The Drop Founder Gannon Breslin joins Yahoo Finance Live to discuss Instagram’s NFT plans and the Bored Ape Yacht Club airdrop fiasco that allowed one user to claim $1.1 million worth of ApeCoin tokens.
BRIAN CHEUNG: Well, by now, you’ve probably seen them, right? Those Bored Apes, those NFTs, those nonfungible tokens. Well, they’re still fetching a pretty penny among traders. And last week, the creators of the Bored Ape Yacht Club airdropped Ape Coin– it’s a separate token– to HODLers of those digital apes themselves. The only problem? Some were able to game that airdrop, apparently. There’s a lot of moving parts here.
So let’s bring in Gannon Breslin, founder of The Drop, who has been closely following the space and is our resident expert, if you will, on NFTs. Gannon, it’s great to have you on the program. Walk us through exactly what happened here. There was a person that was able to game over a million dollars in terms of some of this Ape Coin token. How did that happen? Is that bad for the NFT space?
GANNON BRESLIN: Thank you, Brian, for having me on. Bear with me here because there’s a lot of moving parts to this story. But essentially, someone owned multiple Bored Apes. And there’s a way that you can tokenize a group or an individual Bored Ape through these platforms. And you can essentially lend them out or create what’s called a vault in which you can stake the group or the set or the individual Bored Ape.
And what happened was someone had this vault, staked another person, then flash loaned money, bought that lot, that vault, to immediately take the ape coin reward. And that person who was lending out their apes did not receive the Airdrop of what would have been over a million dollars.
Now I kind of have an opinion on this. My opinion is, if you’re going to lend out your apes, if you’re going to create a vault, that’s on you. You should have known that this Airdrop that was widespread known on Discord, on Twitter, on everything, to take your ape out of that vault and claim it yourself. So it’s a sad situation, but operator error, in my opinion.
BRIAN CHEUNG: Well, that’s an interesting take because I feel like people who have heard about this story said, well, maybe the Airdroppers of the Ape Coin, again, the founders of the Bored Ape Yacht Club themselves, should have created some sort of mechanism that would have prevented people that were lending out to get extra tokens here. But you’re saying, look, the people that put their NFTs into those vaults, they are the ones that are holding liability here.
GANNON BRESLIN: I mean, odds are if you own a Bored Ape Yacht Club, you’re really well tuned into the space. I mean, these are going for $300,000. The lowest price right now is close to $300,000. So you have to be totally up to speed on what Yuga Labs’ Bored Ape Yacht Club is doing.
And I know it sounds really callous, but I just don’t really feel bad for someone who, I guess, didn’t read the news or wasn’t following with their investment. And they were doing something risky themselves, which is creating a vault, having this whole thing tokenized to try to get rewards. When you play with fire, you’re going to get burnt eventually. And I know that sounds kind of mean, but that’s what happened.
BRIAN CHEUNG: Yeah, well, I mean, I guess good for the one person that managed to lend out those five Board Apes. Worth mentioning that Yuga Labs– again, the creator, founder of the Bored Ape Yacht Club– we did reach out to them for comment. They did not respond. But we’ll leave that story there for right now.
And Gannon, I want to pivot to another big story in the NFT space, which happened last week at South by Southwest. Meta’s Mark Zuckerberg teasing that NFTs could be coming to the Instagram platform soon. First of all, they’re kind of behind the ball on this, right? Because there are already NFTs and avatars on Twitter. First of all, how could you see Facebook and Meta and the Metaverse incorporating NFTs? And do you think that they’ll be successful?
GANNON BRESLIN: Definitely, yeah, they are a little bit behind the ball. You know, Twitter came out with probably over a month ago now that you can have your profile picture be an NFT from your MetaMask or your other wallet, your OpenSea wallet. And it can show on the blockchain exactly that you own it, verified, and the whole nine yards.
Now what Instagram, in my opinion, should do, they should go a step beyond. Not just, hey, your profile picture on Instagram can have your favorite NFT, but it should be a marketplace. They should have at the bottom, when you have the Explore page, we see that on Instagram you can actually buy things, obviously. They have the money. They can do it.
Everyone– there’s basically an arms race for NFT marketplaces, as we all know. So I think they should go a step further. And I think they have the capability to do that. And Mark Zuckerberg definitely shows the interest in wanting to create this Metaverse. And this is the step in the right direction, in my opinion.
BRIAN CHEUNG: So when we talk about Meta doing this, again, because I mean, Twitter, you got that hexagon. You have the hexagon. That’s probably the end of that story there. But it just feels like there’s kind of a grandeur that comes with Meta trying to make that first step on the Instagram platform because at some point, maybe they want to incorporate Instagram into that Metaverse. We don’t know what the grand plan is there. So how significant is that? Are there other applicable ways that you could see the Metaverse wanting to use NFTs that would be beyond just the picture I took at the beach, the NFT of that?
GANNON BRESLIN: Right. Yeah, well, we also can’t forget about Oculus, right? And that’s something that Mark Zuckerberg has been really paying attention to. And I think it’s going to be a three-part system. You’re going to see NFTs on Facebook. You’re going to see NFTs on the Oculus. You’re going to see it on Instagram. And somehow they’re going to be connected. I don’t– obviously, no one really knows how it’s going to play out.
But if you’ve used the Oculus, you know how many things that can be integrated, and I think it would be really cool, for instance, if you’re on Instagram, on the marketplace that they create, or however they go about it, you purchase something through Instagram, and then you could see it show up on your Oculus, whether it be an attachment or your avatar, something along those lines.
BRIAN CHEUNG: Yeah, I mean, the only thing I got from the Oculus was a little sick, but maybe we’ll see if that experience gets a little bit more smoothly as they continue to develop that technology.
GANNON BRESLIN: Definitely.
BRIAN CHEUNG: But Gannon Breslin, founder of The Drop, thanks again for breaking all that down for us. We’ll have you on next time, the NFTs on that.
GANNON BRESLIN: Thank you so much, Brian. Thank you.