The NFT world is famous for some of its giants, many of whom you might have heard about, such as “Bored Ape Yacht Club” or “Merge”. However, there’s one more giant named “CryptoPunks”, a name you might have heard about due to all of the buzz surrounding NFTs.
Dogecoin, for instance, continues to be hotly debated, but the CryptoPunks achieved fame before money markets took note of it. In terms of NFTs on Ethereum, historically these punks have led the pack because they represent one of the earliest examples that inspired Ethereum’s ERC-721 standard that can be found in the vast majority of digital art and collectables today.
Known as CryptoPunks, these punks are composed of 10,000 portraits generated using an algorithm that includes random elements such as the hat-wearing individual or the person smoking a cigarette.
But what’s really incredible is that each CryptoPunk sold for around $7.5 million, unbelievable, right?
In the tech press, the sale became a huge story right after it was announced, with Dylan Field, Figma’s CEO, selling one of the punks.
According to a conversation he had in the Clubhouse immediately after the sale, Dylan Field commented on his hopes for a century from now when the artwork he had sold would be recognized as the “Mona Lisa of digital art”.
These images have been a source of trade for a small but dedicated community in the past. However, as time passed, its popularity gained momentum, drawing top Silicon Valley CEOs, influential investors, celebrities, YouTube stars, and other prominent business figures.
Wondering how it all started? Let’s get into everything about CryptoPunks.
A brief history of CryptoPunks
CryptoPunks – described as the most important chapter in the history of crypto art by Christie’s, is the brainchild of larva labs (founded in 2005), created by two tech enthusiasts named Matt Hall and John Watkinson.
They were released as an experiment to investigate the dynamics of scarcity and demand compared to popular collectables. The idea was crazy, as they described it, requiring, a conceptual leap.
Considering how far we’ve come since that project, it is rightfully viewed as the beginning of crypto art.
Initially, punks were given away for free.
Matt Hall and John Watkinson generated 10,000 unique characters in 2017, which were stored on the Ethereum blockchain. Prior to the introduction of NFTs and Defi, anyone could claim a CryptoPunk for nothing, except for a small gas fee.
There were 1,000 portraits Larva Labs kept in their possession, but the rest were quickly acquired by others. Today, CryptoPunks can only be purchased directly from their owners. Utilizing a unique approach, different art variations are ranked based on their rarity and personality traits, namely:
- Pipes among other things.
Every CryptoPunk has specific attributes. These CryptoPunk attributes determine how rare a CryptoPunk is, and how valuable it is consequently. For example, a beanie is the possession of 44 punks out of 10,000 in the genre. So obviously, there is more value in a punk who has on a beanie.
Now let’s see the sheer amount of them, each with its unique attributes.
- Male punks – 6,039
- Female punks – 3,840
- Punks wearing bright lipstick – 696
- Punks with muttonchops – 303
- Punks with 3-D glasses – 286
- Cherry-cheeked punks – 128
- Punks with piglets – 94
- Punks with buck teeth – 78
- Punks wearing beanies – 44
Inspiration Behind Them
London punk was the inspiration for cryptopunks.
At the beginning of the blockchain movement, Hall and Watkinson found it chaotic and counter-institutional, but it had its vibe, which they wanted to capture in their punks.
A group of non-conformists and misfits was required, they said. As generative art, each character is viewed as a unique work of art encompassing a much broader creative project, which cannot be duplicated, with a profile page that describes its particular characteristics along with its past transactions, much like CryptoPunk 8348, which has seven attributes, making it unique among Punks.
A total of 9,000 Punks were initially released by Larva Labs for free for Ethereum wallet owners, excluding gas fees, which at the time were 11 cents per Punk.
On the other hand, a total of 1,000 Punks were kept by Larva Labs. It took a while for the collection to gain traction, but it eventually sold out as a result of media coverage from outlets like Mashable.
But what made punks famous and eventually expensive? Let’s find out.
What made CryptoPunks so popular and expensive?
While critics would probably call these images pixelated, what makes them so popular?
We all are familiar with the demand and supply rule. Whenever demand exceeds supply for a particular product, prices rise. This is also true for CryptoPunks. Despite its popularity, Visa had to consider joining the NFT craze by buying a Punk for $160,000.
Outage and scarcity are two factors contributing to the increase in CryptoPunk’s demand. The popularity of this product is also attributed to its age.
NFT projects such as CryptoPunk are some of the oldest out there. An old NFT, like CryptoPunk, has the same value compared to an old painting, such as Picasso’s “Femme nue couchée au collier” from 1932 bought by Justin Sun, and tokenized.
This makes CryptoPunks even more desirable due to their age on the blockchain. Investing in Punks is generally done to get a hold of one of the older NFT works still in existence.
It is the rarity and scarcity of tokens that give NFTs much of their value and popularity. The cryptopunk movement is not left out either.
CryptoPunks will never number more than 10,000. Collectors are therefore forced to compete for these items. In light of the limited supply, CryptoPunks are in high demand and sell out quickly. Most CryptoPunks are extremely rare, making them highly sought after.
There is a lower value placed on ordinary punks than on rare punks. An alien CryptoPunk, for instance, is one of our rare pieces. This leads to their high price. There is more to a CryptoPunk than its rarity. Collectors may choose certain portraits purely because they like the way they look.
In contrast, crypto community members have been using the images for their social media profiles, resulting in an even greater demand for them.
Buyout of CryptoPunks by Yuga Labs
Yuga Labs – the company that created Bored Ape Yacht Club – purchased CryptoPunks and Meebits in March 2022. By purchasing these two projects, Yuga Labs aims to establish a “community of builders” capable of creating its derivative products.
For this reason, Yuga Labs confirmed they would transfer exclusive licensing rights, as well as IP and commercial rights, to each NFT holder. This will allow CryptoPunk and Meebits holders to develop products and artwork utilizing their NFT assets similarly to BAYC holders.
Essentially, the sale finally resolved a significant controversy, allowing users to know their rights regarding CryptoPunk NFT.
As stated in a statement, the CryptoPunk creators believe Yuga Labs will provide a better environment for their projects to thrive. “We believe Yuga Labs excel in their field, which qualifies them as a fantastic guardian of CryptoPunks and Meebits.
The emerging decentralized web will continue to thrive in their hands,” the team said.
Based on the backlash they faced while controlling CryptoPunks, Hall, and Watkinson may have a point. They responded that they will hand over their IP, watch how others use it, and take their decisions into account.
A look at today’s markets and sales figures
Today, crypto-punks can only be acquired directly from the blockchain’s marketplace, a broker, or auction houses, such as Christie’s and Sotheby’s, since the secondary market has increased their value substantially.
The CryptoPunk 7523, aka the “COVID Alien” due to its mask-wearing “attribute,” was auctioned off by Sotheby’s this past June for $11.8 million.
Taking no chances, Larva Labs itself sold 9 CryptoPunks worth $16.9 million in a Christie’s auction the month before, known as the second biggest NFT sale, followed by Beeple’s $69 million “Everydays: The First 5,000 Days.”
CryptoPunks’ Future: what lies ahead
In the wake of the COVID-19 pandemic, collector items boomed, fueling interest in cryptocurrencies and a variety of Blockchain-based projects. An ideal storm caused prices to soar.
A CryptoPunks portrait’s price is primarily determined by the supply and demand of the product.
Christie’s and Sotheby’s auction sales may even bring CryptoPunk to mainstream prominence. NFTs may draw new bidders if that happens. You’re likely to recognize it if you’re a tech or art fan and follow them often.
The NFT market may have already reached its peak. However, individual CryptoPunks with particularly desirable characteristics may still command higher prices regardless of a decline in the overall market value.
I hope you now have a better understanding of CryptoPunks. Please share your thoughts in the comments section below.
Hi, my name is Brandan Henry, and I’m an NFT, Blockchain, and Research enthusiast, as well as a content writer for NFT-onomics. I’m deeply passionate about exploring the potential of NFTs and blockchain technology. My mission is to educate people on the capabilities of non-fungible tokens and their applications. I stay up-to-date with the latest NFT news and trends, and as a full-time writer, I excel at generating creative, out-of-the-box ideas surrounding NFTs.