A pair of non-fungible token projects are testing the boundary between plagiarism and parody. Digital marketplace OpenSea has banned the PHAYC and Phunky Ape Yacht Club (or PAYC) collections, both of which are based on the same gimmick: selling NFTs with mirrored but otherwise identical versions of high-priced Bored Ape Yacht Club avatars. Now the dueling projects are selling their apes while dodging bans from other marketplaces, becoming the latest example of how the NFT world handles copied art.
Bored Ape Yacht Club (or BAYC) NFTs are some of the most expensive crypto art assets — they recently overtook CryptoPunks as the highest-priced NFT avatars with the cheapest available ape selling for $217,000. Like other avatars, though, anybody can technically copy or modify the associated ape picture. So PAYC and PHAYC simply flip the right-facing BAYC avatars to face left, associate them with cryptocurrency tokens, and resell them.
What’s an NFT?
NFTs allow you to buy and sell ownership of unique digital items and keep track of who owns them using the blockchain. NFT stands for “non-fungible token,” and it can technically contain anything digital, including drawings, animated GIFs, songs, or items in video games. An NFT can either be one of a kind, like a real-life painting, or one copy of many, like trading cards, but the blockchain keeps track of who has ownership of the file.
NFTs have been making headlines lately, some selling for millions of dollars, with high-profile memes like Nyan Cat and the “deal with it” sunglasses being put up for auction. There’s also a lot of discussion about the massive electricity use and environmental impacts of NFTs. If you (understandably) still have questions, you can read through our NFT FAQ.
PAYC announced its launch in early December with a loose mission statement promoting decentralization and denigrating “rich douchebags” who had (allegedly) taken over the original ape market. It called back to CryptoPhunks, a similar project that flipped and resold expensive CryptoPunks images earlier this year. Early arrivals could mint left-facing apes for free starting December 28th, while others paid a fee of .042 ETH (currently around $157).
PHAYC launched shortly after with a tongue-in-cheek website describing the project as “a limited NFT collection where the token itself offers no membership and no allegiance,” an inversion of the promise made by BAYC creator Yuga Labs. One PHAYC community member described the project to CoinDesk as “a satirical take on the current state of NFTs and members of the NFT community who might be taking the NFT market a little too seriously.”
Somewhat ironically, PAYC and PHAYC have since fought on Twitter over which one is the authentic Bored Ape Yacht Club ripoff, with PAYC’s founder referring to PHAYC as a “cash grab fraud project.” PHAYC charged people to mint its apes, and CoinDesk reports that it took in around 500 ETH (or around $1.8 million) in sales. By contrast, it says PAYC earned around 60 ETH (or roughly $225,000) from its paid sales.
Both projects may be in legally dicey territory. It’s common for NFT lineups to copy each other’s art styles or use similar names. But Yuga Labs owns the copyright on its ape images, and PAYC and PHAYC were booted from OpenSea apparently for violating its rules against copyright infringement. (PAYC was also removed from competing markets Rarible and Mintable, although PHAYC is still listed on Rarible.) If Yuga Labs files a formal legal complaint, PAYC and PHAYC could potentially defend their apes as transformative fair use, following the footsteps of people like appropriation artist Richard Prince. But there’s very little legal precedent surrounding NFTs at all, let alone their copyright implications specifically.
Yuga Labs didn’t immediately respond to a request for comment on whether it might file such a complaint, and PHAYC didn’t respond to a Twitter message about the issue. PAYC told The Verge on Twitter that it hasn’t received any legal threats from the BAYC team.
So far, both projects appear more concerned with trying to make their apes tradeable online. NFTs are theoretically supposed to live outside any given platform, but markets like OpenSea have become huge bottlenecks by simplifying the selling process. While the sites have hosted plenty of NFT projects based on stolen art, they’ve delisted copycats like CryptoPhunks in response to complaints from companies like CryptoPunks creator Larva Labs, and they’ve banned some individual NFTs that were stolen from their owners. Both PAYC and PHAYC have tweeted that they’re working on alternative marketplaces that can sell the leftward-facing apes — although, by the time you read this, someone else might have started selling an even faker fake ape.