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CryptoPunks

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CryptoPunks
Six examples of the 10,000 randomly generated CryptoPunks
Developer(s)Larva Labs
Designer(s)John Watkinson & Matt Hall
Platform(s)Ethereum
ReleaseJune 2017
Genre(s)Collectable

CryptoPunks is a non-fungible token (NFT) collection on the Ethereum blockchain. The project was launched in June 2017 by the Larva Labs studio,[1] a two-person team consisting of Canadian software developers Matt Hall and John Watkinson. The experimental project was inspired by the London punk scenes, the cyberpunk movement[2] and electronic music artists Daft Punk. The crypto art blockchain project was an inspiration for the ERC-721 standard for NFTs and the modern crypto art movement, which has since become a part of the cryptocurrency and decentralized finance ecosystems on multiple blockchains.

CryptoPunks are commonly credited with starting the NFT craze of 2021, along with other early projects including CryptoKitties, Bored Ape Yacht Club and the sale of Beeple's Everydays: The First 5000 Days. There are 10,000 CryptoPunk tokens.[3][4][5] Today, due to their rarity and exclusivity, they are often used as a status symbol in cryptocurrency communities such as Twitter[citation needed], as well as fetching higher prices on the open market and making their way to auction houses like Christie's.[6]

Concept

There are 10,000 unique CryptoPunks (6,039 male and 3,840 female), all of which are made digitally scarce through the use of blockchain technology. Each one was algorithmically generated through computer code and thus no two characters are exactly alike, with some traits being more rare than others. They were originally released for free and could be claimed by anyone with an Ethereum wallet. The only cost to claim a CryptoPunk during their initial release were Ethereum (ETH) "gas fees", which at the time, were negligible due to little use of both the Ethereum blockchain and little knowledge of the project as well.[7]


History

In the original Cryptopunks smart contract, there was an error which caused ETH to be allocated to the buyer instead of the seller when a purchase was made. In other words, a buyer was immediately refunded for their purchase leaving the seller empty handed. This error was discovered almost immediately and two weeks later a new contract was issued by LarvaLabs and new (V2) Cryptopunks were airdropped to people who had claimed the flawed (V1) Cryptopunks. V1 Cryptopunks were untradable until 2022 when a wrapper was deployed, bringing the V1 Crypopunks up to current ERC-721 standards and making them safely tradable. In February 2022 LarvaLabs issued a DMCA notice to try and legally prevent the trading of V1 Cryptopunks causing the collection to be delisted from OpenSea. [8]

Certain traits and types of characters are rarer than others. While many projects of more recent development often sample through hundreds of possible traits, the CryptoPunks project was not as complex. Most of the 10,000 total punks are humans, but there are also three special types: Zombie (88), Ape (24) and Alien (9).[9][10] Aside from character type, there were a potential of 87 additional attributes.

Controversy

In October 2021 a single NFT transaction was made for 124,457 Ether ($532 million USD at the time of the sale) regarding CryptoPunk #9998, much higher than all previous NFT sales, leading to speculation on social media that this could have been some kind of scam, security exploit or money laundering. Larva Labs said that the purchase was made with a flash loan where the NFT's owner bought the item from themselves with borrowed money, taking out and repaying the loan within a single blockchain transaction,[11] subsequently invalidating the sale from the asset's historic and from all the relative statistics.[12]


Sotheby's 104 CryptoPunks auction

In early 2022, a Sotheby's Auction for a single lot of 104 CryptoPunks was announced.[13] The auction took place on 23th February 2022, but its seller (0x650d) changed their mind 23 minutes after the auction began, and decided to withdraw the auction to keep the whole lot.[14]

See also

References

  1. ^ Larva Labs
  2. ^ "10 things to know about CryptoPunks, the original NFTS | Christie's".
  3. ^ "Will Cryptocurrencies Be the Art Market's Next Big Thing?". The New York Times. 2019-04-16. Archived from the original on 2020-12-15. Retrieved 2021-01-08.
  4. ^ "CryptoPunks | Fortune NFTy 50". Fortune. Retrieved 2021-08-05.
  5. ^ "10 things to know about CryptoPunks, the original NFTs | Christie's". www.christies.com. Retrieved 2021-08-05.
  6. ^ "CryptoPunks NFT bundle goes for $17 million in Christie's auction". TechCrunch. Retrieved 2021-10-13.
  7. ^ Abbruzzese, Jason (2017-06-16). "This ethereum-based project could change how we think about digital art". Mashable. Retrieved 2021-10-13.
  8. ^ Sun, Zhiyuan (2021-10-27). "OpenSea once again delists CryptoPunks v1 as legal battle heats up". CoinTelegraph. Retrieved 2022-02-08.
  9. ^ Cornish, Chloe (June 6, 2018). "CryptoKitties, CryptoPunks and the birth of a cottage industry". Financial Times. Archived from the original on January 21, 2021. Retrieved January 26, 2021.
  10. ^ "How blockchain technology could revolutionize the art market". PBS NewsHour. September 11, 2019. Archived from the original on January 26, 2021. Retrieved January 26, 2021.
  11. ^ Islam, Foyjul (29 October 2021). "A CryptoPunks NFT sells for an eye-popping $532 million - but the purchase isn't all it seems". Business Insider. Archived from the original on 2021-10-29.
  12. ^ "CryptoPunks: Details for Punk #9998". LarvaLabs.{{cite web}}: CS1 maint: url-status (link)
  13. ^ "Single Lot of 104 CryptoPunks Could Net More Than $20 Million". barrons.com.
  14. ^ "Sotheby's Withdraws Sale of 104 CryptoPunks at Seller's Request". barrons.com.
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