Last month, Larva Labs announced the auction of a sample of nine Punks from the CryptoPunks project at Christie’s. Today, the auction house announced that the nonfungible tokens (NFTs) were sold for almost $17 million.
The CryptoPunks project is a landmark in CryptoArt. It started in 2017 when Larva Labs’ Matt Hall and John Watkinson software generated 10,000 “Punks” – pixel characters with very distinct physical features – that could be traded on the CryptoPunks platform. At the time, there were already digital artists with a significant following and breaking through the barriers of traditional art displays. However, the CryptoPunks project went a step further by launching the computer-generated pixelart as a tradable NFT.
While the market for digital collectibles today is fairly competitive, Punks are considered as the first of its kind. They challenged the concept of ownership early on, as all 10,000 Punks are accessible for viewing on Larva Labs website, but at any given moment, there is only one owner. Transaction history and proof of ownership are encoded on the Ethereum blockchain.
Initially, the Punks were available for free on the platform, with the owners claiming 1000 for themselves. It took a while for a movement to form around the concept and for NFT collectors to take some interest. Of the $323 million in transactions to date, 98% in value occurred since the start of the year, according to CryptoSlam. In terms of the number of trades, 43% have happened this year.
One significant feature of the CryptoPunks project is that it acquired a loyal community of collectors during the last three or four years. Punks distinctive features can be grouped into manageable acquisitions, and while it is inconceivable that a single collector will own the 10,000 punks, it is possible to own Punks 200 to 210, or even all pixels wearing high boots. As such, it is a very collectible product.
Punks went from selling for a couple pennies to nine of them being auctioned for $17 million at a world-renowned auction house. If the same Punks were to be auctioned one year ago, it is unlikely that the price would have gone beyond a few thousand dollars. Average prices started to rise above $1,000 in August last year, reaching over $100,000 this month.
If the prices keep going in the same direction, only a select number of collectors will be able to participate in transactions. For years, Punks redefined the value of ownership and highlighted what it meant to be a collector. Now, the pixels might take a turn towards becoming investment options for wealthy funds to diversify their portfolio.
Meanwhile, digital art is becoming more mainstream. Anonymous digital artist PAK auctioned some of his creations at Sotheby’s, and the Winklevoss twins’ owned Gemini Trust launched Nifty Marketplace for commercializing digital art and collectibles. Among others, the platform is being used by Playboy.