When the ApeCoin DAO community started thinking about building a specialized marketplace for Bored Ape Yacht Club NFTs in the summer of 2018, big marketplace firms like Magic Eden and Rarible made offers to build feature-rich platforms for no upfront cost.
But when APE token holders voted, neither of these well-funded venture capital-backed businesses won the approval of the community. Instead, 88% of token holders backed Snag Solutions, a two-person company started this summer by two people who used to work at DoorDash.
“It was a really interesting process,” Snag Solutions CEO and co-founder Zach Heerwagen said to Decrypt about convincing ApeCoin DAO voters. “We were small enough and nimble enough to adjust our entire business approach to win.”
Today, the company’s official ApeCoin NFT marketplace went live. This lets people trade popular Yuga Labs collections like the Bored Ape Yacht Club, Mutant Ape Yacht Club, and Otherside metaverse game. But why would people who own ApeCoin, a cryptocurrency token based on Ethereum that was made for the Bored Ape ecosystem, need their own specialized market?
First, it has much lower fees than a big NFT market like OpenSea, which has a standard fee of 2.5%. ApeCoin’s platform charges a small platform fee of 0.25 percent for APE listings and 0.5 percent for ETH listings. In both cases, 0.25 percent is sent back to the ApeCoin DAO’s bank account. For ETH-listed transactions, Snag Solutions gets a fee of 0.25 percent.
If the Bored Ape ecosystem is more integrated than most NFT marketplaces, this could lead to more potential benefits. The ApeCoin marketplace will show information about ApeCoin staking for all listed NFTs and highlight all of Yuga’s projects that have NFTs with the same number. It will also show if a Bored Ape used a Serum NFT to turn into a Mutant Ape NFT.
Some of the previous sentences may be incomprehensible to the average reader. The marketplace’s audience is made up of ApeCoin fans who care about the future of the Bored Ape ecosystem and own NFTs. In addition to the reduced costs and DAO treasury payments, they may appreciate all of this nuance and supporting information.
GoblinTown, Genuine Undead, and Crypto Chicks are just a few of the niche markets for NFT projects that Snag Solutions has made in its short time in business.
So that the community would support the development of the marketplace, the startup company, which had only two full-time employees (Heerwagen and co-founder and CTO Jason Jong), had to go up against two big competitors. At the time, Magic Eden was just starting out on the Ethereum market, so it worked hard to get the market established.
Heerwagen had already said that the victory was the result of brilliant pivots. The first proposal from Snag Solutions didn’t work out. At first, the company asked for a down payment of $50,000 and higher fees overall. The community was still not impressed, so the Snag Solutions team quickly changed its plan based on what Magic Eden and Rarible said.
Heerwagen said, “As with any business venture, their ideas were better than ours.”
So, the two of them changed the way things were. Snag Solutions stopped requiring an upfront payment and lowered its prices, but it also did something else: it pointed out some of the biggest problems with Magic Eden and helped build a story about the Solana-centered company.
In just nine months, the company was worth $1.6 billion and controlled the Solana market, which earlier this year was also worth $1.6 billion. Magic People have said that Eden’s custodial marketplace model puts users’ non-fungible tokens (NFTs) at risk and that its closed-source technology is not Web3-like. Snag Solutions made money off of this mistaken belief.
Heerwagen remembers that the idea for Magic Eden came from a market leader and had a lot of features. “And so we pivoted our entire kind of smart contract stack to be entirely on-chain and open-source so that we could lean into the narrative that Magic Eden is fairly centralized and doesn’t play well by Web3 values.”
In the end, only 40% of people agreed with Magic Eden’s plan, which was up for a vote the same week in September. Rarible’s proposal got stuck and wasn’t voted on until last month, long after Snag Solution’s proposal was approved. Only 14% of votes were for an ApeCoin marketplace for Rarible.
Heerwagen says that the use of arrests related to Magic Eden was not only shocking. ApeCoin holders liked how Snag Solutions put a lot of emphasis on decentralization, interoperability, and methods that don’t extract value.
He said, “I was candidly floored by how well the community resonated with that.”
As a result of good communication, ApeCoin DAO now has its own NFT marketplace. Even so, the crypto winter has only gotten worse, with prices for Bored Ape NFT falling and ApeCoin hitting an all-time low this month after FTX died. It’s harder for traders to make money in this market, but Snag Solutions wants to keep the Ape craze going.
Heerwagen said, “We’re relying on [Yuga Labs] and on ourselves as a community, which is the cool part, to continue to add value to the tokens and ecosystem here.”
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