Finally! It has happened. The rumors circulating almost three weeks ago about the potential sale of CryptoPunks have become a reality following last Friday’s announcement. Yuga Labs, the famous firm behind the prominent NFT collections, Bored Ape Yacht Club, has purchased the Intellectual Property rights of CryptoPunks.
It’s been amazing to watch the BAYC ecosystem use their rights to collaborate and build awesome shit we never could have dreamed up. We can’t wait to see the Cryptopunks and Meebits communities do the same.
— Yuga Labs (@yugalabs) March 11, 2022
Before the purchase announcement, CryptoPunks was a famous collectible on the Ethereum chain in the NFT niche alongside BAYC. Following Friday’s disclosure, Punks now belong to the same brains behind the BAYC. But, why was this popular collection put up for sale, and what is the impact on the current holders?
Explaining BAYC and Punks
The NFT market witnessed explosive growth in 2021, with trading volume hitting $23 billion per DappRadar. Did you know this boom was led largely by collections of BAYC and Punks? That’s right. These superb NFT collections sold greatly and still does till now.
Let’s talk about the history of the famous collectibles. Punks, comprising 10k NFTs, was founded in 2017. Then, over 90% of the total supply was offered for free. When the NFT market grew exponentially in 2021, Punks rose to new heights, cementing its position as a status symbol. Punks’ collection sold for over $680 million in one month.
Its competitor BAYC emerged much later. Unlike Punks, BAYC evolved to become a membership club with some privileges. This attracted celebrities and entrepreneurs. Anyone with a BAYC NFT is termed an elite member. The phenomenon gave birth to other BAYC-themed enterprises like Arizona Iced Tea.
Disputes Leading to the Sale of CryptoPunks
Some people blame the erraticness of Larva as the reason for selling Punks. Holders frequently lamented that the developer neglected the project and showed no commitment to drive the project forward even as the NFT market grew. This was unlike its counterparts Yuga.
While Yuga Labs issued BAYC NFT owners permission to use the pictures as they deem fit, Larva was reluctant to do the same for its dearest Punk holders. The uncertainty surrounding the commercialization for Punks coupled with lack of commitment from Larva sickened holders. This created controversy among prominent holders, leading to the project’s abandonment.
A collector with the pseudonym Punk 4156 complained of the growing frustration in Larva’s refusal to address Intellectual Property issues. As a result, he sold his collection for $10M.
Another incident occurred last month when Larva shut down a smart contract based on the fundamental contract that allowed the minting of wrapped NFTs. The developer would later apologize for their actions, but they had already left a negative impression. However, they could battle a potential lawsuit for their action.
While Larva focused its attention on derivatives and neglected their obligations, BAYC is attracting celebrities like Hip Pop legend Snoop Dogg and Stephen Curry. Since the year began, the floor price of BAYC has constantly increased, which correlates to the rising demands.
With CryptoPunks Sold, What Should We Expect?
Last week’s announcement confirmed that the Punks collection had been sold to Yuga. It’s a new beginning for the company, but that won’t change anything for its holders. Yuga has already stated that its holders will have equal rights with Bored Apes NFT holders, including commercialization rights. That’s good news, after all.
With that news, Punk holders are at liberty to do whatever they want with their collectibles. Yuga has stated it will not act upon any past Larva Labs requests. So, Punk holders should be rest assured that they would neither face any litigation nor have to deal with copyright issues. A new era has begun.
It remains unclear what Yuga will do with the acquired intellectual property rights. Rumors suggest that the IP could be used for games. One clear thing is Punks won’t become a membership club like its twin BAYC.
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