According to data from cryptoslam.io, an NFT industry data aggregator backed by Mark Cuban, the number of unique buyers for the NFT collection BAYC has dipped to 263 this August, with 438 transactions in total. These numbers might be disappointing as the metrics were the second-lowest on record since its launch earlier last year.
The average transaction value of BAYC NFTs has fallen to $106,456 since the start of crypto winter earlier this year, compared to a peak price of $312,101 per ape collectible in April 2022. The collection reached its peak in terms of buyers and transactions in May 2021, with 3,550 and 9,255, respectively.
A contributing factor to the dipping prices of BAYC is owners of the collection using them as collateral to take out loans in Ether (ETH) and having failed to repay their debts.
Lenders could initiate liquidation to recover their loans once it is almost certain that the debts cannot be repaid (i.e. the “health factor” of the debts falling below 1). With the lowering of the health factor of at least 20 loans with BAYC as collateral falling to under 1.1 as of Aug 19, this might lead up to the NFT sector’s first massive liquidation event, “a death spiral for the BAYC ecosystem and the NFT market as a whole”.
Yuga Labs, the owner of both BAYC and CryptoPunk NFTs, is also being sued in a class-action lawsuit, which claims that the company “inappropriately induced” the community to buy BAYC NFTs at an “inflated price.”
The BAYC community Discord was exploited three times in the first half of the year, as hackers used sophisticated phishing techniques to gain access to the lucrative NFTs. To date, BAYC NFTs have sold for over 850,597 ETH or $2.4 billion at current prices. Previously, asset trading platform OpenSea saw NFT transaction volumes drop by 99% from their peak.
The Bored Ape Yacht Club is a collection of 10,000 unique Bored Ape NFTs— unique digital collectibles procedurally generated by an algorithm built on the Ethereum blockchain.