When it comes to NFTs, nothing is as punk as CryptoPunk ownership. CryptoPunks is a status symbol, a piece of Internet history, and an unfathomably valuable item. It may be the most significant NFT project.
The CryptoPunks‘ path to non-fungible fame is entwined with the development of the Ethereum blockchain. And the rise of multibillion-dollar ventures such as Bored Ape Yacht Club may be clearly linked back to the CryptoPunk template. If you’re contemplating purchasing a CryptoPunk, or if you’re wondering what the heck these bizarre images are and why they cost millions of dollars, we chatted with notable NFT investor GMoney to find out more.
From these discussions, we’ve compiled the definitive guide on CryptoPunks. Therefore, let’s examine one of the most costly NFT collections money can purchase.
What Are CryptoPunks?
CryptoPunks is one of the earliest NFT collections on the Ethereum blockchain, having been launched by Larva Labs in June of 2017 and bought by Yuga Labs in 2022. It is comprised of 10,000 distinct 2424 pixel photos depicting primarily humans (male and female). However, there are a number of additional distinct varieties that are more valuable due to their scarcity. Included among them are zombies (88), apes (24), and aliens (9).
Each CryptoPunk can also display a mix of 87 distinct characteristics. This includes items such as caps, pipes, necklaces, earrings, eyepatches, and more.
Seven is the maximum amount of qualities a CryptoPunk may possess. However, there is only one CryptoPunk with seven features in existence: #Punk 8348. The creature features a cigarette, earring, mole, buck teeth, vintage sunglasses, a top hat, and a large beard. Zero characteristics are also possible for CryptoPunks, but the majority have two or three. In the figure below, you can see how the number of features affects both the value and scarcity of a CryptoPunk NFT.
Who Created CryptoPunks?
Unlike the initiatives it inspired more recently, CryptoPunks did not initially intend to establish a community. In reality, the team lacked even a plan of action. Matt Hall and John Watkinson, Canadian software developers and founders of Larva Labs, devised the idea as an experiment.
At the time, the NFT market was not nearly as robust as it is now. As a result, CryptoPunks began slowly at first. The collection became available in June 2017. Initially, the NFTs were distributed without charge to anyone who desired them. Due to the requirement of an Ethereum wallet to obtain one, the supply was restricted to crypto investors. GMoney adds that CryptoPunks’ significance stems from the fact that a community built around them spontaneously. They have a provenance since they are one of the original NFT initiatives on Ethereum, and they were initially free to claim.
GMoney asserts that early supporters of CryptoPunks, including current top-tier NFT influencers Pranksy, DaveDave, and SeedPhrase, “realized sooner than most that digital ownership would be increasingly distributed on-chain. The ability to own and claim anything on-chain would be extremely useful.”
Since 2017, CryptoPunks has evolved from a simple online craze to one of the largest and most well-known NFT initiatives in the world. Despite the fact that it was not officially the first NFT project on Ethereum, it was one of the early and most important. Many of those who were patient enough to hold have become multimillionaires, and those who were fortunate enough to buy in before the 2021 mania are considered among the luckiest in the NFT industry.
How To Buy A CryptoPunk NFT
Those unfamiliar with the NFT environment will encounter CryptoPunks sooner rather than later. When they do, they will soon realize that punks are a very valuable asset.
Let’s place the pricing in context:
Alien Punk #3100 fetched 8 ETH on July 6, 2017. This was around $2,000 at the time. This would have sounded like a ridiculous sum to pay for a JPEG back then. In March of 2021, almost four years later, the identical Punk was sold for a whopping 4,200 ETH. That is equivalent to $7,58 million.
Even though we’re discussing one of the greatest Punk sales yet, such purchases were not uncommon during the CryptoPunk bull run of 2021. Over the course of the year, the price of Punks moved from as low as 7 ETH to an incredible explosion in the fall. During this period, even the lowest accessible Punks cost approximately 100 ETH. Recent sales of Punks are priced similarly, between 60 and 100 ETH apiece. The rarest CryptoPunks may be purchased for up to 150 ETH, although prices have stabilized.
Additionally, auction houses have begun selling Punks. Therefore, if you keep an eye out, you can purchase one during special promotion. By introducing individuals in more traditional art settings to Punks, Christie’s is largely responsible for the growth of the Punk marketplace. In May, as a follow-up to its $69 million Beeple sales in March, Christie’s auctioned off a collection of nine CryptoPunks for a staggering $16.9 million.
Why Is CryptoPunks So Valuable And Expensive?
Over time, CryptoPunks has become a status symbol and an investment. In fact, GMoney claims he acquired CryptoPunk because he desired the associated prestige. “By using an NFT as my avatar on Twitter and Discord, I can instantly “flex” with an image…. Digitally, it has the same impression as wearing that Rolex in person,” he remarked.
In the NFT community, CryptoPunk owners are often viewed as builders and visionaries. Incorrectly or not, they are considered those who anticipated the future of NFTs and entered the market early. Consequently, they are accorded a presumption of trust and position. Several collectors have built whole personalities, groups, and companies around a single CryptoPunk NFT.
In addition, knowing their history and how they have evolved alongside the Ethereum blockchain since its inception, some believe that holding a Punk is akin to putting a wager on the significance of NFTs and the Ethereum network. The majority of early Punks supporters did not stumble into the project by coincidence. According to GMoney, “you had to be an early adopter of crypto to be engaged with CryptoPunks.”
In conclusion, the project is so highly regarded because of its historical relevance and the manner it shows a conviction in Ethereum.
Celebrities, venture capitalists, and even hedge funds have joined the CryptoPunks race in droves, regardless of the ratio of social to financial value. Moreover, it is difficult to reject a project that converted collectors into billionaires almost immediately. In this regard, the collection’s continued value is due in part to the accomplishments of its first collectors. Everyone hopes for a repeat performance.
CryptoPunk Controversies
Punks may be one of the greatest NFT projects of all time, but the group behind it is not immune to criticism. In February 2022, Larva Labs encountered opposition when one of its co-founders, John Watkinson, liquidated his V1 CryptoPunks NFTs stock. Larva Labs sought to ban the nascent project and get it removed from NFT markets just days after selling the V1 Punks. This accusation had the potential to cause the price of V1 Punks to collapse, resulting in a monetary loss for everyone who purchased NFTs from Watkinson.
Watkinson, on the other hand, pocketed all the proceeds from his sales and had no losses from the price decline, which was triggered by a firm he and one other person controlled.
The community was divided on whether or not what Larva Labs did was in fact improper. Some claimed that the organization was not deserving of criticism because the team had explicitly declared that they disapproved of the idea and wanted to sell it. Others criticized the firm since the team just rejected the idea and said they were selling two days after the cofounder had already sold…which is not straightforward.
And it was not the only time the NFT community criticized the firm. Larva Labs was also criticized for supposedly assaulting legitimate initiatives that aren’t actually attempting to defraud people and for failing to define what Intellectual Property (IP) rights customers had in respect to the CryptoPunk NFT they hold.
CryptoPunks acquisition by Yuga Labs
Yuga Labs, the creator of Bored Ape Yacht Club, bought both CryptoPunks and Meebits in March 2022. With this acquisition, Yuga Labs intends to cultivate a “community of builders” that creates derivative works based on the two projects. As they did with their own BAYC collection, Yuga Labs will transfer IP, commercial, and exclusive license rights to the individual NFT holders to achieve this goal. This would allow CryptoPunks and Meebits owners to produce artwork and merchandise based on their NFTs, the same as how BAYC owners have been able to do.
This transaction effectively resolved one of the key problems, as customers were fully informed of their rights in connection to their CryptoPunk NFT. The developers of CryptoPunk stated in a statement that they approved the acquisition because they believed Yuga Labs would be a better custodian of their initiatives. “Yuga Labs are the finest caretakers of CryptoPunks and Meebits in the world. We are convinced that they will continue to be crucial, successful initiatives in the growing decentralised web in their hands,” they concluded.
Given the opposition, they suffered while they owned CryptoPunks, Hall, and Watkinson could be accurate.
Yuga Labs also received 423 CryptoPunks and 1711 Meebits as part of the purchase. When asked what they intend to do with them, Yuga Labs responded, “We’re not in a hurry to do anything other than give people their intellectual property, see what they do, and listen.”
The Future Of CryptoPunks
CryptoPunks, which is only a few years old, is already a legacy project in the NFT field. GMoney notes that despite the rapid expansion of the NFT market, Punks will not get lost or forgotten. Why? Because they are the origin of everything. “CryptoPunks will remain a significant component of the NFT community. “They do not need to evolve, and nothing must occur for them to solidify their place in history,” he stated.
Nonetheless, with a new owner, Punks is expected to experience modifications. Yuga Labs now receives a commission if a Bored Ape is resold. Larva Labs did not use this approach with CryptoPunks and Meebits. Yuga Labs maintains they have no plans to modify this, but they have not provided any information on what they intend to do with the collection.
As the world awaits to see what Yuga Labs will do with CryptoPunks, values continue to bounce drastically. In October of 2021, CryptoPunk #273 was acquired for around $1.03 million. Six months later, in May of 2022, it was sold at an enormous loss. It was acquired for just $139,000. Therefore, it appears that Yuga Labs may have difficulty generating a return on its investment.
Given that the NFT community is sometimes viewed as a passing trend, it seems fitting that the space’s mascot is a Punk, regardless of what transpires.
Click here to read about the most expensive NFT sold ever.