Yuga Labs acquires PROOF & Moonbirds

In a bombshell development, Yuga Labs announced on February 16 that it had made the acquisition EVIDENCEto which the PROOF collective also belongs, Moonbirds, Odditiesand the Grails exhibition series.

The acquisition includes both the project IP and the PROOF team. “This was an all-stock deal from Yuga. I wouldn’t have supported it if I didn’t think it added value to both my baby and the PROOF/MB ecosystem,” said Greg Solano, co-founder of Yuga.

PROOF founder and CEO Kevin Rose will also come on board for a short handover period – and become an advisor to Yuga. In addition to the PROOF team, existing Yuga team members Josh Ong, Jesse Bryan and Amanda Gadbow will help bring PROOF into the Yuga ecosystem.

For Yuga, this acquisition is in line with their mission to become “the front door of Web3”.

“As a company committed to championing art, culture and community on the blockchain, we are excited to have PROOF join the Yuga ecosystem,” Daniel Alegre, CEO of Yuga Labs said in a statement.

Connections and conversations

The conversation between Yuga and PROOF has been in the making for months, CEO Daniel Alegre of Yuga Labs now tells nft in an interview.

“The second half of last year we talked about what was going to happen with Moonbirds. We knew Kevin from the industry and interpersonal relationships, and we had a conversation with him – he said, ‘look, we as PROOF are rethinking what we should do with Moonbirds, and to find a better home for them Alegre said. .

As Rose and Alegre chatted, the conversation broadened.

“We started thinking about their community; where we take Otherside. Moonbirds and Otherside fit together very, very well. Birds, avatars or islands on Otherside made perfect sense. And when we sat down with Kevin, we said, “What about Proof Collective?” We started talking about how important art is to us at Yuga, especially with our CryptoPunks community – how we bring art to museum style and art collectors. There was a very strong strategic meeting of the minds: “Wait, Proof Collective would also fit very, very well into what we do at Yuga,” Alegre explained.

After the initial dialogue, things moved quickly, with discussions continuing through November 2023 and through the holidays.

While Alegre couldn’t share the details of the deal, he could reveal that Yuga had purchased the company outright. For him, some of the most important benefits are the art of the Moonbirds and its potential for integration into Yuga’s gaming and metaverse endeavors.

“The art that was made for [Moonbirds,] I think it’s spectacular. And from an artistic perspective, there is a very strong alignment with how we look at art. That was a really strong takeaway from this involvement: we looked at some of the projects they’ve been working on, and you’d swear it was done by the Yuga team, it fits so well,” he said.

Integrating art – and community

Some of the immediate next steps will include integrating Moonbirds into Otherside, while also supporting interoperability with experiences like Dookey Dash. “It makes perfect sense that Moonbirds and their community are part of the evolution of Otherside. We are going to give them the focus and attention they deserve,” said Alegre.

Alegre and the Yuga team are aware that it will take dedication to integrate Moonbirds, alongside collections like Oddities and Grails, into their ecosystem. While still in the ideation phase, Yuga has plans to support all PROOF PFP communities.

Alegre is well aware that integrating PROOF is a major challenge, but he is confident that Yuga is up to the task.

“This company has grown very quickly, maybe a little quickly, compared to what a company with 120 employees can do,” Alegre told us. “What I’ve been focused on since I became CEO is: let’s really reduce the number of projects we’re working on, and then really stay focused on executing the community elements, and making sure that the atmosphere that brought them together comes first continues,” he said.

After a period in the last quarter of 2023 when several individuals and groups offered to acquire Moonbirds, their founder and CEO, Kevin Rose, is optimistic about the future.

“We are very excited to bring Moonbirds to Otherside. It is the perfect home and future for our collectors,” Rose said in a statement. “Having the PROOF Collective on board demonstrates Yuga’s commitment to digital visual arts, and our combined resources will allow us to innovate faster and reach more people. It will be an exciting journey,” he says.

PROOF’s bumpy road

The acquisition took place against the backdrop of controversy surrounding PROOF, which has had a bumpy ride since its launch in December 2021.

For this reason, Yuga Labs holder and ecosystem participant Adam Hollander expressed his anger at the acquisition.

“My first reaction: I fucking hate this. Ideal for Moonbirds holders who wanted an exit. There’s nothing wrong with them celebrating it. But Moonbirds has been one of the most poorly executed projects in the history of NFTs. They made almost $100 million and didn’t deliver on their promises. They would build a metaverse world and then cancel it. They guaranteed IP rights to the holders and then took them away without asking,” Hollander wrote on December 16.

Alegre accentuates the positive aspects when he thinks about PROOF.

“When I look at the PROOF collective, you can see that they are absolutely passionate about art and the art community. And we as well. So we’re going to continue to run PROOF collectively the way that they do, and we’re going to really think about what are the leverage points that we can bring in and how we can adapt their approach. It really comes down to the basics of making sure the community hears that, that they are supported, and that there is an ongoing engagement plan with the community,” he told us.

In light of the Yuga community’s recent community engagement efforts, including Otherside community demonstrations in LA, Berlin and at ApeFest, as well as the creation of the Gaming Council, Alegre has clear plans to tackle the often troublesome Moonbirds and integrate PROOF communities with Yuga’s legions of keepers.

“The first clear message for our existing Yuga communities is: we will continue to focus on supporting them, listening to and implementing the ambitions that we and the community have for the different PFPs. We will do the same with Moonbirds. We’ll transition from the community team on the PROOF side to our community team, and we’ll be listening and engaging with different community members – just to listen to them in the same way we do with all our holders across, 10KTF, Meebits, BAYC and CryptoPunks ,” he said.

For Alegre, the biggest challenge in integrating PROOF into Yuga will be merging the two communities.

“What invariably happens is that if you have two companies with very strong founder-led cultures, you need to focus on getting the two cultures to merge and perform well. Fortunately, in our very short lives we already have experience with takeovers. We acquired the Meebits and the CryptoPunks. Then we also purchased 10KTF – and those transitions went fairly smoothly, so I don’t suspect that will be a major problem. I think the most important thing is how do you meet the expectations of the communities, make sure we don’t miss anything and that we execute well? Ultimately, it’s all about execution and making sure we let the Moonbirds team, who really know their community very well, bring the best of their knowledge to the table, while at the same time bringing the scale and leverage of that to the table. Yuga Labs can bring,” he said.

Future acquisitions

With this latest announcement, Alegre believes Yuga has a clear strategy for potential future acquisitions.

“We are a creative and community-oriented company. And when we see other companies that get it, that really understand how to build communities, then that’s obviously interesting to us. Larva Labs clearly knew. 10KTF definitely knows how to do it, and PROOF has shown that they can actually build strong communities,” he said.

With a focus on community and a stated goal of being the front door of web3, Alegre thinks Yuga’s future strategy could include both remote collaborations and acquisitions.

“When we look at it, we’re being opportunistic – and we’re just looking at the question, ‘What are potential companies that have a very strong community ethos and very, very strong, connected communities?’ And then we find out if it would make sense to bring them under the Yuga umbrella, or if an arm’s-length partnership could work. “If we’re going to deliver on our mission of building culture on the blockchain, we really want to bring together great communities on the other side,” he said.