Understand why CryptoPunks lost to BAYC from the "V1 Punks Controversy"

This article comes fromdecrypt, Original Author: Andrew Hayward

Odaily Translator |

This article comes from

, Original Author: Andrew Hayward

Odaily Translator |

For many people in the NFT community, the CryptoPunks launched by Larva Labs are like the gold standard for avatar-like NFTs on the Ethereum chain. Many celebrities on Twitter like to use CryptoPunks as their preferred identity symbols. Driven by the market, CryptoPunks Sales have gone up even more.

However, due to some recent events, the CryptoPunks starlight seems to be waning somewhat, and Larva Labs has also started to seriously scrutinize some "own behaviors". In fact, as the creative team of CryptoPunks, when Larva Labs first released the series of NFTs in 2017, there was a glitch in the original smart contract, so Larva Labs abolished the first version of the contract and reissued the NFT. In the end, the V2 contract successfully introduced CryptoPunksNFT to the encrypted asset market and achieved great success. The transaction volume of this series of NFT has exceeded 2 billion US dollars so far.

However, some of these "V1 CryptoPunks" NFTs were "wrapped" via community smart contracts and re-issued as ERC-721 Ethereum tokens, though each token had a different background color than the standard Punks . In recent years, with the market heat and rising prices, these NFTs with a sense of age are now being sold as historical relics.

V1 Punks' website reads:

“The reappearance of the early version of the Punks smart contract was driven by a fast-growing community, including early Punks airdrop participants, early users of the NFT industry, and some very talented developers,”

But recently, Larva Labs took action and suggested that the V1 Punks NFT is not a “real” CryptoPunks NFT. On January 25, 2022, Larva Labs officially tweeted:

"'V1 Punks' are not official Cryptopunks, and while we have 1,000 of them... we don't want it, so the community can judge for themselves which ones are good and bad. We believe that any proceeds should be used to buy real Cryptopunks Cryptopunks!"

However, to the community's dissatisfaction, the Larva Labs creative team actually sold dozens of V1 Punks themselves, and after making a profit, they beat them back, claiming that these NFTs should not be regarded as legitimate CryptoPunks. In order to calm the anger of the NFT community, Matt Hall, co-founder of Larva Labs, apologized for selling V1 Punks in an official statement on Wednesday (February 2), calling the move "stupid" and "mistakes." of.

Speaking about selling V1 CryptoPunks, Matt Hall said:

According to Matt Hall, Larva Labs made a profit of 210 ETH (approximately $622,000) from the sale of the V1 Punks NFT, and used some of the funds to purchase standard (V2) CryptoPunks. Next, the team plans to use the remaining funds to repurchase part of the CryptoPunks NFT and donate 210 ETH to The Rainforest Foundation.

Matt Hall added:

"Before we did this stupid thing, we had always been very correct about the CryptoPunks project. Now we have learned the painful lesson and hope to make up for our mistakes through this donation."

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Is Larva Labs' counterattack effective?

One detail in the statement released by Larva Labs caught the community's attention, as Matt Hall suggested that Larva Labs could take some kind of legal action around wrapping V1 CryptoPunks.

"We didn't initially pursue the V1 project for artwork and CryptoPunks copyright infringement because we didn't want to give V1 Punks any extra attention, but now many CryptoPunks owners are calling on us to take action and we agree with them. Don't Confusing the legality of the 'V1 Punks' project, which has no right to use the CryptoPunks name, we will take appropriate action in the coming days."

It's unclear what such a move might look like. For example, Larva Labs may require the NFT marketplaces OpenSea and LooksRare to remove relevant NFTs under the Digital Millennium Copyright Act (DMCA), and to those that allow users to trade V1 Punks NFTs, or for V1 Punks marketplace websites, and for packaging V1 Punks The smart contract's website issued a warning.

But so far, Larva Labs officials have not given a clear response and opinion.

Collector DCinvestor wrote on Twitter: "I've never seen any team do what Larva Labs did with CryptoPunks, CryptoPunks has a lot of IP value, but they screwed up this project. At this point, I I think this move is to transfer personal intellectual property rights to the 'official' CryptoPunks NFT holders, or they should learn from BAYC and launch some derivative projects like Mutant Ape, otherwise Larva Labs will make this project more and more confusing, and finally It may even cause the value of NFT to be wiped out."

Another well-known NFT collector, Anonymoux, also posted his opinion on Twitter. He said that after seeing the Larva Labs statement, he decided to sell his Punks and chose to focus on other projects because he already felt " anxiety":

"Time to sell Punk #2311, if a company's executives are constantly messing up the business, I will definitely not own the stock of this company, so CryptoPunks is the same, I am not going to continue to follow this project, but Big thanks to Punks for being instrumental in my NFT journey.”

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Does CryptoPunks V1 still have value?

Frankly, it's unclear what Larva Labs' next move will be when it comes to wrapping V1 CryptoPunks, but V1 NFTs are still available on the market for now -- and some collectors are already betting on these NFTs with potential future value. will be further expanded.On Wednesday (February 2), NFT investment fund Meta4 Capital announced that they purchased two V1 CryptoPunks: one for 1,000 ETH (approximately $2.8 million) and the other for 200 ETH (approximately $556,000). ) price to buy. Meta4 Capital said on Twitter that the price reflects that the "true" value of the V1 CryptoPunks may only be around a quarter of the value of the V2 CryptoPunks.Meta4 Capital managing partner Brandon Buchanan explained that he has respect for Larva Labs and its co-founders Matt Hall and John Watkinson, and their need to protect IP and oversee the CryptoPunks ecosystem, but as an emerging asset class, most NFT rules and standards have not been formulated through careful consideration. Although innovation in this field is fast, there are still many problems.

Nonetheless, Brandon Buchanan does not believe that NFT creators should focus on "conforming to popular taste" and then let the market decide which NFT series can be successful. Not only that, he also suggested

Larva Labs should focus on creating value for NFT holders and listening to the community—— "Once the value of Larva Labs and its NFT holders is fully aligned, I think CryptoPunks can still unlock more value."Meta4 Capital tweeted that some defective versions of NFT products still have a market advantage in the secondary market. Essentially, V1 Punks are based on the code deployed by Larva Labs to the immutable blockchain platform-so these Punks are not Knockoffs, even if Larva Labs isn't impressed with the way they've been brought back to life. Brandon Buchanan advises:

"It's not really a copyright issue, as Larva Labs is trying to regulate the secondary market for V1 Punks, and has already started looking for assets to distribute and claim.

Many misprint collectibles (stamps, comic books) also have a history of being recalled, but these misprint collectibles can still be sold on the secondary market, sometimes for an even higher value, and we should look at V1 Punks in the same way.

I actually think it's been an exciting experience for Larva Labs, and history/lineage should be embraced rather than excluded. "

Matt Sanders has a unique take on V1 Punks. He feels that V1 Punks are like song demos that help provide a historical record of the art and build a narrative around it. Some fans or collectors may even find the V1 or "demo" version NFTs make more sense — but as the creator himself, he suggests respecting Larva Labs’ views on what constitutes “true CryptoPunks.”

Matt Sanders concluded:

"Most collectors will prefer the 'official version' of the V2, but some may prefer the V1 Punks, the two versions are not the same, which is important, the V1 Punks also reflect the creator's intentions, so of course they should Give it some status."

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CryptoPunks want to cool down?

Regarding the official statement released by Larva Labs, the NFT community generally reacted negatively, and this negative sentiment is still continuing to ferment. Because the community believes that with the continuous development of the NFT field, Larva Labs should provide practicality to holders, but they do not know what Larva Labs will bring to themselves in the future.In recent months, some CryptoPunks holders have complained about the program, arguing that they don't know how to profit from the images they own. And there have been growing community complaints about Larva Labs staying out of the way — a stark contrast to other avatar-like profile picture (PFP) NFT projects that are popular today.

In fact, Bored Ape Yacht Club (BAYC), another giant in the NFT field, is also developing very fast. Compared with CryptoPunks, the difference between the two is very significant.

Bored Ape holders can use images they own for any purpose

——Including merchandise, metaverse, and brand promotion——In addition, Yuga Labs also provides holders with additional benefits such as free NFT, exclusive merchandise, and events. "Boring Ape" is like a private club full of privileges, but It is also a public-facing social media avatar. The "Bored Ape" NFT series will also directly reference pop culture, everything from Magnum PI's Hawaiian shirts to togas and other historically inspired clothing, to the rainbow suspenders popular with gay teams, mixed with references to punk rock and 90s Hip hop music elements.

Recently, a large number of celebrities have also joined the ranks of "Boring Ape", and the mainstream image of this NFT series has been greatly improved-and the result is obvious, and the price of "Boring Ape" NFT has also risen. In December 2021, the floor price of Bored Apes (that is, the cheapest NFT in the series) surpassed CryptoPunks for the first time, and the gap between the floor prices of the two projects is still widening.At the time of writing, Bored Ape's floor price has exceeded 100 ETH ($294,000), while CryptoPunks' floor price is only 69 ETH ($203,000). According to data from CryptoSlam, from December 2020 to January 2021, despite a broader rise in the NFT market, the trading volume of CryptoPunks fell by 28%.Also in December 2021, Punk 4156, a well-known NFT collector and co-creator of the Nouns project, sold his CryptoPunks NFT holdings for $10.26 million. Punk 4156 said that the reason for this move is very simple, that is, because he can't understand Larva Labs' handling of intellectual property rights, he decided to withdraw from the project.