CryptoPunks is one of the most well-known and well-funded NFT initiatives. It’s been dubbed a “primitive NFT collection” that happened by chance. But that doesn’t change the fact that it was the catalyst for the digital art revolution, and it also set the benchmark for the collectables business.
What is CryptoPunks?
CryptoPunks are 10,000 unique collectable 24×24 pixel avatars in the form of the non-fungible token (NFT) embedded in the Ethereum (ETH) blockchain created by an algorithm stored in a smart contract. The Larva Labs developed them, a two-person team consisting of Canadian software developers Matt Hall and John Watkinson. The collection was inspired by the Punk culture, such as the cyberpunk movement, artist Daft Punk, etc. In the initial release in 2017, they could be claimed for free by anyone with an Ethereum Wallet. But now, everyone can trade on the blockchain marketplace. Amid the 10,000 CryptoPunks, 6,039 are males, and 3840 are female. They are all made digitally scarce and unique via blockchain technology. Each of them is algorithmically generated by computer code and thus, none of them exactly resemble and some traits are rarer than others. Each of these art images displays a distinctive appearance and randomly generated features.
Possession and ownership of digital art are somewhat confusing that one can possess digital art but still not own it as digital art can appear anywhere and everywhere. With the power of blockchain technology, it effectively solves the problem:
- It certifies the ownership of a digital art
- It makes buying and selling fast
- It provides a layer of trust that takes the need for lawyers and middlemen off the equation, making fraud impossible.
Thus, purchasing a CryptoPunk makes you a unique owner with complete information of all previous owners. The ownership history of every CryptoPunk is tracked and documented in the blockchain. However, despite ownership being undisputed, owning digital art is like owning a work of physical art that is permanently on loan to a public museum.
Owning a CryptoPunk requires no maintenance cost and the artwork has guaranteed provenance and can’t be destroyed or damaged. It does not need insurance, shipping fees, storage fees, or transaction fees during transactions. The creator of CryptoPunks spoke about these artworks in an interview that “is incorruptible and promises to be extraordinarily long-lived”. No one knows what the future beholds, but after three years, the sale volume and price have rocketed and are still on the rise.
The collection appeared in selected press and appearances including CNBC, The Financial Times, Bloomberg, The New York Times in 2018 and again in New York Times 2021
As of the end of 2021, 12,131 transactions had been made in the previous 12 months, with an average sale price of $230,342. The collection has grown massively in value over the last eight months. Compared to early April 2021, only over 8000 sales were recorded, with an average sale price of $30,412.
The figure above shows CryptoPunk’s average price and total daily volume in ETH over the last quarter of 2021. These figures have been stable over the period, but a public stunt occurred on October 28 2021, causing these two figures to skyrocket. What happened was Punk 9998 were sold for 124.457.07 ETH, approximately $530 million but didn’t sell at all.
Omitting that wash trading, the highest average price is 238 ETH, and the lowest is 61 ETH over the last quarter of 2021. At the same time, the mean for the average price is 213.89 ETH indicating a stable period. Compared to the first quarter of 2021, the average price has increased 12 times, and this increment shows a strong belief in these punks from the community.
Larva Labs, which created the CryptoPunks, said on Twitter that “someone bought this punk from themself with borrowed money and repaid the loan in the same transaction.” This technique is called wash trading, which is banned because trading with yourself can artificially inflate prices and suggest more demand than exists. The creators also mentioned adding filtering to avoid notifications for these kinds of transactions in the future.
Market and Community
A short video of Logan Paul talks about his involvement with CryptoPunks and Gary Vee that attracts over 6 million views.
CryptoPunk is famous in the NFT’s community and the blockchain world. It has many appearances over the internet, social platforms, and headlines on notable digital newspapers. Many famous people and celebrities that own this artwork are Jay-Z, Snoop Dog, Steve Aoki, Gary Vee, etc. Many enthusiasts use images of CryptoPunks as their display profile on many social platforms for many purposes.
Larva Labs is a two-person team consisting of Canadian software developers Matt Hall and John Watkinson. They were famous for their app developments for Google and Microsoft and the number one paid game on android, RetroDefense.
Larva Labs, the creator of CryptoPunks, just signed with United Talent Agency (UTA) in a representation deal that will bring one of the earliest and most iconic NFT projects into the entertainment and branding worlds.
As one of the earliest NFT collections on the blockchain and support from famous people, CryptoPunks has created hype and attracted great belief into these artworks from the community. The collection was being claimed for free in its initial release back in 2017, but now, the lowest CryptoPunk is traded for 67.95 ETH with the recorded highest sale of $10.26 million. This collection is currently on-trend.
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DISCLAIMER: The Information on this website is provided as general market commentary, and does not constitute investment advice. We encourage you to do your own research before investing.