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Darrel Lideros started investing in non-fungible tokens (NFTs) in January. He has a checklist that he swears by before he makes any investment decision: Number one, “It has to be hype,” he says. Number two, “community”—the investors have to be helpful to each other. Number three, “utility”—what does he get out of putting his money into it? Number four, “price.” And lastly, the NFT needs to have a “documented team”—the people behind it can’t be “ghosts on the internet.” He needs to be able to find them on LinkedIn.
Although Lideros has invested in cryptocurrency since 2018, he’s no metaverse millionaire like Gary Vee. He’s a 28-year-old Daly City resident who wears Air Jordans, loves hip-hop and works for a loan company. In other words, he’s exactly the kind of investor Jamal Trulove is aiming to attract for his NFT project, The Bay Apes: young, for the culture and willing to take a risk with their money.
I first met Trulove in San Francisco Chinatown on a chilly evening at the beginning of February. He wore a durag, a mint green sweatsuit and Yeezy slides. I had known the man for all of five minutes before he started pitching me on The Bay Apes.
In person, Trulove is like that one cousin we all have who’s always telling you about their next big idea at Thanksgiving even though you don’t really know what they do for a living. Trulove himself does many things: he’s a rapper, an actor, a community activist, an entrepreneur, a Baydestrian through and through. Guys like him might have their heads in the clouds a bit, but if anyone has the charisma to make those big ideas happen, it’s them.
And Trulove is in a unique position to do so. In 2019, he received a $13.1 million payout after San Francisco police framed him in a murder case and he was falsely imprisoned for six years. Since then, he’s invested pieces of his settlement in various creative projects.
As we stood on the sidewalk in Chinatown, countless cars whizzed by and people passed, but Trulove was locked in, talking for 15 minutes straight about his idea to open a members-only nightclub in the Bay Area that caters to “hip-hop culture nightlife,” which Trulove sees as a dying breed in this ever-changing city. In Trulove’s vision, membership is linked to ownership of a Bay Apes NFT.
Trulove, who is Black and was born and raised in San Francisco, says he wants “to be able to go out and party with people I recognize, and with dances I recognize, music I recognize and vibe and energy.”
Trulove was close to making that dream a reality once before. During our interview, we stand across the street from a building with wood nailed over its windows. It’s the property where Trulove was supposed to open a nightclub called LUV SF with his Bay Apes business partner, Bennett Montoya, who previously owned Hue Lounge and Nightclub in North Beach. That was back in March 2020 before—well, I think we all know what happened next.
Though LUV SF never came to fruition, The Bay Apes project is on its way. The NFT collection dropped on April 20 after months of marketing to drum up hype. And it worked: At least 55 people have already purchased 117 Bay Apes valued at a total of about $170,000 at the time of publication. But they’ve bought into a venture that still has many unknowns. For starters, Trulove hasn’t secured the venue for his new nightclub—access to which is one of the collection’s main draws. Not to mention the few government protections for cryptocurrency investors, and the possibility that the hype around NFTs will wear off.
Still, Trulove is confident he can build something great for Bay Area hip-hop culture with The Bay Apes, and he’s cultivated a group of investors who are drawn to the project’s promises of networking, financial opportunity and fun.
“It’s like damn near a whole community,” says Lideros. “You’re setting yourself up with like-minded people, not just your average guy off the street at that point. Everybody has connections and something to offer.”
Now, a lot of folks have had the letters “N-F-T” on their lips lately, but how they actually work can still be hard to grasp. So, as a primer, NFTs are basically pieces of digital art that can be sold through online marketplaces, such as OpenSea and Nifty Gateway, and bought with cryptocurrency, like Ether or Bitcoin. A record of the purchase lives on a permanent ledger called the blockchain (Ether is the cryptocurrency that runs on the Ethereum blockchain). NFT collections, like The Bay Apes, are a group of NFTs that all have a base design template and are produced at a finite number, like trading cards.
But perhaps the more pertinent questions are: Why are celebrities obsessed with NFTs, and why have some sold for millions of dollars? In short, it’s for the same reason wealthy people pay obscene amounts of money for traditional art. Each NFT (even if it’s part of a collection) is a one-of-a-kind work whose value increases as hype builds—not to mention that they’re status symbols signifying that you’re hip to digital culture.
Trulove wants to use the excitement around NFTs “to not only fundraise, but also as a way to get people in,” he explains. “A way of investing into something—being a part of something—that has a value, ultimately, in this community.”
He may be on to something. Experts forecast that the concert industry will soon embrace NFTs. (Gucci Mane and Lupe Fiasco both have shows in June where an NFT will get you through the door.) Trulove and his nine-person team—made up of Discord specialists, a coder, a merchandiser, a project manager, a media coordinator, an “NFT Oracle” and an artist—want to take this idea one step further by offering perks, many of which sound straight out of a hip-hop music video, at Trulove’s future nightclub.
Trulove is selling 2,222 unique Bay Apes NFTs depicting headshots of humanoid primates with varying hairstyles, outfits and expressions, with backgrounds of Bay Area landmarks like the Golden Gate Bridge and the Painted Ladies. (Yes, The Bay Apes collection is stylistically similar to the extremely popular Bored Ape Yacht Club NFT series, but Trulove claims the ape idea is derived from the word’s slang meaning. As in, “I’m aping out” or “going apeshit.”)
Each NFT costs 0.5 Ether (the second most popular cryptocurrency behind Bitcoin), or a little over $1,400, at the time of writing. But why would any Bay Area resident spend hard-earned cash that could go towards rent on a digital drawing of a primate?
Trulove promises that those with a “male ape” in their digital wallets will be entitled to bottle service twice a month at his nightclub, while “female ape” owners can expect an open bar all night for themselves and three friends twice a month. (The genders of the apes only refer to the characters—anyone can own any Bay Ape regardless of how they identify.) But being a holder of either version of the NFT does not guarantee access to the club at all times. Trulove says this would be unsustainable; instead, Bay Apes owners simply gain the right to book a spot at the club on a specific night on a first-come, first-served basis.
The hyper-exclusive dynamic of the club is meant to create a source of passive income for Bay Apes owners. Trulove says those who are able to secure a booking will have the opportunity to resell their reservation, and the perks it comes with, online to the highest bidder while still retaining ownership of their NFT. This is similar to how NBA season ticket holders can resell their seats on Ticketmaster if they don’t go to a particular game.
Trulove and Montoya claim that this is the first small business model ever applied to the nightclub industry that utilizes NFTs as a mark of membership. Unlike many other NFT collections on the market, whose value is primarily determined by its desirability as a collector’s item and the community created among said collectors, The Bay Apes is selling investors on something they see as lacking on the NFT market: tangible utility linked to a physical space.
“After about eight months of really just learning and understanding the market and what makes an NFT valuable, I came up with real-life perks,” says Trulove. “That’s what the common person will understand. Why will they buy an NFT? If they could get real-life perks.”
The Bay Apes project isn’t without a laundry list of hurdles, though. Chief among them is potential buyers’ anxieties about where their money is going. As Kamantai Fungula, a 29-year-old Oakland native interested in buying a Bay Ape, succinctly puts it: “My biggest concern is buying an NFT that ain’t worth shit.”
Being fleeced in the NFT market is such a common occurrence, in fact, that situations where the originator of an NFT collection disappears into thin air has a name: It’s known as being “rug-pulled.” In October, for example, investors in an NFT project that was supposed to produce a video game with the money earned through its mint, called “Evolved Apes” (it also sold simian avatars), were hoodwinked to the tune of $2.7 million.
Trulove says he’s aware of concerns about his project’s authenticity and that he empathizes with those who hold them. The first time he bought an NFT—which he thought was a legitimate Bored Ape—it was a rug pull. He points to The Bay Apes team’s transparency as a way of earning potential investors’ trust.
“In any project, you want to do your education on who the founders are, who’s pushing the project, who’s the developer. And if you look on our site, you see everybody that’s involved, the whole team,” Trulove says. “And all their Instagrams are right there, all of their social medias are right there, you can get directly at them. So we’re doing everything by the book for what we know, ultimately, because NFTs and crypto are always developing.”
But how can you do something “by the book” when there are no rules? Currently, there are no federal government regulations on NFTs in the United States, meaning strong consumer protections in this online space, if they come, are further down the road.
It’s the wild, wild, web out there, and it can be hard to separate the bandits from the honest lawmen on this new frontier. But as far as Sanjay Singh, 24, is concerned, The Bay Apes Team being accessible and available is sufficient to quell any fear of a rug pull.
“If it’s a legitimate group, you can actually message the people that are selling those NFTs and talk to them,” says Singh, who is a member of The Bay Apes whitelist (early adopters to the NFT who got the opportunity to buy it at a discounted price of 0.3 Ether). “I’ve texted them, talked to them personally, before I even bought the NFT and asked them all kinds of questions because they know everything about each and every one of their NFTs… they can tell you the whole background of the entity and what it has, what it offers.”
Just like those who journeyed out to Northern California in 1849 to speculate on the Gold Rush, folks who are looking to invest in the NFT market must also be willing to take a risk on a boom-or-bust industry. Some economic experts have speculated that the entire NFT market is a bubble that is set to pop, similar to the subprime mortgage collapse of the mid 2000s that was built on a system that exploited the economically vulnerable.
However, Trulove sees the NFT market as one that’s here to stay. “If Ethereum’s not going anywhere, we’re not going anywhere either,” he says. “We’re just gonna keep on progressing and leveling up, and that smart contract will forever live on the Ethereum blockchain. And as long as we’re doing what we’re supposed to do with the NFTs and we build a value to it, it’s something that you could hold on to forever.”
But getting the average person to understand the intricacies of an online market that isn’t grounded in something tangible, like real estate or merchandise, is no easy feat. Nor is trying to convince people who live in a place as expensive as Northern California to drop over a thousand dollars on something without an instant return on investment.
I could tell Trulove was frustrated by this reality in late March, when I spoke to him on the phone as he drove to an NFT convention in Los Angeles. He admits that getting people to buy into The Bay Apes has been “an uphill battle, to a degree.” He says he’s encountered resistance when pitching his idea in tech spaces where there are few people who look like him and share his background. He also says he’s had trouble getting commitment from investors: The market value of Ether dipping at the tail end of February is a big reason why the public mint date of The Bay Apes was pushed back from Feb. 22 to the stoner’s holiday, 4/20.
“I’d be lying if I said I didn’t feel a lot of pressure because I created this deadline and I’m trying to convince this community of people to agree on one thing, and convert people who have never had an NFT or crypto,” Trulove says.
Getting buy-in aside, there’s another major issue hanging over The Bay Apes team’s heads: They haven’t yet secured a space to house their nightclub, though they have teased the possibility of opening the club on the water in a yacht that would cruise around the Bay. In fairness, Trulove has been honest about this conundrum to potential investors. In the meantime, he has plans to do takeovers of other clubs where NFT holders will enjoy their perks and interact with “Elite Apes,” the Bay Area entertainment industry heavyweights who’ve cosigned the project.
There’s also the small issue of whether The Bay Apes will flip a profit when all is said and done. Running a club in the Bay Area is already a costly, high-risk endeavor even when it isn’t financed by something as slippery and untested as an NFT investment model. Not to mention The Bay Apes club will be giving out free drinks left and right to NFT holders.
But Montoya claims “the nightclub can sustain the lease and be profitable.”
“We are always looking to give our members something, so we’re not really looking at it as like, ‘Oh, we’re gonna make money off you guys.’ We’re looking at it as a network,” Montoya says.
The Bay Apes team will command a 15% royalty payment anytime one of their tokens is sold on OpenSea from one owner to another. They say this is where the real money is in NFTs, not in the crowd-funding stage The Bay Apes project is currently in. For this reason, Trulove and his crew are betting on both Ether and The Bay Apes NFT collection trending upwards in value to make back the money they’ve spent, and will continue to spend, as the club nears opening time. Trulove says that’s still eight to 10 months away.
Despite all these challenges and uncertainties, Trulove’s vision has legs. Perhaps a contributing factor is The Bay Apes’ local focus. Among the Elite Apes are Nef the Pharaoh, Stunnaman02 and Gunna Goes Global, who have all changed their Instagram profile picture to a Bay Ape in their likeness to promote the project.
Karim Mayfield, a San Francisco native, cannabis dispensary owner and retired professional boxer, is one of the high-profile people chosen to be an Elite Ape. Mayfield says he’s into the project because “it’s a good look when you tell somebody, ‘Hey, table’s on me!’ They be thinking you spent a bag!” He continued: “And again, it’s a community of people, so I’m always into communal activities.”
The Bay Apes team promises that their NFT will bring investors an opportunity to network with an “exclusive group getting hyphy on the Ethereum blockchain,” according to their website.
The first of these networking opportunities came on Feb. 3 at Sunset Squares Pizza (co-owned by Bay Apes investor David Lee). Potential Bay Apes buyers were invited to enjoy an open bar and free pizza while learning more about the project.
The Bay Apes team spared no expense on the mixer event (unsurprising, considering Trulove told me that he’s spent about $110,000 on marketing and paying developers). The amenities—including a golden party bus called “The Twerkulator” where attendees could vape aboard—attracted over 100 people, most of whom were people of color who looked to be under the age of 40. Some of them were dressed up—wearing knee-high boots or blazers—while others were more casual, wearing jeans and Giants caps. Almost everyone was networking while a DJ spun tracks by Cam’ron, Kanye West, Jay-Z and Beanie Sigel.
Moses Baca, a 38-year-old mixed martial artist who also works in private security, says he was “impressed” by the atmosphere on the night. “Seeing people mix it up like this, this is how it should be done. I’ve seen other guys with their NFT projects and I’m like, ‘This is what you guys should be doing,’” he says.
From what I gleaned from talking to people, the room was made up of a fair mix of NFT veterans and rookies, of people who were already sold on The Bay Apes idea and those who were more skeptical, and of attendees who had come to the mixer on their own accord versus those who were dragged along by a loved one. Throughout the night, I could see the beginnings of a community, something Trulove feels is of the utmost importance to the success of this project.
Lideros, who I met at the mixer, says that even before The Bay Apes NFT minted, he already encountered a helpful community among the nearly 2,500 people who joined the project’s Discord server.
“A lot of people are new, you know, this is gonna be their first NFT they’ve ever minted,” says Lideros. “A lot of the other people are experienced, so, I mean, if you walk in there and don’t know anything, there’s gonna be like four to five people that are willing to help you right off the bat.”
One of those NFT first-timers is Fungula, who says he’s interested in The Bay Apes because he is “a big fan of a bunch of the rappers that they minted as Apes,” such as Capolow. “Once they posted it, I just went more in depth myself into the Bay Apes and did my own research and I was blown away by all the Apes that they got,” Fungula says.
Fungula has already started spreading the gospel of The Bay Apes. “I was so excited, I just started sending the link to the [mixer] tickets to all my family,” says Fungula, who brought six people with him to the event. “I damn near was saying this is gonna change our lives.”
Clearly, the project has some hype surrounding it. Perhaps it’s the proximity to celebrity, the proposed perks or the eye-watering numbers we’ve seen NFTs sell for recently. But, Fungula says, a big contributing factor to his interest in The Bay Apes is its local focus, which makes it a more approachable investment in his eyes.
“A lot of the other [NFTs] seem more far-fetched to get out there,” Fungula says. “They don’t seem like something that I can understand–like The Bay Apes, which just feels like something I can understand, because I’m a Bay Ape.”
A few months later, on 4/20, Trulove and his team showed up to Hippie Hill to celebrate The Bay Apes mint date. When Stunnaman02 took the stage to perform “Big Steppin’,” he asked the crowd: “Does anyone know what an NFT is?” This prompted some cheers (and a good amount of boos) before the rapper shouted out Trulove and encouraged fans to follow The Bay Apes’ social media.
It remains to be seen which response from the crowd to that question will be more apt. Trulove and his Bay Apes team are taking a risk by promising so much when so little is certain. It’s an ambitious venture—and only time will tell if they can manage to pull it off.