Welcome to This Week in the Metaverse, where Fortune rounds up the most interesting news in the world of NFTs, culture, and the metaverse. Email marco.quiroz-gutierrez@fortune.com with tips.
When people think NFTs, they often think of Bored Ape Yacht Club. Since it launched in 2021, the profile picture project’s fate has been inextricably linked with non-fungible tokens and vice versa—for better or worse.
And with the NFT market spiraling, the Bored Ape Yacht Club has been dragged into a whirlpool.
Although still leading all collections in trading volume, in June, BAYC’s price floor hit its lowest point in 20 months, according to a report by DappRadar. The lowest purchase price for one of the unamused simian cartoons was about $52,000 on Sunday. Just a month ago you couldn’t get one for less than $90,000, almost double Sunday’s price, according to CoinGecko.
The collection’s decline in value tracks with the overall NFT market, which fell 38% quarter-over-quarter to just under $3 billion, DappRadar reported.
The falling price floor has popped the bubble of some collectors who have tried to get liquidity by using Bored Apes as collateral.
On Monday, BendDAO, a lending protocol that helps facilitate some of these NFT-backed loans, had 27 Bored Apes and 25 Mutant Apes up for auction, as reported by Protos.
According to Gabe Frank, the cofounder of NFT lending protocol Arcade, some investors got in over their heads.
“Some ape NFT owners are over-leveraged, meaning they can’t repay their loans or are facing forced sell-offs on certain platforms where liquidation occurs,” he told me via email.
Some have blamed the mass liquidations on Blur, the upstart marketplace that also has an NFT lending protocol. Others noted that Azuki’s missteps with the new Elementals collection exacerbated the problem. Whatever the root cause, the ripple effects have been significant.
The liquidations caught up with one Bored Ape owner, Ramon Govea, the founder of Myth Division, who took out a loan to help build his Web3 business.
“Many will celebrate this news, because that’s the nature of this space, but I have worked with integrity the entire time I’ve been here, so it’s painful to think that doing the right thing often ends with well-intended people getting rekt and scammers moving on unscathed to spin another scam,” he wrote in a Sunday tweet.
A day I feared has finally come.
Over the last 2.5 years I have spent over to $1 Million in NFT profits investing back into the @MythDivision community- paying employees, consultants, devs, artists & executives.
Many of those people fell short in helping Myth Division flourish,… pic.twitter.com/bNGfXHrlHt
— American Ape (@RamonGovea) July 2, 2023
Look no further than Crypto Twitter to see more of the immediate consequences. Several people said they liquidated their BAYCs over the past few days, some because of the lower floor price, some because they just made bad calls.
Yo bro why is my whole timeline of bayc asking for donations to not get liquidated lmao??!?
— Manuzxq (@Manuzxq) July 3, 2023
There have also been random acts of kindness. But sometimes hard lessons, are just that…hard.
If you ever had any doubt about @BoredApeYC community…i was devastated today as i thought my ape was gonna be liquadated…many apes dmed me in support…one ape in particular @apeapebaby legit offered me 8.5 eth to help me pay it back…HE SENT IT AND …I did !!! and im never…
— 🍌 Marty McApe-BAYC 7436 (@chrisdevlin7700) July 4, 2023
In other news
Major League Baseball is set to debut a new virtual stadium this weekend. Created by metaverse technology company Improbable, it will let fans interact and watch games together in the digital ballpark through MLB.com, according to a press release.
Tom Brady-cofounded company Autograph is shifting its focus away from NFTs after the company’s revenue fell significantly in 2022. The company is instead focusing on helping celebrities build and foster their fanbases.
Open platform fxhash is set to expand from the Tezos blockchain to Ethereum. The generative art platform, which hosts work from artists such as Zancan, William Mapan, and Melissa Wiederrecht, decided to expand beyond Tezos because of feedback from partners, according to Decrypt. The outlet noted that the Ethereum blockchain offers artists better visibility and higher asking prices for their work.
Bitcoin NFTs, or Ordinals, reached $210 million in trading volume in the second quarter, according to a report by DappRadar. Trading volume for Ordinals sharply increased in the second quarter, jumping from $7.18 million in the first three months of the year.
NFTTrade, a marketplace for non-fungible tokens, integrated the XRP Ledger into its platform this week. Integrating with the open-source blockchain will allow the platform to offer protocol-level royalty protections for creators.
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