CryptoPunks Has a "Commercial License" Following Yuga Labs Acquisition

Bored Ape Yacht Club (BAYC) and CryptoPunks are currently the two most valuable series in the NFT market in terms of market capitalization and reserve price. But just today, Yuga Labs, the developer of BAYC, announced that it has acquired two NFT series, CryptoPunks and Meebits, from Larva Labs, including brands, art copyrights and other intellectual property rights.

CryptoPunks is the second NFT project launched by Larva Labs and is the most successful project. Larva Labs also launched the third NFT project Meebits last year, which is designed to be used in the future metaverse and online game world, and has also achieved good results.

Matt Hall and John Watkinson, co-founders of Larva Labs, said in a press release: "Yuga Labs is an innovator in social avatar projects and the best company in the world at running them. They will be the ideal stewards of CrytoPunks and Meebits .In their hands, we believe both projects will continue to be vital, thriving projects in the decentralized web."

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CryptoPunks' 'commercial license' sparks controversy

New York-based software company Larva Labs created its famous CryptoPunks NFT collection in June 2017, a collection of 10,000 algorithmically generated 24×24, 8-bit style stamped and pixelated artistic images. Each CryptoPunks NFT is randomly generated from several different properties, so no two CryptoPunks are exactly alike, guaranteeing their uniqueness.

Among the 10,000 NFTs, there are 9 types of aliens, 24 types of apes, 88 types of zombies, 3,840 female and 6,039 male characters, each with unique characteristics, including glasses, cheeks, braids, chimneys, hair colors, beanies and more. Arguably, the more unique the features, the rarer the NFT.

However, it is such a set of "images" released for free. In just four years, its popularity is far beyond imagination. Nearly 50 ETH (~$160,000) bought CryptoPunk #7610 to join the NFT craze.

To sum up the reasons for the popularity of CryptoPunks, in addition to being respected as the oldest project in the NFT market and the earliest project to gain widespread attention and its scarcity, celebrity drive is also one of the reasons. Including Gary Vaynerchuk, Jay-Z, Serena Williams are all its senior fans.

However, the celebrity effect of CryptoPunks was gradually replaced by the sudden emergence of BAYC.

Inspired by CryptoPunks, Yuga Labs launched and sold to the public the BAYC series last April, an ape-themed NFT avatar project. There are a total of 10,000 ape characters in the series, and the apes are also different because of their facial expressions, headgear, clothing and other characteristics. Celebrities including TV host Jimmy Fallon, NBA legend Shaquille O'Neal, NBA Commissioner Daryl Morey, reality TV star Paris Hilton and actress Gwyneth Paltrow have used BAYC's image as their social media profile picture or for public display. The actions of these celebrities sparked public interest in BAYC.

One of the reasons why BAYC was able to catch up with CryptoPunks in a relatively short period of time is that Yuga Labs has already granted full permission to all BAYC holders, including using NFT for any commercial purpose. Many entrepreneurs quickly took advantage of this to launch various BAYC-branded businesses. Famous collector Jimmy "j1mmy" McNelis cooperated with Universal Music Group to create 4 BAYC NFTs held by him as "Metaverse Band" KingShip; Hollywood agency Creative Artists Agency (CAA) signed a cooperation with the famous NFT collector 0xb1 partnership to commercialize his personal NFT collection, which includes BAYC.

In contrast, Larva Labs, the creator of the CryptoPunks series, has been reluctant to submit an NFT to its NFT, although it also cooperated with the Hollywood agency United Talent Agency (UTA) last year to seek publishing opportunities based on its film, television, video games and other entertainment platforms. Granting similar commercial licenses to holders without providing holders with the opportunity to add additional benefits has long been a source of controversy among CryptoPunks investors. While many CryptoPunks holders see them as their respective NFTs and have built social media brands around NFTs, controversy continues to rise due to the absence of written permission.

In December last year, anonymous collector Punk4156, the co-founder of the NFT project Nouns on the Ethereum blockchain, sold CryptoPunk #4156 for 2,500 ETH (approximately $10.25 million), and expressed his feelings about the future of Larva Labs and CryptoPunks Frustrated, the IP dispute was a big reason for his sale.

Eric Conner, co-founder of EthHub, offered his opinion that CryptoPunks holders should take over IP ownership in order for the NFTs they hold to become valuable and meaningful: “I don’t think Punks need to be in the arena measured by influence.” Competing with other NFTs. However, I do think Larva Labs should hand over content licensing and IP to the community. Let those who get it take over."

Last month, Edward Lee, a professor of law at Chicago-Kent School of Law, published a research paper attempting to unravel the mystery of CryptoPunks' licensing.

Lee stated in the paper that CryptoPunks' official website does not provide terms to give buyers content licenses and rights to use characters. In contrast, Meebits, a new NFT project launched by Larva Labs, clearly states in the terms: Under the Meebits content license, holders of Meebits NFT can obtain "limited, global, non-exclusive, non-transferable use, copy, and display artwork for Meebit purchased by you to commercialize your own physical goods (commercial use) that contain, consist of, or consist of artwork from Meebit purchased by you, provided that such commercial use does not include any form of Collaboration or participation with any brand or other 3rd party, or allow you to earn additional revenue totaling over $100,000 per year.”

But Larva Labs' terms page for CryptoPunks does not state that the allowed NFT owners can use CryptoPunks. Why?

Although as early as 2018, John Watkinson, the co-founder of Larva Labs, had asked lawyer Eric Adler "hope every Punk NFT holder becomes a copyright owner", when UTA represented CryptoPunks characters in movies, TV, video When it comes to games, music, and publishing deals, that may not be practical for Larva Labs, which has already released most of its NFTs for free, and typically film studios need to acquire exclusive rights to use copyrighted characters in films.

In reply to Watkinson, Attorney Adler stated that the original copyright owner is still the copyright owner, that is, Larva Labs is still the copyright owner of the entire CryptoPunks, even if the CryptoPunk NFT is transferred from one holder to the next. However, the assignment of a copyright interest requires a writing "signed by the owner of the transferred rights." Larva Labs doesn’t even know who the holders of the CryptoPunks NFTs are, so it’s too late to transfer co-ownership after the fact.

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Rebranding and bringing NFT back to the community

After Yuga Labs acquired CryptoPunks and Meebits, the first step was to grant these two series of NFT holders the same "commercial rights" as BAYC holders. The company is working with the legal team to draft new terms for both series, handing over "commercial rights" to the community.

However, Yuga Labs doesn't intend to cram these two projects into BAYC's "club" model. BAYC remains a core project at Yuga Labs, while CryptoPunks is considered a "historical" series. Yuga Labs will be looking to add utility to CryptoPunks and Meebits, with community input being heard and considered every step of the way.

Yuga Labs hopes to bring CryptoPunks and Meebits in line with the Web3 ethos and get more developers and community creators to incorporate CryptoPunks and Meebits into their Web3 projects.

Yuga Labs will be rebranding with the entire community.

The company wrote on personal social media: "We believe that what is good for Punks is good for BAYC and other projects in the NFT field. Similarly, what is good for BAYC is good for Punks. We want to make the cake bigger, not for slices." war."

Although Yuga Labs' detailed plan for BAYC brand building is not yet clear, judging from its New Year's Outlook published on personal social media, Yuga Labs wants to build BAYC into a top brand by acting as a "temporary housekeeper", and then gradually Return to the community.

"Honestly, we didn't expect BAYC to grow so big now, we see ourselves as the interim stewards of BAYC, but now it's more and more decentralized, our goal is to become a community-owned brand with a world-class presence games, metaverses, events, and apparel. We still have to work hard to make sure the projects we hand over to the community are in a strong position."

In October last year, Yuga Labs shared a post on BAYC's official Twitter. They are working with the blockchain technology company Horizen Labs (ZEN) and the legal team to plan to launch an Ethereum-based ERC for BAYC in the first quarter of this year- 20 tokens, which can be used as a reward for NFT holders, or as a governance token for DAO, and help expand BAYC to other fields such as DeFi.

A week later, Yuga Labs announced a partnership with music manager Guy Oseary to explore opportunities in a variety of media, including film, television, music and video games. Oseary is the manager of rock band U2 and singer Madonna and co-founder of venture capital firm Sound Ventures. Sound Ventures has invested in encryption companies such as Dapper Labs and OpenSea.

In December, BAYC announced that it will cooperate with Hong Kong-based game studio Animoca Brands to build a blockchain game based on BAYC NFT. The latter has developed the metaverse game Sandbox and the racing game series Revv, which are familiar to the encryption community.

In January of this year, NFT Nick, a well-known blogger in the NFT field, stated in a video that, according to sources close to the information, BAYC was raising funds at a valuation of $5 billion. Not long after, a Financial Times source revealed that Yuga Labs was seeking funding for a multimillion-dollar stake in the company. However, BAYC officials have not yet responded to this incident.

Earlier today, BAYC's official Twitter account posted a link with the domain name "somethingisbrewing". After entering the link, the content is unknown, but users will be required to undergo KYC verification. Yuga Labs further explained that this is about working with Animoca Brands. “This has been building over the last seven months. Animoca Brands is launching Phase 1, with more to come. PS: While we don’t like KYC either, we think you’ll want to be a part of it.”

This approach has caused a lot of controversy in the encryption community. Some people expressed concern, "Why should we blindly disclose our information?"

Yat Siu, chairman of Animoca Brands, said that we use the system of Blockpass, an independent self-sovereign identity provider, and we cannot see your personal information, nor can Blockpass, which will be automatically destroyed after you verify it.

According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Participate in any illegal financial practice.

risk warning:

According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Participate in any illegal financial practice.