Recently there has been a milestone event in the NFT world, all initiated by the team behind the Bored Ape Yacht Club, Yuga Labs. First it acquired the IP of Cyberpunks and Meetbits—Cyberpunks was a pioneer of the NFT market, even one of its creators, while Meetbits was a derivative project of Cyberpunks.
Then Yuga Labs launched Apecoin, part of which was airdropped to the holders of all ape-related NFTs (BAYC, MAYC, BAKC). One BAYC could receive a little over 10,000 apecoins.
Apecoin is said to play a role in the metaverse project the team will build next. What exactly that role will be is still unclear, but the market has driven the price up very high. When Apecoin was first released, it briefly traded at $20–40 each, then quickly fell to a few dollars, only to rebound a day later to $13–14.
In other words, each BAYC holder could conservatively receive an airdrop worth more than $100,000, which after conversion is roughly equivalent to more than 40 ether.
A while ago, BAYC was trading at around 70-something ether, a local trough. After two rounds of news, it rose to over 90 and even over 100. After claiming the airdrop, of course, it immediately fell back down (the equivalent of going ex-rights), at one point dropping to the 70s, but it soon rebounded again, and now the floor price has apparently become 101 once more.
To be honest, I was somewhat surprised that apecoin received such fervent enthusiasm, because BAYC itself is not that expensive in the grand scheme of things, and the airdrop accounts for only a small portion of the total apecoin issuance. More apecoin will still be distributed later by other means. Right now, the apecoin a single Bored Ape has received out of thin air is almost half its price, which seems absurd no matter how you look at it. If people really had such faith in apecoin, why didn’t they buy BAYC in advance? Hindsight makes it obvious: once you know a coin is going to be issued, you rush in and buy Bored Apes, make 50% out of thin air, and then still sell the Bored Ape at the original price—that 50% is simply “making something out of nothing.”
Of course, in fact most people could not have foreseen that apecoin would be so popular. And the higher the coin price was driven after issuance, the more people chased it; its influence spilled out of the circle, many people who had not understood NFTs before took notice, many who had been waiting on the sidelines were stimulated, and more people were drawn by Yuga Labs into the “ape universe.”
Using a continual influx of new players to make old players rich—this model really does resemble a pyramid scheme. But unlike traditional pyramid schemes, it is not a structure based on uplines and downlines or sales commissions, but rather one that expands through making something out of nothing, one begets two, two begets three.
These NFTs are nothing more than some copyable images, yet through records on blockchain technology, they become a certain kind of unique existence, and value appears out of thin air. Then first-generation NFTs can be used to distribute second-generation NFTs: for example, BAYC holders receive BAKC and MAYC, Punks holders receive Meebits, and so on. If you choose to sell them, that is profit made out of thin air. In addition, holders can often enjoy certain privileges within the community, such as the chance to win whitelists for other new projects (which allow you to mint new NFTs in advance at a low price); the benefits obtained through whitelist opportunities, of course, also count as making something out of nothing. Finally, there is this current round of token issuance: directly issue a new coin, and if you sell it for cash that is also making something out of nothing. And by holding an NFT, you can continuously obtain these out-of-thin-air profits thereafter, so the NFT’s own price naturally rises with the tide.
What can these coins made out of nothing do? Nothing more than develop a game or something in the future, where inside it you can buy many more out-of-thin-air game items and the like. These game items may again be new NFTs, continuing another new round of cyclical derivation.
Thus the entire bubble of making something out of nothing can be blown very large, one link following another.
Am I denouncing the NFT bubble or a blockchain scam? No. “Making something out of nothing” is not necessarily a pejorative term.
Theoretically speaking, our universe itself is a product of “making something out of nothing,” arising from the void through the Big Bang. According to quantum mechanics, vacuum fluctuations can borrow energy from nothingness to generate positive matter and antimatter, and then after the positive and negative matter annihilate, the energy is returned. Such things are happening every moment in the void of the universe. The Big Bang may have been just one such “fluctuation,” with symmetry breaking caused by some reason, so that in the actual universe positive matter vastly outnumbers antimatter, and thus did not annihilate immediately.
Of course, talking about the Big Bang is getting too far afield. The credit-money system we are familiar with is also based on the principle of making something out of nothing. Since the collapse of the Bretton Woods system, the U.S. dollar and the fiat currencies of other countries have broken away from physical anchors such as gold, and instead are produced out of thin air. Of course, financial experts will tell you that it is not arbitrary money-printing: for every dollar the Federal Reserve issues, it needs to purchase a corresponding amount of government bonds, and so on. But this principle is also like borrowing energy from the vacuum; it is nothing more than a clever way of making something out of nothing. More importantly, the money actually circulating in the market—the so-called M1 and M2—grows in a series of magical transformations, layer by layer. An initial sum of money is lent out by the bank, the borrower deposits it back into the bank, the bank lends it out again, the borrower deposits it again… and it can become many times larger. This trick is called the “money multiplier,” which is why the central bank can regulate the money supply by adjusting reserve ratios and lending rates; that is the underlying principle.
Although I sometimes take a jab at fiat currency, the problem I am aiming at is that such an important “regulation” is in the hands of a small group at a center somewhere, and investors around the world are all watching the Federal Reserve chair’s face for cues—that is what is laughable. As for the value-emergence mechanism of “making something out of nothing,” one must admit that it is effective.
I think the value of Bitcoin also comes from “making something out of nothing,” from the “retention” of hodlers. An early article already said: “The long-term value of Bitcoin depends on ‘long term’ itself. Whether speculators, merchants, or hoarders, they all keep the coins in storage in different ways, and the length of this retention determines Bitcoin’s value.” Or, to put it more generally, the value of money comes from some kind of “making something out of nothing.” In my first article on Bitcoin, I discussed this: “Money is a medium that borrows from ‘nothing’ and finally returns to ‘nothing.’”
Besides money, in fact “value” in the general sense is also to a large extent something made out of nothing. Of course, things that solve basic needs of food and shelter, grains, energy, and so on, are indeed relatively substantial. But once those basic needs are met, the value of higher-level things becomes much more illusory. For example, souvenirs, luxury goods, ornaments, and so on. Their value depends on people’s recognition of certain abstract ideas: if people think stamps are valuable, then they have value; if people do not know what a stamp is, then it is just scrap paper. And the more people who recognize it, and the more strongly they do so, the higher the value that can be bestowed. If future generations no longer recognize it, then certain values disappear.
From the universe to value, everything is in fact “a dream, an illusion, a bubble, a shadow”; the difference is merely that some bubbles are blown larger and last longer. Those big bubbles that persist for a long time will ultimately perish too, but within them, more new bubbles layered one atop another may have been nurtured. New bubbles bursting, merging, or expanding—that is simply how the richness of the world is produced.
Some relatively sturdy bubbles often require two forces: one is a mechanism of self-circulation and self-maintenance; the other is a mechanism of reproduction, proliferation, and continual expansion.
In my first article on the metaverse, I mentioned that from settled life to urban civilization to industrial systems, all are about establishing one relatively independent “protective membrane” after another—in other words, about blowing a big bubble inside another big bubble. Although the industrial system relies on material resources, in terms of its value logic it also has the flavor of “making something out of nothing,” because most industrial products are not made to solve the needs of life in the agricultural era. New industrial products often find their own place within the industrial system, meeting the demands of upstream and downstream sectors. Industrial civilization continuously creates needs beyond mere food and clothing; that is why the Engel coefficient can reflect wealth, because wealthier modern people have more room to pursue things beyond food—entertainment, going online, and so on.
Of course, this “protective membrane” is breathable: materials and demands in the agricultural environment still influence the industrial system, and the operation of the industrial system in turn affects the agricultural environment and imposes demands on it. And the reason the industrial system develops and grows is not that it can merely consider the requirements of the agricultural era; rather, it must establish new production chains. What are called industrial chains and industrial ecosystems are, after all, nothing but the logic of circulation and reproduction.
The new bubble now being blown up, “the metaverse,” continues the trend of information technology toward “making something out of nothing.” In a time when contemporary people have already made online life a basic necessity, it further enlarges the space of “online life” and builds mechanisms of self-circulation and continual proliferation in cyberspace.
Blowing bubbles is no easy task. A good bubble requires the right time, place, and people; it requires skill and subtle force; it needs to keep expanding without rushing things; it requires grasping the proper moment to add content. So far, it seems Yuga Labs has handled the rhythm very well. Of course, even if this bubble they are blowing bursts, I believe more latecomers will still emerge, jointly building the protective membrane of the metaverse.
Translated from the Chinese original with AI assistance. The original text is authoritative.
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