CryptoPunks: what are they and why are they so expensive?

12.09.2022
CryptoPunks: what are they and why are they so expensive?

It is unlikely that anyone will call these strange pixel aliens, monkeys and men the highest work of art. But they sell for millions of dollars. And the point here is not the visual beauty of the work.

Such well-known media as Mashable, CNBC, The Financial Times, Bloomberg, MarketWatch, The Paris Review, BreakerMag, Christie’s of London, Art|Basel, The New York Times wrote about them. And also the collection occupies a leading position in the TOP of the best NFT collections in the world.

What is the uniqueness of this collection and why it is so expensive, read our article.

 

What is CryptoPunks?

CryptoPunks is a historically valuable collection of 10,000 NFTs on the Ethereum blockchain.

They appeared even before the invention of the ERC-721 standard. They are ERC-20 standard tokens. The pictures themselves are not stored, as is now the case (on-chain, in the metadata of the token with a link to IPFS). In fact, they are not even NFT, but only a hash that can be compared with the original image using a given algorithm, and make sure that this is exactly that punk.

In 2017, this technology was the only one possible, the world of NFT was just emerging. And here the symbiosis of breakthrough technology, the uniqueness of digital art and pioneering made this collection No. 1 in all ratings. And she has not lost her position so far.

 

Community

 

CryptoPunks in numbers

  • The collection consists of 10,000 NFTs,
  • The collection is ranked No. 1 in the ranking of all NFT collections in terms of sales in the history of digital art,
  • Total sales exceeded $1.1 billion,
  • The lowest available price of 61.95 ETH (about 110 thousand dollars),
  • The most expensive Punk sold for 23.7 million dollars,
  • The average sale price for the last year is about 212 ETH (about 374 thousand dollars),
  • The first NFTs cost $1 each in 2017.

Information provided at the time of publication of the article

 

The history of the creation of CryptoPunks

In June 2017, the owners of Larva Labs studio (John Watkinson and Matt Hall) published a post on Machable “This project on the Ethereum blockchain could change the way we think about digital art.”

Then they created software that could create unique, dissimilar avatars. These were 24×24 pixels, 8-bit images depicting the head and neck of people in 10,000 unique variations. The avatars depict ordinary people in various costumes and images, aliens, zombies, monkeys.

The name “punk” came to the partners’ minds because of the punk movement and the riots of the 1970s. The creators advocated an anti-elitist origin of blockchain systems.

Founder about Cryptopunk Collection

You could get punk for free. You just had to call the mint (token release) function in the smart contract, pay the transaction fee on the Ethereum blockchain and receive the NFT to your address.

Users sorted out outlandish pictures quite quickly (in 24 hours) and began to trade them. On the first day, deals are known to sell a zombie (#987) for $1 and a strange man (#5056) for $34.

Initially, only 9,000 pieces could be crushed. The Larva Labs developers kept 1,000 NFTs for themselves, now called “Dev Punks”.

 

Types of CryptoPunks

When it was created, pseudo-random (on-chain) was used, but this was enough, because at that time there was no scam with bots.

The value of NFTs is determined by the rarity of the type

Let us show in practice how the price of NFT depends on the rarity of the type. Cryptopunk #7804 (alien) sold on March 11, 2021 for $7.57 million and #3935 (male) sold on July 20, 2022 for $123,000. As you can see, the price depends very much on the rarity of the type. But in fact, not everything depends only on them. Rarity and, accordingly, cost are also strongly influenced by attributes and their combination.

Attributes of CryptoPunks

Each NFT on the official website of Larva Labs also has its own profile page that displays their accessories such as beards, hairstyles, sunglasses, sweatshirts and so on. As with types, some attributes are less common than others. For example, only 44 punks out of 10,000 pieces wear a hat, 12 pieces from the entire collection have a clown nose. And some of the attributes are gender specific: the beanie is for men only, and the orange sides are for women only.

The number of accessories also affects its cost. The maximum number of accessories is 7. And only one Punk has 7 attributes, making it one of the rarest Punks in the collection. On the other hand, there are 8 NFTs with no attributes at all.

The value of an NFT, apart from its type, is determined by a combination of attributes

As you understand, today the cost of such rare NFTs as in the image will already amount to millions of dollars. They are certainly insanely promising investments in the NFT world. Therefore, the holders do not sell them.

Attribute rarity on CryptoPunks:

  • 3 attributes – 4501,
  • 2 attributes – 3560,
  • 4 attributes – 1420,
  • 1 attribute – 333,
  • 5 attributes – 166,
  • 6 attributes – 11,
  • 0 attributes – 8,
  • 7 attributes – 1.

 

Most Expensive CryptoPunks

The entire crypto world is closely following the sales of NFT data, because they are pioneers and have entered the history of the NFT of the world. Therefore, below we will tell you more about the most high-profile transactions.

9 CryptoPunks at Christies auction

CryptoPunks put up for auction by world famous auction houses

Larva Labs put up 9 pieces in one lot. (#2, #532, #58, #30, #635, #602, #768, #603 and #757).

What else is unique about the lot? If the NFT ID is up to 1000, then it was manually generated by the developers.

The expected price of the lot was $7-9 million. But it was sold for $16.9 million. The auction was the first major NFT sale of digital art since March 2021, when artist Beeple‘s collage was bought for a record $69 million.

 

COVID Alien #7523 at Sothebys

The growth of the NFT ecosystem came during the period of the global Covid-19 pandemic and the closure of the physical world for self-isolation. The creators of Larva Labs unknowingly created the only alien in a medical mask, which has become a symbol of 2020-2021. Therefore, its value, thanks to all these events, increased at lightning speed. As a result, at the Sotheby’s auction in June 2021, it was purchased by Shalom MacKenzie (the owner of the gambling company DraftKings) for $11.8 million.

In the NFT world, COVID Alien has become an iconic item during the pandemic

During the sale, the previous owner announced that he was going to donate 10% of the sales proceeds. It has been split between Larva Labs for research and development of additional NFT projects, and Covid-19 relief organizations.

 

Famous owners of CryptoPunks

  • World famous rapper Jay-Z bought Cryptopunk #6095 at the end of April 2021 for 55 ETH and put it on a Twitter avatar.
  • Celebrity investor and Bitcoin maximalist Mark Cuban received Cryptopunk #869 to his collection for an undisclosed amount in March 2021.
  • The world-famous rapper Snoop Dogg currently owns five CryptoPunks: #3831, #8472, #5017, #1961, #7899. In total, he spent more than 1800 ETH on them. As we wrote in our article «Who is Snoop Dogg? A global rap star, crypto and NFT influencer» the rapper is actively involved in the NFT world through his famous account Cozomo de’ Medici.
  • The real Wolf of Wall Street, Jordan Belfort, played by Leonardo DiCaprio in the film of the same name, actively became involved in trading on the NFT market and bought Punk #6033 with an electronic cigarette for 102.49 ETH at the end of October 2021.
  • Global superstar DJ Marshmello put Punk #8274 as his Twitter profile picture after purchasing for 130 ETH at the end of October 2021.
  • American YouTuber and actor Logan Paul owns five CryptoPunks: #2294, #6762, #5569, #7861, #4484. The blogger bought the most expensive of the set for 110 ETH and said that he did not plan to sell his NFTs in the near future.
  • World famous DJ and producer Steve Aoki owns three CryptoPunks: #9192, #6142, #3329. In total, they cost him 278 ETH. We wrote about one of the main NFT influencers and his collection in the article “Who is Steve Aoki? Best DJ, NFT collector, creator of the Metaverse“.

Of course, these are not all known owners of these NFTs. In fact, every celebrity who wants to enter the world of the NFT wants to get them. Since it is CryptoPunks who are the calling card and an indicator of status and prestige.

 

CryptoPunks First Collection Scandal (V1)

In fact, today we are using the V2 contract, the second version. And in V1 there was a catastrophic bug that allowed the buyer to receive NFT, and then withdraw their own ETH back.

V2 was released immediately, in 2017, after a bug was discovered. And V1 was abandoned for a long time. Until 2021. Then one of the Larva Labs developers released a special “Wrapped” contract on top of the original one, so that the tokens would remain with the owners, but at the same time, trading was carried out on a new, secure contract without a bug. And he began to sell his share of 1000 NFTs. Shortly afterwards, Larva Labs announced on Twitter that they were refusing to recognize this collection. And it was removed from OpenSea as well. With the proceeds of about 200 ETH, the developer eventually bought CryptoPunks from the V2 collection, and the community was agitated and even considered it a scam.

CryptoPunks face scam in 2021

 

Copyright takeover of CryptoPunks by Yuga Labs

In March 2022, Yuga Labs (the company known for creating the Bored Ape Yacht Club collection) acquired the intellectual property rights to the collection from Larva Labs (and also to their second product, the Meebits collection). And opened these rights to the whole world. They did this so that all owners of NFTs could fully promote them and not risk copyright lawsuits from Larva Labs (and there were such concerns among media influencers). Read more about it in our article “Larva Labs is the creator of the famous CryptoPunks and Meebits“.

 

Where to buy CryptoPunks?

All NFTs from the collection have already been in demand on the primary market. And to own one now, the buyer must buy it from someone through the Larva Labs marketplace. It is noteworthy that the buyer does not pay any additional commissions on the trading platform, as is the case almost everywhere. Given the cost of these NFTs, the fees could be very hefty. The only thing is that the buyer needs to pay, in addition to the price for the token, a commission for a transaction on the Ethereum network.

On the Larva Labs marketplace, buyers can find information about the current market status of each NFT and transaction history. Here users can bet, buy and sell CryptoPunks. The background color of each punk indicates its status. Blue means NFT is not selling, red means it is selling, and purple means there is an active rate.

 

How to buy CryptoPunks?

According to the NFTMetriya team, the most convenient interface in terms of sales history, rates and characteristics was developed by the official trading platform Larva Labs. Therefore, for sale, we will consider their own marketplace.

So, to buy one from CryptoPunks:

  • choose the NFT you want to purchase. We advise you to subscribe to their official Discord channel, as all items are listed there first.
  • download and install the MetaMask crypto wallet browser extension, which will allow you to authorize websites to access your Ethereum wallet.
  • with the extension, the Larva Labs website will recognize and include buttons that allow you to bid, buy and sell directly.

You can also purchase them on the largest NFT marketplace OpenSea. Unlike the original modified ERC-20 token standard, these CryptoPunks are wrapped in ERC-721 tokens, making them tradable on other NFT marketplaces. In total, there are 526 such improved works to date.

 

Prospects

  • Growth Factors
  • Scarcity (limited number of tokens)
  • Collection age
  • Own platform for lots
  • Many imitators
  • Celebrity holders
  • Collaborations with famous brands (for example, CryptoPunks x Tiffany & Co.)

Based on the above points, we can conclude that the collection will become more expensive, but interest in it will not fade away.

 

Conclusion

Today you can see that there are enough projects that repeat the features of the CryptoPunks collection, but attempts to repeat the success are doomed to failure.

Many are trying to replicate the success of the CryptoPunks by copying their style.

And all why? The collection has made history, and such a significant increase in value from de facto free tokens to millions of NFT dollars is primarily due to the limited edition and age of the collection (high trading volume with literally five years of history for each token) and a large community supporting the collection. The transfer of copyright to Yuga Labs also played a role, which made it possible for all owners to use and monetize in any area. Therefore, the reduction in the price of these non-fungible tokens can definitely not be expected. But rather we learn about new records for the most expensive sales of these works.