What are CryptoPunks?

  • CryptoPunks is a large Ethereum-backed NFT project from 2017, making it one of the earliest examples of cryptocurrency collector items.
  • Costs skyrocketed as the largest NFT market expanded in 2021, leading to several sales exceeding $XNUMX million each.

The market for collectible cryptocurrencies launched as non-fungible tokens (NFTs) exploded in 2021, with $2.500 billion in transfer volume in the first six months as NFTs entered the mainstream.

The boom also caused NFT enthusiasts to rediscover several early non-fungible tokens, propelling the value of these collector cryptocurrencies to uncanny highs to date.

One of these early NFT projects is Cryptopunks: A group of randomly generated pixel-based avatars. Several of the weirdest and most desired CryptoPunks have sold for millions of USD. Really.

Here's what you need to understand about one of the most popular NFT collections.

What are CryptoPunks?

Made up of breakthrough studio Larva Labs, the CryptoPunks are a succession of 10.000 images turned into NFTs on the Ethereum blockchain. An NFT is aptly a deed of ownership of a digital item, and in this situation, owning a CryptoPunks NFT assumes that you are the sole owner of a unique pixel avatar.

Each CryptoPunk is randomly created from a list of dozens of attributes, meaning there is a wide variety of skins: people, zombies, apes, and aliens too. Aliens and zombies are among the most popular avatars and have fetched some of the highest selling costs to date.

Where do the CryptoPunks come from?

Believe it or not, the CryptoPunks were released for free in 2017. Ethereum's ERC-721 non-fungible token tier was missing at the time, and the two-person Larva Labs team released it as a trial. Ethereum wallet owners took the 9.000 CryptoPunks that were made available to the public, while Larva Labs kept the rest.

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NFT volume gradually increased over the next three years, but it wasn't until late 2020 and crucially early 2021 that demand skyrocketed for these provably few digital collectibles. The value of CryptoPunks on the secondary market skyrocketed, leading to multi-million dollar NFT sales, auctions at Christie's and Sotheby's, and a massive number of CryptoPunks used as Twitter profile pictures.

Did you know?

CryptoPunks were the cause of well over $1.180 billion in total trading volume, as of September 1, 2021.

What is special about them?

One of the biggest drivers of demand for CryptoPunks is that we are talking about one of the oldest NFT projects, and the first set of randomly generated profile pictures to truly fit the cryptocurrency social network. They have inspired a growing tide of NFT sets of profile pictures, from Bored Ape Yacht Club to Doodles and more, all of which only reinforce the dominance and legacy of the source startup.

The CryptoPunks also have some high-profile owners, including rapper Jay-Z, YouTube personality Logan Paul, and tennis champion Serena Williams.

Additionally, there are clear differentiators that make some CryptoPunks more desirable and important to collectors. Alien avatars are the strangest of random images, and as such alien CryptoPunks are among the most expensive NFTs sold to date. Ape and zombie skins are also in high demand.

However, most of the CryptoPunks are human-like with different properties and add-ons, and the simpler looking ones are near the bottom of the market relative to price in the NFT markets.

How to acquire CryptoPunks

Although it is possible to see all CryptoPunks on OpenSea, the main secondary market for NFTs, they can only be purchased through the Larva Labs web portal.

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You will need to log in with an Ethereum cryptocurrency wallet, such as MetaMask, and then you will have the ability to buy, bid and sell CryptoPunks through the official site. Luckily, Larva Labs has a handy tracker that makes it easy for you to see all the Punks listed in order of price from lowest to highest.

Did you know?

The most expensive cryptocurrency sold to date was for $11,8 million worth of ETH in June 2021 at a Sotheby's auction to Shalom Meckenzie, the largest shareholder in DraftKings.

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The future

What's next for CryptoPunks? Well, they are likely to continue changing hands in the secondary markets, likely causing huge returns for capitalists who bought before the surge.

There's no telling if today's level of demand is going to continue, but the Punks' entry value continues to rise. The minimum value reached USD 100.000 at the beginning of August 2021 and exceeded USD 150.000 a few days later. It is currently over $200.000 at the time of writing this article.

Financial services behemoth Visa became the unlikely owner of a CryptoPunk in late August 2021, calling the NFT a “landmark machine of commerce” and suggesting that “NFTs will play a substantial role further down the road from retail, social media, fun and commerce.” In the instant after the announcement, the CryptoPunks market skyrocketed, with well over $101 million worth of NFTs from the collection sold on that day alone, a record in just one day, at the time of writing.

By the end of 2021, CryptoPunks had made their mark on the art world, gracing London gallery walls and invading Miami's Art Basel fair. They are even making inroads into Hollywood; Larva Labs has signed with United Talent Agency to represent the company as it explores bringing its traits to film, TV, video games and more. Can a cartoon be far from the CryptoPunks? We shall have to wait and see.

But there were some disgruntled comments from the CryptoPunks social network. Throughout 2021 and 2022, other high-profile NFT collections have emerged to challenge CryptoPunks—most notably Bored Ape Yacht Club, whose floor price surpassed that of CryptoPunks. As the market shifts towards NFTs with add-on tools or virtues, Larva Labs remained silent on key issues such as the commercial and intellectual property rights CryptoPunks owners have over their NFTs. Things came to a head in December 2021, when a prominent figure on the social network, Punk4156, sold his CryptoPunk for well over $10 million, declaring that it was “time to move on”.

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Months later, Larva Labs drew fresh criticism after selling “V1 CryptoPunks,” a previous iteration of the NFT series that was dropped after a flaw in the capable contract was discovered. The company was accused of sending mixed messages, having previously suggested that the V1 Punks were not “real” CryptoPunks. In a statement posted on the official Larva Labs Discord, co-founder Matt Hall apologized for the sale of V1 Punks, calling the move "stupid" and a "bad choice."

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It seems unlikely that Larva Labs will release more CryptoPunks, as a significant part of their interest is that their supply has limits and that they are among the oldest NFTs out there. Instead, the company began moving on to other projects, such as the 2021 Meebits—a group of 20.000 three-dimensional voxel avatars shaped in the same spirit as the CryptoPunks.

Mentioning the above, at the moment there could be more progress around the CryptoPunks. Among other things, in August 2021, Larva Labs announced that it had put all the CryptoPunks artwork already on the Ethereum blockchain. It is a move requested by collectors to help ensure the longevity of NFTs, so that they do not one day disappear from the web. While it was expensive to put everything on-chain, the move may add to the "durability" of CryptoPunks' investments.

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