CryptoPunks are iconic in the crypto world, and the project has spawned countless imitators as it popularized the tokenized ones NFT profile pictures. But with new owner in the form Bored Ape Yacht Club creator Yuga Labs, we’re starting to see how the new manager plans to expand the utility Ethereum NFTs and push the brand forward.
Yuga Labs acquired CryptoPunks and Meebits properties of the original creator Larva Labs in March, along with a large amount of NFTs from both collections. In June, the firm hired Noah Davis, who previously led digital sales at auction house Christie’s and sold Beeple’s $69 million NFTto oversee the future of CryptoPunks as a brand leader.
Davis Customs Decrypt that the opportunity was initially presented to him by Guy Oseary, an experienced music industry manager and former record label executive. presented by Yuga Labs. Oseary was hesitant about the position at first, but convinced Davis that it would be a job worth taking. When Davis heard all the details, he agreed.
“This is an opportunity I couldn’t turn down,” Davis said. “It’s my dream job.”
He spent the last few weeks meeting with the owners of CryptoPunks to discuss their feelings about the collection, which has generated dozens of NFT sales of at least a million dollars a piece—i over $2.3 billion worth trading to date, despite being free to mint at launch in 2017.
In addition to the acquisition in March, Yuga Labs also announced that it Web3 the startup will grant full commercialization rights to CryptoPunks owners, allowing them to create projects and derivative products based on their artwork. This is what Yuga Labs already offers to Bored Ape Yacht Club owners, and will extend the rights to Meebits owners as well.
The owners of CryptoPunks will be granted those rights on August 15 when the IP licensing agreement is announced. The end result is ultimately the same as Bored Apes, Davis said, but there’s a key difference: while Bored Apes’ commercial license short and sweetCryptoPunks and Meebits license will probably be much longer.
While Yuga is not directly involved in mutual cooperation @dt_chain, @TiffanyAndCo & @alexarnault, it’s a great example of what Punks owners will be able to do with the IP licensing agreement, which we intend to announce on 8/15. See 🧵 for license details. https://t.co/clS7XyfmT7
— CryptoPunks (@cryptopunksnfts) July 31, 2022
“We wanted to make sure that with the license we’re giving Punks we’re expanding into some of these newly defined gray areas,” Davis said, “giving more protection where we can and more explicitly describing what the license does and doesn’t do. ”
Several NFT projects have struggled to navigate commercialization rights grants in the past year, a process Davis describes as “a whirlwind shitshow for everyone.” He said there are key additions to the CryptoPunks license that aren’t present in the Bored Ape Yacht Club license—which, Davis clarified, won’t be updated or expanded to match the new Punks and Meebits terms.
As with Bored Apes, licensing rights are tied to each individual NFT. But one of the “grey areas” that the CryptoPunks license describes is that if a Punks owner sells their NFT, he or she can “continue to use and profit from what they have already created and released,” per tweet from the official CryptoPunks Twitter account.
Asked for more details on how that model works, a Yuga Labs representative said Decrypt that it “refers to the full license when it is announced on August 15.” Otherwise, Davis said the primary limitations of the license are that Punks cannot be used to create hateful content or for illegal purposes. Otherwise, anything else is fair game for owners to create and profit from.
Davis said that while Bored Apes’ short license is “super punk rock,” he believes it’s legally “better to be exhaustive” as Yuga Labs creates new commercial licenses for its recently acquired properties.
Luxury jewelry brand Tiffany & Co’s the recent decline of NFTiff is an example of what is possible with the new license. That launch allowed CryptoPunks owners to purchase one of 250 Ethereum NFTs for 30 ETH each (over $50,000 at launch) and then exchange it for a physical pendant based on the owner’s CryptoPunk image.
It wasn’t an official Yuga Labs collaboration, the CryptoPunks account tweeted, but an initiative between Tiffany and Web3 infrastructure provider Chain – the latter company’s CEO holds the record for the most expensive punk purchase. Davis described the decline of Tiffany as a “great example” of how the commercial rights of Punks can be used for new projects.
The grant of commercialization rights to holders finally addresses one of the main complaints among holders, as Larva Labs previously considered whether or not to grant such rights. One prominent carrier, alias 4156, at the end sold his CryptoPunk (#4156) in December 2021 for over $10 million worth of ETH following an intellectual property rights dispute.
‘CryptoPunks as Art’
Solving that rumble is one part of Yuga’s CryptoPunks plan. The second, Davis said, is to provide opportunities for the owner community to better connect, addressing another common complaint that Larva Labs has been too neglectful in the past.
“Community is utility,” Davis asserted, though he acknowledged that “community” and “utility” are overused terms in the NFT space to the point of parody. However, he said he believes there is some truth to the statement, and finding new ways to connect and engage wearers is one of his top priorities.
“It’s pretty clear they’re CryptoPunks [holders]generally speaking, they are some of the most talented builders, storytellers and creative people on the Web3,” said Davis Decrypt. “Strengthening the community is the most important thing for most punks.”
However, it remains to be seen how Yuga Labs plans to turn CryptoPunks into a revenue-generating business. CryptoPunks have 0% royalties, which means Yuga currently does not get a cut of secondary sales.
South recently changed Meebits royalties from 0% to 5% to fund future initiatives – a move that drew mixed reactions from the community – but there’s no immediate indication that the same will happen for Punks.
“I don’t think it’s an idea for now to focus on turning CryptoPunks into another golden goose — because there are already several golden geese for Yuga,” Davis said. “In the long term, of course, it will be part of the agenda, and perhaps the internal roadmap.”
Yuga’s purchase of CryptoPunks IP also raises questions about how it will integrate into the startup’s larger Web3 ambitions, including the upcoming Ethereum metaverse game, Otherside. We’ve already seen a punk in a teaser trailer for the game, but Davis said they’re grappling with questions about how punks fit into the Bored Ape-centric world.
“Punks were coined in 2017, created way back in crypto time – decades in crypto time,” he said. How they ended up being featured in Otherside remains an “open question,” he added, saying he “aggregates the vibes” of the Punks owners he talks to.
There is significant cultural influence on CryptoPunks among crypto enthusiasts, which could have other benefits for Yuga beyond royalty trading and revenue generation initiatives. CryptoPunks are not just some of them the most valuable NFT ever soldbut they are increasingly well known and have had a huge impact in the NFT space.
“How cool is it to own Web3 cave paintings?” Davis told CryptoPunks. “That’s an incredible impact, in itself.”
That ethos, along with Davis’ own experience, suggests one path Yuga Labs intends to pursue in the future: presenting CryptoPunks as an important piece of modern art.
“For me, the focus is to really make sure people see CryptoPunks as art,” he explained, “and establish that legacy as a work of art as well as an incredible use case for this new irreplaceable token technology.”
CryptoPunks have been auctioned before and to side sumsand Davis himself helped sell a pack of nine CryptoPunks for nearly $17 million worth ETH at Christie’s in May 2021. But for Davis and Yuga Labs, the goal is less to increase sales and more to ensure wider recognition for punks and their influence.
“You don’t have a lot of institutional recognition for CryptoPunks, you see punks in museum collections and on display in museums,” he said. “Those opportunities to connect with the public are opportunities for decentralization and Web3 in general.”
“Definitely, focusing on institutional impact will be important to me,” Davis added.