In NFTs, there’s nothing quite as punk as owning a CryptoPunk. A status symbol, a piece of Internet history, and an unspeakably valuable asset, Punks may truly be the most important NFT project there is.
The CryptoPunks journey to non-fungible stardom intertwines with not only the history of NFTs but of the Ethereum blockchain itself. Collectors want them, millionaires can’t get enough of them and mainstream media doesn’t understand them. The rise of popular generative avatar projects like Bored Ape Yacht Club can be traced directly back to the CryptoPunk mold.
So for those of you who aren’t in the know, we’ve tapped investor, advisor, and all-around futurist GMoney for an ultimate guide to CryptoPunks: the collection of 10,000 uniquely generated pixel art characters that are some of the most expensive NFTs that money can buy.
What are CryptoPunks?
Launched in June of 2017 by product studio Larva Labs, and acquired by Yuga Labs in 2022, CryptoPunks is one of the first NFT collections on the Ethereum blockchain. It consists of 10,000 unique 24×24 pixel art images that depict humans (male and female), apes, zombies, and aliens. Each Punk can exhibit a combination of 87 unique attributes or, as most call them, traits. These include things like hats, pipes, necklaces, earrings, eyepatches, and more.
The maximum number of traits that a single punk can have is seven. However, some punks can even have zero traits. You can see what this means in relation to the value and scarcity in the image below.
Who created CryptoPunks?
Unlike the more recent projects it inspired, CryptoPunks didn’t initially set out to create a community – it didn’t even have a roadmap. The project was an experiment conceived by Canadian software developers and Larva Labs founders Matt Hall and John Watkinson.
At the time, the NFT space was a far cry from the robust market we see today. As a result, Punks initially started out slow – garnering a group of collectors who believed in the technology that the Ethereum blockchain had to offer. They were given away for free at the start to whoever wanted them. Because you needed an Ethereum wallet to collect one, supply was limited to those who were already invested in crypto.
“What makes CryptoPunks important is that a community grew around them organically,” explains GMoney. “There is a provenance around them because they are one of the first NFT projects on Ethereum – and they were free to claim at the start.”
GMoney says early supporters of CryptoPunks, such as now top-tier influencers Pranksy, DaveDave, and SeedPhrase, “realized earlier than most that digital ownership was going to be spreading more and more on-chain. Being able to own and claim stuff on-chain was going to be very valuable.”
Since 2017, CryptoPunks has grown from a simple, niche internet fad into the end-all-be-all of NFT projects. While it was not technically the first NFT project on Ethereum, it is undoubtedly the most influential. Many of those patient enough to hold have become multi-millionaires, and those lucky enough to get in before the 2021 craze are regarded as some of the most forward-looking people in the NFT space.
How to buy a CryptoPunk
Those new to the NFT space will inevitably come across CryptoPunks sooner than later. And when they do they’ll immediately understand one thing: Punks are an invaluable asset.
Let’s put the pricing in perspective:
On July 6th, 2017, Alien Punk #3100 sold for 8 ETH ($2,127). At the time this would’ve seemed like an absolutely ludicrous price to pay for a JPEG. Yet, almost four years later on March 11th, 2021, that same Punk sold for a staggering 4,200 ETH ($7.58M).
Although we’re talking about the highest Punk sale to date (for now), 100x flips were far from uncommon during the duration of the 2021 CryptoPunk bull-run. Throughout the year, the NFT community saw Punks sell for as low as 7 ETH, only to explode towards the fall, making the price of even the cheapest available Punks ~100 ETH. As of March 2022, the most recent Punks sales were priced at around 60-100 ETH each, with more rare punks selling for 150+ ETH. If you have the available funds in your wallet, you can buy one on OpenSea.
Auction house Christie’s has to be given a great deal of credit for the development of the Punk marketplace by exposing those in more traditional art spaces to Punks. As a follow-up to the major auction house’s $69 million Beeple sale in March, Christie’s presented a collection of nine CryptoPunks in May that sold for a whopping $16.9 million.
Why are CryptoPunks so expensive?
It’s not just the price that makes Punks so valuable. CryptoPunks have grown to be seen as both art, an investment, and a status symbol.
Considering their history, and how they grew and developed alongside the Ethereum blockchain, some argue that owning a Punk is like placing a bet on the importance of NFTs and the Ethereum blockchain. The early supporters of Punks, for the most part, didn’t just chance upon the project. As GMoney put it, “you had to be around in crypto early on to get involved with CryptoPunks.”
In short, the project is valued so highly because of its historical significance and the way in which it represents a belief in Ethereum.
On social media, people who own CryptoPunks are often seen as builders and visionaries. They are given the presumption of trust and status. In fact, a number of collectors have created entire personas, projects, communities, and brands around a single Punk.
Whatever the ratio of social to financial value may be, celebrities, venture capitalists, and even hedge funds have been joining the CryptoPunks race in droves. And when all is said and done, it’s hard to discount a project that turned collectors into millionaires nearly overnight. The collection continues to be valuable because of the success early collectors were able to secure.
While Punks may be one of the top NFT projects of all time, the team behind the endeavor isn’t immune to controversy. In February 2022, Larva Labs faced backlash when one of their co-founders, John Watkinson, sold off his stock of V1 CryptoPunks, which were born from the original CryptoPunks smart contract. Days after selling, the team attempted to blacklist the budding project. This denouncement had the potential to cause the price of V1 Punks to plummet, creating a financial loss for everyone who bought them from Watkinson. Watkinson, meanwhile, kept all the money from his sales and would incur no losses from the drop in price, which was a drop that was caused by his own company.
The community at large was split on whether or not what Larva Labs did was actually wrong. Some argued that the company wasn’t worthy of criticism, as the team clearly stated that they didn’t approve of the project and intended to sell. Others found fault with the company because the team only condemned the project and stated that they were selling two days after the cofounder had already sold.
This isn’t the first time the company has received criticism from the NFT community. Larva Labs has also faced backlash for allegedly attacking valid projects that aren’t actually trying to scam people, and for failing to clarify what rights users have to the V2 Punks.
CryptoPunks acqusiton by Yuga Labs
In March 2022, Yuga Labs – the creator of Bored Ape Yacht Club – acquired both CryptoPunks and Meebits. With this acquisition, Yuga Labs says they aim to foster a “community of builders” creating derivative works around the two projects. To accomplish this, as they’ve done with their own BAYC collection, Yuga Labs will transfer IP, commercial, and exclusive licensing rights to the individual NFT holders. This will enable CryptoPunks and Meebits owners to create artwork and products based on their NFTs the same way BAYC owners have.
As part of the deal, Yuga Labs also received 423 CryptoPunks and 1711 Meebits. When asked what they plan to do with them, Gordon and Gargamel, the pseudonymous co-founders of Yuga Labs, said, “We’re not in a rush to do anything but give people their IP, see what they build, and listen.”
The future of CryptoPunks
At only a few years old, CryptoPunks is already a legacy project in the NFT space. All need-to-know information about the project has been out in the open for a long time. Punks were born, and will continue to live, immutably, on the Ethereum blockchain.
With the NFT space growing as fast as it is, Punks will always be a landmark endeavor. As stated by GMoney, “CryptoPunks will continue to be a very big pillar of the NFT community. They don’t need to evolve and nothing needs to happen for them to cement their place in history.”
Still, with a new owner, Punks will likely undergo some changes. Yuga Labs currently gets a cut each and every time a Bored Ape is resold. However, Larva Labs didn’t do that with CryptoPunks and Meebits. Yuga Labs says they don’t plan to change that, but they didn’t offer any statement indicating what they do plan to do with the collections.
Beyond the utility that is still to be imagined, the most interesting part of the CryptoPunks journey is that it’s still too early in the game to truly make sense of the ecosystem. Blockchain technology is disrupting the financial infrastructure of the world, and NFTs are shifting how we think about art, media, community and even the broader concept of consumer ownership.
With NFTs often looked down upon as a niche and temporary movement, it seems very fitting that the mascot of the space would be a Punk. And if the future is to be run by crypto degenerates, being called a Punk might just be the best compliment you can receive.
Additional reporting by Alex Yates.
Editor’s note: At time of publication, members of the nft now staff are holders of CryptoPunks NFTs.
Source: NFT Now