Non-fungible tokens (NFTs) became a huge trend in the crypto industry throughout 2021. The demand for unique, rare, and scarce tokenized items continues to shoot through the roof at the time of this writing in January 2022. Artists, celebrities, and creators are launching different NFT projects to satisfy the insatiable cravings for the new asset class. But while there are now hundreds if not thousands of NFTs flying around, with each aiming to become the next megahit, the whole NFT craze started with one project – CryptoPunks. And fun fact – it was back in 2017.
Today, CryptoPunks are some of the most popular and expensive NFT collections in the world, with some Punks selling for tens of millions of dollars. But what exactly are these crypto arts, and why are they so popular and expensive?
What Are CryptoPunks?
CryptoPunks is a well-known pioneer in the world of NFTs, as it is one of the earliest series developed on the Ethereum blockchain. Created by the New York-based software firm Larva Labs in 2017, CryptoPunks is a collection of 10,000 algorithmically generated 24×24, 8-bit-style tokenized and pixelated art images. Each CryptoPunk NFT is randomly generated from several different attributes, effectively allowing them to be unique as no two CryptoPunks are exactly alike.
Types of CryptoPunks
The CryptoPunk collection consists of a vast array of designs featuring humans, zombies, aliens, and apes. The more unique their combination of distinctive features are, the rarer the CryptoPunk NFT. There are nine aliens, 24 apes, 88 zombies, 3,840 females, and 6,039 male Punks, with each possessing some distinctive features, including mutton chops, 3D glasses, rosy cheeks, pigtails, buck teeth, lipstick, beanies, and many more.
The first 1,000 CryptoPunks were reserved for the project’s developers and are known as the Dev Punks. About eight Punks have no distinctive features, and they are often referred to as the Genesis Punks while one CryptoPunk, #8348, has the seven basic attributes and is one of the most coveted art pieces in the CryptoPunk collection.
Interestingly, the idea behind the world’s most popular NFT project started as an experiment.
The first Punks were given for free. In 2017, Matt Hall and John Watkinson, the founders of Larva Labs, developed a software program that would create thousands of different pixelated images of misfits and non-conformists. The idea was to use the program and the avatars in a smartphone app or game and had been inspired by the London Punk movement of the 1970s. But little did they know that their small project would pioneer the massive NFT industry as we know it today.
Subsequently, the collection of 10,000 CryptoPunks was launched on the Ethereum blockchain at a time when the ERC-721 token standard was not even a thing. CryptoPunks were initially issued for free, with every Ethereum wallet holder having access to the NFT collection. Shortly after, the 9,000 available Punks were snatched up, leaving the rest for the developers.
Fast forward to 2020, the NFT market exploded. Demand for digital images with ownership rights on the blockchain soared, and CryptoPunks became the most sought-after. Their values on secondary NFT marketplaces such as OpenSea shot through the roof resulting in multi-million-dollar sales, auctions at some of the top auction houses in the world, including Christie’s and Sotheby’s, and attracting several high-profile investors, including Jay-Z, Gary Vaynerchuk, and more.
As of January 2022, CryptoPunks have generated over $2.5 billion in total traded volume on OpenSea alone, with the popularity and market value still increasing as the NFT space reaches mainstream users. But why are these tokenized images so popular?
CryptoPunks: The Most Ancient NFT Series
When there’s high demand for a commodity with limited supply, the price will jump sky-high.
And that’s the case with the revered CryptoPunks. In fact, the NFT is so popular that Visa had to join the craze by purchasing a Punk for $160,000. But the big question is – what really drives the demand for something critics would call a bunch of pixelated images? While there are several reasons for the increasing demand for CryptoPunks, two factors stand outage and scarcity.
The CryptoPunk collection is revered as one of the oldest NFT projects around. An aged NFT, such as CryptoPunk, is valued as much as a famous old painting like Picasso’s “Femme nue couchée au collier” of 1932 that was purchased and tokenized by TRON’s Justin Sun. So, the age of CryptoPunks on the blockchain adds to their desirability. Most investors simply buy Punks to get their hands on one of the oldest NFT artworks still around.
Scarcity: Jay-Z, Serena Williams, and More
NFTs, in general, derive much of their value and popularity from the rarity and scarcity of tokens. CryptoPunks are also not left out. The limited supply of CryptoPunks available for purchase adds to the thrill and pushes demand to the moon and beyond. The rarity of most CryptoPunks makes them highly coveted.
The plain-looking Punks are valued less than the rare Punks. For instance, alien CryptoPunks are among the rarest in the entire collection. As a result, they are super expensive. Other demand drivers for the NFT collection include its popularity among high-profile individuals, including Jay-Z, Serena Williams, and many more. The images have been used as profile pictures on social platforms, which really clicked with the crypto community, further boosting the demand for them.
How to Buy a CryptoPunk NFT?
As with other non-fungible tokens, you can view all of the available CryptoPunks in several NFT marketplaces, including on OpenSea, which is the biggest secondary NFT marketplace. However, investors can only buy CryptoPunk through the Larva Labs website. There, the firm provides several tools needed to help buyers select which avatar they wish to buy, including a tracker that shows all of the listed Punks and their various prices.
First, you will need to log in with an Ethereum-based wallet, MetaMask preferably. Once you have gained access to the platform and are granted the necessary permissions, you can bid on, buy, and sell CryptoPunks using Larva Labs’ official website. When you bid on, buy, and sell the NFTs on the marketplace, you can observe the status of each CryptoPunk NFT based on the color of their background.
A blue background implies that a particular CryptoPunk is not for sale and does not have any open bids at this time. A red background denotes that the owner of the Punk has placed it for sale, and a purple background shows that there is an active bid for the selected CryptoPunk NFT.
The Future of CryptoPunks
CryptoPunks have attracted several high-profile investors into the NFT space and are leading the way in the crypto art movement. In just four years, the price of one Punk has gone from being worth virtually $0 to several million dollars.
While there is no way to know if the current demand for CryptoPunks and NFTs, in general, will continue in years to come, one thing is certain — they will always be an integral part of the NFT world as the most ancient series, several years before the Bored Apes Yacht Club and other popular NFTs. That said, Larva Labs is constantly exploring new ways to improve the project even further since it’s very unlikely that it will issue more CryptoPunks as their limited supply is one of the critical drivers of their popularity.
The software firm revealed that it had put all of the CryptoPunk attributes and images on-chain on the Ethereum blockchain, which will help to secure their longevity and the durability of CryptoPunks investments.