actually depends on a “course seed”. As long as the same seed is inserted locally multiple times when entering the game, the exact same game process, from rewards to obstacles, can be generated. The anti-cheating logic set by Yuga Labs itself is that as long as the “game process corresponding to the local course seed” matches the “actual player input data sent to the server”, the player is considered genuine. With a determined process map, cheaters can design a rule-based bot or use the best path algorithm to efficiently pass these obstacles while collecting fragments. Because the bot can simulate mouse movement and clicks, it is difficult to determine if a player is cheating based on the bot alone. Players can even livestream their gameplay on Twitch while simply moving the locked mouse randomly, while the monkey on the screen accurately dodges obstacles and collects enough fragments, pretending to be deeply fascinated, and receiving cheers and applause.

Unfortunately, the author @xClearHat believes that Yuga could have avoided/delayed the complete invasion of the game by cheaters through the following methods:

  • Provide process maps and data on the server side instead of locally: This means higher costs because low latency requires bandwidth, and bandwidth means dense deployment of servers, while Dookey Dash players are spread all over the world.
  • Encrypt game rules: Two days before the end of the first round of Dookey Dash, the game is shut down for maintenance, and the JavaScript file is recompiled into a new file that partially obfuscates cheaters. Previously, the files used by the game were almost plaintext, making the above reverse engineering exceptionally simple. Since Dookey Dash is a time-limited game, as long as cracking it is complex and time-consuming enough, it will effectively maintain the fairness of the game.
  • Establish a dynamic system to provide process seeds at random intervals: Players can no longer directly generate game processes and correspond with the server at any time using a specific process seed, but need to find the right time – this will greatly increase the difficulty of cheating.

Despite the widespread dissemination of this thread, it couldn’t stop Yuga Labs from announcing the final result of the game – the first-place esports player was not actually the first place, but after kicking out the cheater based on the game video, he received a valuable key. But how many cheaters who didn’t have the greed to compete for first place with the esports player and just wanted to maintain a higher ranking have not been discovered? We don’t know. In the world of blockchain games, not all games are absolutely fair and just in terms of results – at least not web2.5 games.

Cheating system gameplay of Dookey Dash created by @xClearHat

Perhaps the widespread dissemination of this thread is enough to attract attention, or perhaps Yuga Labs had already planned to change their strategy in the next phase. HV-MTL’s Forge used a clever way to weaken the impact of bots and cheats on the competitive experience: voting. In the six stages, the AMP level of each stage is determined by ranking, which is determined by voting, and users can choose to upvote and downvote – even if they use robots to boost their HV-MTL to the highest, as long as the base screen name is not true or other players agree that the increase in votes is not reasonable, it may also be downvoted to a very low ranking.


The self-supervision of the community is certainly a good solution, shifting part of the audit cost from the project itself to the game players. Reaching the highest ranking not only requires advanced computer technology (those operations that require occasional mouse clicks can still be completed through cheats, although there is a risk of being banned), but also requires extensive social relationships (group chats for mutual voting), and sufficient capital (if there are not enough heads, more votes from mechs can be used to make up, or purchase votes at a price of about 1 USDT each through OTC). But the question is, why invest so much time and effort in a game with average gameplay and a focus on ranking manipulation? Currently, it seems that the main ways to campaign are still “mutual voting” and “having more mechs to vote for oneself”. Although Yuga has set up Twitter account binding for non-owners to vote, it is actually used to distinguish rankings in the score range of the same owners, and it is not the key point of distinguishing rankings (from the results, there are indeed many situations in the same score range, so it is necessary to attach importance to Twitter account binding for voting.)


The first season that ended at the end of July has already given some clues. With over 20,000 HV-MTL, only 133 of them have obtained the highest level of AMP. The AMP in the first season corresponds to the head of the mech, and the ongoing second season corresponds to the weapon of the mech – if Yuga Labs can achieve or even exceed expectations in delivery, the six AMPs should form a pretty cool mech – but will there still be a myth of thousands of ETH buying golden monkeys or keys?

AMP Concept Map

Cheating has always been a key element in the traditional gaming industry to disrupt the Magic Loop. Web3 games, due to the introduction of richer incentives, need to pay more attention to the massive bot and gold farming communities. Community self-supervision may be a good solution, and being bot-friendly may be another solution – auto battler mode has been increasingly introduced into the existing game mechanisms of traditional game developers. When auto battler simplifies most player interactions in the game, what we need to consider is what kind of experience players want. Is it the result of account balance growth through play & earn, the satisfaction of experiencing another story, the pleasure of showcasing skills by defeating bosses one by one, or the symbolic social status that can be boasted among friends?

From Dookey Dash and HV-MTL, the core goal of players may be simple – to acquire scarcity, which means NFTs with higher potential value. There may be social value and cultivation experience, but not much.

1.1.2 Token Release and Economic System Consumption – The Value Capture of Water Catching Fire

When it comes to the consumption and value capture of $APE, we need to first understand a concept – where do the consumed tokens go?

Since players directly use $APE, it is not a buyback; $APE will not be issued or burned on the total supply of 1 billion, so there is no burning deflation – in fact, the income of $APE goes into Yuga Labs’ wallet. For Yuga Labs, this is the revenue of their game.

According to Arkham’s analysis, a part of the income from the Dookey Dash mini-game enters Coinbase shortly after the game ends, and another part briefly stays in another multi-signature wallet before also entering Coinbase.


In other words, the consumed $APE does not lead to a long-term decrease in circulation, but rather brings a certain degree of buying pressure and a short-term lock-up of circulation – as for how long this time is, it depends on Yuga Labs’ mood. And if Yuga Labs holds a large amount of $APE, it may also bring the problem of concentrated selling pressure.

Under this premise, we can analyze the $APE consumed by Dookey Dash and HV-MTL respectively:

Regardless of whether Yuga Labs received tokens that were immediately sellable, even if the project team did not sell these tokens, it would only be a small amount of token rewards distributed by the staking system at the same period and the leftover tokens unlocked by investors and the project team.

1.1.3 NFT Utility vs. Narrative——Why is the price of BAYC no longer glorious?

Since the price of BAYC fell from the “floor stabilizing around 50E”, the market has always been puzzled: why is the price of BAYC no longer glorious despite the consensus?

The answer may be very simple: the past glory was that retail investors rode the train of wealth creators – once the big players who hoarded BAYC left the market, the liquidity consensus and value consensus of BAYC disappeared. Among them, machibigbrother.eth and Franklin are the most prominent.

The former became the core holder and evangelist of the NFT series in BAYC mint, holding dozens to hundreds of BAYC, while the latter used “Franklin has 61 Apes” as his Twitter name to show his identity in the BAYC community. He also staged several dramas of smashing and liquidating on his own through BendDAO, and was jokingly referred to as the monkey market maker (for details, refer to Jessica’s analysis article “BAYC Price Drop Reappears: A Comprehensive Analysis of the “Crisis” and “Opportunity” of NFT Lending Leader BendDAO”).

During the market downturn in the past six months, machibigbrother.eth was forced to accept 71 BAYC in February this year because he trusted the bidding wall of Blur and accidentally got caught up in it. He suffered a large loss and sold all the BAYC at once, causing the price of BAYC to plummet. On April 19, Franklin announced a temporary retreat from Twitter and sold all the remaining BAYC in his hands, reducing the number of big players willing and capable of catching a large amount of BAYC dumped on the market.

On June 22, after machibigbrother.eth built up a position in BAYC, he proposed the ApeCoin DAO proposal, suggesting that the DAO use its treasury to repurchase NFTs to maintain the price of NFTs. When the information fermented in the market, on June 25, he sold 39 BAYC in his hands. Obviously, the belief and narrative in the eyes of small holders are just tools for hype and profit in the hands of big players. (In fact, there is still a considerable distance from the proposal to the voting of ApeCoin DAO, and machibigbrother.eth’s previous proposal has never been pushed into the voting stage and recognized by the DAO, but the news itself is enough to scare the public who do not understand this ecosystem and gain certain market feedback.)

This reminds me of the conversation I had with Shim before: the narrative consensus at the beginning of an NFT project, the most intuitive manifestation of which is the price consensus – not only in the NFT market, but also in the traditional luxury goods industry. Looking back at the changes of the past year, it is clear to see that Yuga Labs’ price consensus is declining while the consensus on game product strength is rising. In other words, its NFTs are transitioning from luxury goods that were difficult to price and skyrocketed overnight to consumer goods that can be priced in comparison with peers.

As BAYC transitions from a consensus of being difficult to price, to becoming a tool for calculating airdrop prices and discounting cash flows, and then becoming part of in-game items and functional bonuses – it is moving from pure narrative to more and more utility. Utility raises the price baseline, but it also limits the price ceiling. At the same time, holders are transitioning from being collectors who “HODL and show my status” to speculators who “ambush before the airdrop and sell after the airdrop”. Even though Yuga Labs has tried to position BAYC, MAYC, BAKC, HV-MTL, and $APE differently in terms of psychology, it still cannot change the result that they influence each other and BAYC has been pulled down from its pedestal as a luxury good.

1.2 Otherside Subplot: Low Prices, but Expectations for Game Quality

In March 2023, Otherside 2nd trip went live, dividing players into four teams led by esports anchors and KOLs from the gaming and NFT communities, competing in scores. Unlike last year’s 1st trip, this experience truly achieved 1) interactive and data upload capabilities for thousands of people on the same screen, and 2) gameplay attempts with thousands of people on the same screen.


Although the author was limited outside the game (despite having over 50,000 Otherside holders, only about 8,000 people were actually able to enter the game), I could still experience the magnificent graphics of UE5 and the thrill of battling with thousands of people through live streaming. From single-player games to MMOs, from MMOs with dozens of players to thousands of people on the same screen, technological upgrades have brought about new possibilities for gameplay, and Otherside is likely the pioneer of gameplay with thousands of people on the same screen.

The delivery of this experience by Otherside is undoubtedly beyond expectations, but such exceeding expectations has not led to an increase in the price of Otherdeed. The prize for the winners of the 2nd trip is a helmet, Otherside Relics, with a total of 2,220 pieces, airdropped to the wallets of the winning team’s corresponding Otherside holders. On the day of the airdrop, the price of Otherside Relics reached as high as 0.7 ETH, and it is now still at a floor price of 0.2 ETH.

However, the price of Otherdeed is not so fortunate. The market seems to interpret the expected airdrop brought by Otherside as a negative factor – for every new NFT distributed, it means that the number of NFTs that Otherdeed can obtain in the future will be less, resulting in a decrease in future cash flow and a decrease in NFT valuation.

The subsequent separation of Otherdeed further intensified the decline in the price of Otherdeed,

  • Otherdeed (without Koda): Separated into Otherdeed ExLianGuainded and Otherside Vessels. Vessels will evolve into Mara in the subsequent Mara mini-game and can be combined with Koda to form Kodamara.
  • Otherdeed (with Koda): Separated into Otherdeed ExLianGuainded, Otherside Vessels, and Otherside Koda.

Obviously, Otherside hopes to maximize the game attributes of NFTs. However, from the perspective of investing in NFT series, overly complex series nesting will confuse most non-hardcore players and the dispersion of liquidity will be difficult to support NFTs returning to their original prices. As a result, we have seen the continuous decline in the floor price of the Otherside series.

On July 28, 2023, Otherside officially released a leaked video of the offline Playtest. The experience is no longer limited to coloring mechanical exploration but a real exploration of jungles, mountains, lakes, bars, etc. It seems that the official launch of the Otherside game is no longer just empty talk, and it may achieve the expected experience of the first Web3 game.


1.3 ApeCoin DAO Sub-line: Ecological Deficiency, Astonishing Inflation

In the past half year, ApeCoin DAO has only passed over twenty proposals, many of which are related to governance processes and improvements in Ape Staking efficiency (which seems quite absurd – it is hard to imagine that a company established in a traditional way would still spend a lot of time improving departmental configuration and management processes after operating for more than a year). Some are rewards for $APE contributors (which also align with the interests of voters). The remaining parts are mainly related to BD and narrative, creating movies, games, and comics with Ape’s philosophy as the core narrative. The only proposal that seems more promising is the establishment of an Ape ecosystem project incubator led by Forj – although it is still too early to see substantial output.

From the ApeCoin DAO Council composed of initial investors to the transfer of power to Council members elected by the community, we can see that innovation and courage are actually decreasing. The actual participants in DAO activities are also scarce. With billions in circulation, the total number of votes in each vote is around 10M. It seems that $APE holders are not concerned about governance content. For them, the greatest utility of $APE is only staking.

Recalling what we mentioned before, the introduction of ApeCoin DAO’s use cases for $APE:

  • Ecosystem Token: Yuga Labs’ products are all paid with $APE, but the actual demand does not match the circulation (see 1.3). There is also no significant growth in the DAO ecosystem, making it difficult to see the possibility of matching ecosystem value with currency value.
  • Means of Payment: Although some NFTs from Gucci / Times / OpenSea do accept $APE as payment, this is more of a gimmick than an actual use case. Few people are willing to hold a token with fluctuating prices for a long time as a payment tool.
  • Staking Profit: The price of $APE has dropped from $5 at the beginning of staking to less than $2, which means that without hedging, there is a high possibility of heavy losses. But if all staking users are hedging, do stakers really believe in the future of $APE?

It seems that these use cases, under the inaction or incompetence of ApeCoin DAO (or the entire Yuga Labs token/NFT holder community), only realized staking profits – pure coin mining with coin. Even if users make a profit, does it really benefit the Yuga Labs brand? Staking + rewards is just a means of buying time with tokens, leaving opportunities for ecosystem construction. If the ecosystem cannot thrive during this time and inflation is quite terrifying, it will be a great blow to the token price, and the reality can only be waiting for the token to be halved again and again.

2. Potential Upside and Downside Deduction

Reviewing the problems, challenges, and achievements of Yuga Labs, we have summarized the following potential Upside & Downside points:

2.1 Potential Upside

  • Otherside Launch and Fun
    • Now it is the 2nd trip, but there have been rumors of offline playtests. Yuga Labs’ previous level of delivery in games has not disappointed.
  • Breaking the Circle of Audience
    • Deep brand cooperation (such as previous adidas / Gucci collaborations, which not only depends on the team’s BD level but also needs to conform to the joint trend of the brand in the larger environment)
    • Derivative games/movies, etc.
  • Securities Narrative Reversal
    • Last October, Yuga Labs was investigated by the SEC, but the June SEC lawsuit list does not include $APE.
  • Ape Consumption
    • Value capture in mech games (in terms of previous activities, consumption is relatively limited compared to inflation)
    • Ape Fest (the next offline gathering in HK may drive high net worth individuals in Hong Kong to purchase NFTs)

2.2 Potential Downside

  • Price Anchoring and Narrative No Longer + Insufficient Liquidity
    • Lack of market makers (previous buddies and franklin) and high dependence of the community on Yuga Labs. The price will continue to fluctuate with the effect of Yuga Labs’ new activities. However, in the current low liquidity market, the price does not fluctuate much with positive news, but it will drop significantly with negative news. Unlike the decentralized art collection logic of Punk, most collectors do not care about the temporary price. Without the desire to sell, there is no ending of being pulled off the altar due to liquidity shortage.
  • Token Inflation
    • $APE still has a large inflation rate, and investors may further sell off (the current price is already lower than the primary market valuation of 2 billion, which is lower than the 4 billion given by VC at that time, although what VC holds is not just the mapping of tokens, but also Yuga Labs’ equity corresponding to IP).
Source: Token Unlock
  • There are almost no use cases for the token
    • Payment purposes – very few people use $APE for transactions on OpenSea, it’s just a gimmick
    • Ecosystem development – ApeCoin DAO has been extremely inefficient in the past six months, the organizational structure of the DAO is inefficient and lacks incentives, which instead hampers the level of Yuga
    • Staking – Currently the only real use case. However, the APR (Annual Profit Rate) has dropped from over 300% at the beginning to 50% (pure $APE)/140% (paired NFTs), resulting in profits for hedging miners but heavy losses for naked stakers

Currently, it seems that the downside is still greater than the upside. Of course, the delivery level of Yuga Labs may mean that they will still stand firm in the industry (not dying but possibly being surpassed), but perhaps “bubble bursting” will still be the major trend of Yuga Labs’ assets for a long time in the future.

References and Acknowledgments

This article could not have been written without the discussions on cheating in Dookey Dash with @Noah_nftn and @Z57831357, as well as the detailed data tracking of HV-MTL by @CryptoScott_ETH. Special thanks to @anymose96 for the detailed analysis and current status sharing of HV-MTL rules, and to @0x_bobo and @alLianGuaicacheeze for their brainstorming and discussions at every critical point in time.


  • https://www.panewslab.com/zh/articledetails/w23ypcwje9p9.html
  • https://snapshot.org/#/apecoin.eth
  • Websites of Yuga Labs, MDvMM, Otherside