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    What are CryptoPunks? Should You Buy CryptoPunks NFT?

    In Feb 2022, a 24×24 pixel art image was sold for 8,000 ETH (about $23.7 million at that time) to CEO of Deepak Thaliyal, a blockchain infrastructure firm. That pixel image is one of NFTs in CryptoPunks collection which contributed to the NFT craze with many NFTs selling for record high prices.

    What are CryptoPunks?

    CryptoPunks is a NFT collection (Non-Fungible Tokens) launched on the Ethereum blockchain. This collection was first introduced by Larva labs in 2017 and later acquired by Yuga Labs, the company behind Bored Ape Yacht Club in 2022. Larva Labs was one of the pioneers using ERC-721 standard to issue NFTs.

    There are a total of 10,000 unique characters, appearing in 24×24 pixel art images. CryptoPunks are issued and stored on Ethereum and no two are exactly alike. Originally, they could be claimed for free and then traded on blockchain marketplaces. Each CryptoPunk has different attributes, rarity, and was originally generated by an algorithm designed by Larva Labs. Therefore, each CryptoPunk NFT is unique.

    Some reports on CryptoPunks updated to Sep 13, 2022:

    • Lowest price punk: 61.95 ETH (~105.997 USD)
    • Number of transactions in the past 12 months: 4,189
    • Total Sales Volume: 396,500 ETH (~$1.13 billion)

    These figures show that CryptoPunks get a lot of attention from collectors. One of the biggest downsides of NFTs is low liquidity, meaning that there are not many people willing to bid on them. However, that may not be true for CryptoPunks as the total value of sales on a weekly basis is around 1,800 ETH (about 3 million USD).

    CryptoPunks – The origin of PFP NFTs

    CryptoPunks was initially launched by Larva Labs’ two-man team for testing purposes. Then, the PFP (Profile Picture) craze drove the NFT market as NFT collections like BAYC started to attract the attention of investors. The NFT market started to mature in 2021 while it was barely known in 2017-2018.

    Other than being PFPs, CryptoPunks have entered the physical realm but the community has also raised concern about NFTs presented as physical arts because it would lose the exclusivity or uniqueness of NFTs.

    Classification and Attributes

    Punk types

    CryptoPunks are divided into 5 Punk types: Alien, Ape, Zombie, Female, and Male. The rarer the punk type, the more valuable it is, of course. Alien and Ape Punks are the most expensive ones, which can be worth thousands of ETH as they are available in small quantities.

    CryptoPunks attributes

    Each CryptoPunk has specific attributes. The rarest attributes are Beanie (44), Choker (48), and Pilot Helmet (54). The cheapest bid for CryptoPunks with Beanie at the time of writing is around 420 ETHs, which is more expensive than those with regular attributes.

    Attribute counts

    As mentioned above, 10,000 CryptoPunk NFTs are uniquely minted and no two CryptoPunks are exactly alike in terms of attributes.  Let’s see how many attributes a CryptoPunk can have:

    Notably, there are only 8 CryptoPunk with no attributes and one CryptoPunk with 7 attributes. They are not always available for sale and the highest bid price for CryptoPunks with all 7 attributes is 696.69 ETH. CryptoPunks with 3 attributes take up the most of the collection. Among 10,000 CryptoPunks, there are up to 4501 with 3 attributes, accounting for about 45% so these punks are currently the cheapest. Obviously, if someone owns CryptoPunks with no or all attributes, their collection will be worth it.

    Top CryptoPunk NFT Sales

    Here are the 4 highest value CryptoPunk transactions:

    • CryptoPunk #5822 – 8,000 ETH ($23.7 million) on Feb. 2022
    • CryptoPunk #3100 – 4,200 ETH ($7.58 million) on March 2021
    • CryptoPunk #7804 – 4,200 ETH ($7.57 million) on March 2021
    • CryptoPunk #5577 – 2,500 ETH ($7.7 million) on Feb. 2022

    Secret behind the success of CryptoPunks

    Larva Labs

    One of the key factors determining the success of an NFT project is the development team. The CryptoPunk development team, Larva Labs, was founded by two members, Matt and John. CryptoPunks was launched as an experiment with the new ERC-721 token standard so 9 out of 10 of the CryptoPunk collection was completely free, two founders kept the rest.

    Besides CryptoPunks, the development team also released two new collections, MeeBits and Autoglyphs. Meebits launched in May 2021 also brought success to Larva Labs, although it was originally created to be an alternative to CryptoPunks. Larva Labs is definitely a talented team which was later acquired by Yuga Labs, the company behind Bored Ape Yacht Club. It is possible that Yuga Labs also plans to issue its own token for the CryptoPunks collection.

    CryptoPunks – Pixels-style avatars

    The collection has only 10,000 NFTs and cannot mint any additional NFTs. Moreover, each CryptoPunk is unique, meaning that each NFT has unique values ​​and attributes. Each of these special attributes is combined with a simple yet effective pixel graphic style that users can use to represent their personality. For this reason, CryptoPunks have been used by many users to set avatars on social media platforms.

    Macro outlook

    The NFT market could not have such remarkable success without the backing of the macro outlook. Hundreds of millions of dollars have been poured into the crypto market during the Covid-19 era. This was also the period when GameFi became a hot trend, helping to increase the coverage of NFTs.

    According to Google Trends, NFT was the most searched keyword in 2021 but it gradually decreased in 2022. Although in 2022, there will still be huge NFT transactions worth millions of dollars, investors have started to be more cautious and hesitant to buy NFT.

    How to own CryptoPunk NFT?

    CryptoPunks are NFTs issued on Ethereum, so they are transferable between Ethereum crypto wallets. At first, users could claim free CryptoPunks when Larva Labs released the collection, but now each CryptoPunk can cost from tens to thousands of ETH.

    At the moment, OpenSea is the most prominent NFT marketplace that supports users to buy, sell and mint NFTs on Ethereum, also the NFT marketplace with the highest trading volume in the market. For users wishing to buy CryptoPunk NFTs, OpenSea is one of the top choices. However, be careful that fake collections are also listed on this marketplace. In case you don’t like OpenSea, Larva Labs’s official website is your choice, where CryptoPunks are listed for sale by their owners.

    No matter which platform you use to trade NFTs, it’s always important to watch out for phishing scams or fake websites. Always make sure that you are buying NFTs from the official website and NFTs you bought are actually in the CryptoPunks collection.

    Should you buy CryptoPunk NFTs?

    CryptoPunks is currently one of the most valuable NFT collections in the crypto market. In terms of total trading volume, CryptoPunks ranks 3rd, behind only Axie Infinity (GameFi) and Bored Ape Yacht Club (BAYC).

    Should you buy CryptoPunk NFTs? Let’s consider these things:

    10,000 CryptoPunks: The collection has a total supply of 10,000 NFTs, where the price of these NFTs is divided by the rarity of the attribute. Investors can rely on that to determine the desired price and rarity.

    Limited use cases: Currently, investors can use CryptoPunks as a profile picture or as collateral to borrow crypto assets. However, NFTs are extremely volatile assets because of liquidity issues while collateral can certainly be liquidated as NFT prices can fluctuate rapidly.

    NFT Market Sentiment: As Bitcoin price falls, many NFT flippers can still earn profit. Amidst bear crypto market, investors can consider catching the bottom “blue chip” NFT collections and waiting until the market recovers, they may bring double profits.

    In conclusion

    CryptoPunks is undoubtedly one of the most reputable NFT collections in the crypto space. Five years after its launch, CryptoPunks has been making a strong impact on the NFT market. Having been acquired by Yuga Labs, we can expect CryptoPunks to create more use cases or even tokens like how Yuga Labs used to develop BAYC.

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