Some say that the CryptoPunks project marked the beginning of the CryptoArt movement. Whether CryptoPunks was definitively the first nonfungible token (NFT) project on Ethereum is unclear. However, the project is the one remembered as such. It was started three years ago by software developers Matt Hall and John Watkinson at New York-based Larva Labs. The developers’ software generated 10,000 Punks – strange looking pixel characters with distinct features – that could be traded on the CryptoPunks NFT platform.
The breakthrough aspect of CryptoPunks is how it challenged the concept of owning digital art. In 2017, there were already digital artists with a significant following, including Beeple, who started his 5000-day project in 2013. However, Larva Labs went a step further and launched the collectibles as tradable NFTs.
All CryptoPunks can be viewed by anyone on the Larva Labs website, and there is even a whole page dedicated to each of them with details on their features. However, there is only one owner of each punk. Ownership and history of transactions are encoded on the Ethereum blockchain. The system may have helped inspire the ERC-721 standard for NFTs, which set the stage for the expansion of the NFT market. Months after CryptoPunks were unveiled, the CryptoKitties game was launched by the NBA Top Shot developer Dapper Labs, which defined the ERC-721 standard.
Punks were initially claimed for free on the CryptoPunks platform, with the developers claiming 1000 for themselves. It took a while to take off, but eventually the Punks were selling for thousands of dollars each. In the last year, 8000 sales have been recorded with an average price of 15.45 ether ($30,412) each. Total sales amount to the equivalent of a staggering $251 million, with 98% being conducted in the last few months.
“Obviously this is a very speculative market… but it’s almost more honest than the stock market,” Max Orgeldinger, a Punks’ owner, told TechCrunch. “Kudos to Elon Musk — and I’m a big Tesla fan — but there are no fundamentals that support that stock price. It’s the same when you look at GameStop. With the whole NFT community, it’s almost more honest because nobody’s getting tricked into thinking there’s some very complicated math that no one can figure out. This is just people making up prices and if you want to pay it, that’s the price and if you don’t want to pay it, that’s not the price.”
Techcrunch notes that the sudden enthusiasm for Punks is correlated with the rise in interest in Dapper Labs’ NBA Top Shot, the resurgence of the physical collectibles markets, and the increase in value of cryptocurrencies. These factors, Techchrunch concludes, have made investors more willing to bet on digital goods.
The auction at Christie’s will be for nine Punks currently owned by the creators. The collection is meant to highlight some of the best caricature-like features of the digital characters, such as crazy hair, earrings, and a mohawk. All Punks auctioned have a sub-1000 series number, which is perceived as more valuable, with each serial number completely unique. Christie’s will accept ether cryptocurrency as payment for the bids.
Meanwhile, anything-NFTs seems to be the topic of the moment in the crypto industry. Playboy will soon begin auctioning NFTs on Nifty Gateway, luxury fashion brands are exploring ways to implement 3D clothing in their offerings, TIME magazine auctioned three covers as NFTs, and even Tom Brady will launch his very own NFT marketplace.