Built off the Ethereum network, CryptoPunks are made by Larva Labs and are a collection of NFTs that are currently selling for remarkably high prices. Recently, a CryptoPunk made it to an internationally recognized art museum in Miami, Florida!
CryptoPunks are non-fungible tokens represented by pixelated characters that are stored on the ETH blockchain. There are a limited supply of 10,000 24×24 pixel art collectables which are generated by an algorithm. CryptoPunks are created with different scarcity levels and include people, apes, zombies, and the occasional alien.
NFTs or non-fungible tokens are pieces of digital media. NFTs are classified as a digital asset and are stored on the blockchain; consequently, this allows the owner to claim ownership and essentially provide a digital receipt. The NFTexplained.info team has created an in-depth article explaining exactly what NFTs are and how they work; if you would like to become an NFT expert, the article can be found here.
In this article, NFTexplained.info will break down how CryptoPunks were created, the process for purchasing a CryptoPunk, the next line of CryptoPunks, explain what Meebits are, go into detail about the market trends of CryptoPunks, cover the average sale price, analyze the number of punks sold, analyze the overall price trend for CryptoPunks, help you understand the market cap, explain if they are a good investment, and we will end our article by explaining some of the most famous CryptoPunk owners and who they are.
How Are CryptoPunks Created?
CryptoPunks were one of the very first entrants to the modern crypto art space. Many think CryptoPunks were the start of the NFT art craze and the source for much of the hype. They have been auctioned off at large fine art auction houses such as Sotheby’s and Christies.
Larva Labs created a software program that generated 10,000, 24×24, uniquely pixelated characters; each of the characters are unique and have distinct features. The algorithm that created the punks made a extremely limited number of zombies, aliens, and ape punks which are worth more.
Larva Labs stated, “We ran the generator hundreds of times, reviewed the results, and made adjustments. Then with little fanfare, we ran it one last time, linked it to the Ethereum smart contract that we deployed, after which the CryptoPunks were set in stone.”
At the time of their minting, randomly generating NFTs was something that few had done, with the notable exception of CryptoKitties which used a genetic algorithm to create new kitties. Since CryptoPunks were the first NFTs encountered by many, people considered them as a challenge to the prevailing ideas of art display and ownership. The project was originally released as a test and the owners didn’t expect them to start a revolution within the art world.
As each CryptoPunk has unique characteristics, verifiable ownership as well as proof of previous ownership, many have found the project to be an interesting way to use the blockchain. CryptoPunks inspired numerous projects, resulting in more and more people understanding how NFTs work and why they are a valuable digital asset.
How Do I Purchase A CryptoPunk?
For those looking to purchase one of the 10,000 CryptoPunks, do not worry as the process is quite simple. Few steps are necessary and transactions are completed fairly quickly.
The process involves three simple steps; firstly, users must establish a digital wallet that interacts with the blockchain. Secondly, users need ETH in their wallet to fund the transaction. Thirdly, buyers need to purchase the item and pay the transaction fee. These NFTs can only be purchased in the secondary market.
The first step in the process is creating a digital wallet that is able to interact with the Ethereum blockchain. The most commonly used digital wallet is MetaMask because of its simple user interface that doesn’t take much time to set up. This process is quite simple and the NFTexplained.info team has already published an article explaining precisely what the MetaMask wallet is, how it works, and a step by step guide for users. That article can be found here.
For the purchasing of a CryptoPunk, Ethereum is required in order to complete the transaction. On MetaMask users have the option to purchase ETH using a debit card or can exchange a variety of cryptocurrencies for ETH. It is important to note that a ‘gas fee’ must be paid for or this transaction won’t complete as a miner needs to verify the transaction and need to be rewarded for their work. A lot of energy is required; miners don’t work for free and the whole process is energy intensive. Users also have the option to purchase ETH from Coinbase as long as the address of the digital wallet is connected, which is also a very simple process.
If you would like to learn how much energy an NFT consumes; NFTexplained.info has created the perfect article for you. We will breakdown to proof of work and proof of stake consensus algorithms and explain how much energy an NFT built on the Ethereum blockchain uses.
Once the MataMask wallet is connected and enough ETH is in the wallet to purchase and pay for the minting (gas fee) of the NFT, users have the option to purchase and bid. Users also have the option to sell their own NFTs or resell any NFT they have already purchased.
If you would like to learn about the largest NFT marketplace, the NFTexplained.info team has created a complete tutorial on OpenSea and we have broken down the marketplace in a way that is easy to understand.
While in the process, you may find more NFTs that are intriguing to you and provide the possibility to make a profit by reselling them. Afterall, CryptoPunks were given away for free as long as users paid the transaction fee which was roughly US 12 cents at the time. Since more users are transacting on the Ethereum network, gas fees tend to be much, much higher at this point in time.
The procedure of purchasing an NFT is done through the use of smart contracts; this is computer programming and is what makes the NFT process possible. Smart contracts allow the wallet to interact with the blockchain. Happily, the NFTexplained.info team has created a smart contract article to help you understand exactly how it works and to provide you with some examples.
What Are The Next CryptoPunks? What Are Meebits?
While more and more people are attempting to create a series of collectible NFTs, the NFTexplained.info team thinks that few will be successful. The creators who are unsuccessful often have little awareness of their projects, resulting in little market demand.
Larva Labs, the creators of Cryptopunks recently created a new line of NFTs known as Meebits. Meebits are 20,000 unique 3D avatars; they are intended to be used in the metaverse. Each character is tradeable on the Ethereum blockchain and was created from a software program that randomly generated features.
In the case of Meebits, a strong market awareness had been created as people observed the extreme price increase that the CryptoPunks line enjoyed. The Larva Labs team has stated that Meebits are intended to be deployed as avatars in the metaverse (linked virtual worlds). This would mean that Meebits are envisioned to be used in games such as Decentraland, where non-fungible tokens are easily deployed. If you would like to read our in depth article explaining what Decentraland is and how it works, that can be found here.
The process for selling the 3D NFT characters was done primarily through a Dutch auction. In this auction users were paying roughly 2.5 ETH to mint a Meebit; purchasers were unaware of the characteristics since they were randomly generated at the time of purchase. The algorithm would generate a Meebit for the users with luckier users receiving a Meebit with scarce characteristics. Meebits that resemble an animal or skeleton are currently being sold for much higher prices. At the time of sale the minting for a Meebit was roughly US $8,500.
Owners who had a CryptoPunk in their collection had the first opportunity to purchase a Meebit; this is a form of utility punk owner were rewarded with. A total of roughly 11,000 Meebits went to these users. However, some owners may have elected not to pay the high price to mint a Meebit. The remainder were sold in a Dutch auction and despite the high minting fee, all Meebits were sold out within 8 hours.
Brand awareness was the key characteristic that made this line of NFTs successful. Numerous people within the NFT space who had large audiences were excited about getting their hands on one. The uniqueness and 3D characteristics that each Meebit possesses also contributed to the successful drop.
NFTexplained.info will go into detail about the market trends of CryptoPunks; we will cover the average sale price, analyze the number of punks sold, analyze the overall price trend for these NFTs, and help you understand the market cap.
These digital assets have made it into widely viewed publications on numerous occasions for an array of reasons – one being the high price the punks have sold for.
The 10,000 CryptoPunks were originally released for free and users only had to pay the minting fee (roughly US 12 cents). As a general statement, these NFTs are now quite valuable; the average sale price for a punk over the last year has been US $43,106.
Punks are increasingly being sold for higher prices and many popular influencers have posted about their collections. Recently CryptoPunk #7804 was sold for roughly US $6 million!
CryptoPunks’ Sales Market Trends
CryptoPunks have consistently been available for purchase on NFT marketplaces such as OpenSea. Some are auctioned off while others have the ability to be bought at the set price the seller has listed.
From the start of June 2017, when CryptoPunks were created to the end of 2019, these digital collectables saw roughly 50 – 200 unit sales per 30 day time period. At the beginning of 2020, the NFTs saw huge spikes in the number of sales, reaching as high as 2,500 sales in 30 days and averaging roughly 880 sales per 30 days.
These NFTs have seen huge spikes in the number of sales and estimating the trend of sales is a challenging process. As a general statement, anyone who had purchased a CryptoPunk before the start of 2021 had the potential to resell the NFT for an enormous profit.
CryptoPunks Price Market Trends
As with any fluid marketplace, the NFT market works primarily on supply and demand economics. Items with high demand and limited quantity will sell for extremely high prices. In the case of CryptoPunks’ the amount of punks never changed; however, the number of people interested and aware of the project greatly increased from 2017 when they were first generated.
From the beginning till around the end of 2020, CryptoPunks were seeing turnover of $15,000 every 30 days, however the gross sales varied greatly depending on the time period. At the start of 2021, prices increased tremendously to roughly $45 million in each 30 day period.
CryptoPunks continue to gain popularity and awareness especially among the crypto community. It is one of the first NFT projects that also received a lot of publicity outside of the NFT space because of the number of influential people and publications talking about the project.
CryptoPunks Market Cap
Market cap is a way to understand the relative size of something such as a company or a line of NFTs. It helps one understand the overall value of a business or NFT lines’ worth in the open market. It is a way for investors to figure out how much people are willing to pay.
CryptoPunks have a market cap of roughly US $1.95 billion. To help understand this metric we will look at the market cap for other companies. Apple has a market cap of $2.335 trillion. Similar to CryptoPunks, Aaron’s, a consumer discretionary company, has roughly the same market cap as CryptoPunks.
Aaron’s is a company that primarily focuses on lease-to-own for products such as electronics, appliances, computers, and furniture. The brand sells products from widely known companies such as HP Inc, Samsung Electronics, Woodhaven, Beautyrest, and more. For a company of that scale to have the same market cap of CryptoPunks shows that people consider these NFTs to be valuable, digital collectables.
Aside from market cap, additional metrics used in the NFT space are volume traded and floor price. Both of these metrics are at exorbitant amounts which is a testimony to the strength blue chip NFT projects have.
Now that you have an understanding of the market trends that these NFTs have, the NFTexplained.info team will provide an analysis examining if these digital assets are worth purchasing.
Is Purchasing A Meebit Or CryptoPunk A Good Investment? Is It Worth It?
NFTs are highly speculative investments and the vast majority of these digital assets don’t retain their value because of low demand. People are willing to pay high prices for the ability to say they own something and this is one characteristic of NFTs that is important to appreciate.
As a general statement, NFTs are a worthy investment if there is a high demand for the specific NFT or line of NFTs. Since Larva Labs is a highly regarded company within the NFT space, purchasing a CryptoPunk or Meebit at the initial sale price could lead to material profits should buyers in the secondary market be willing to pay a higher price.
While CryptoPunks may be one of the most well known projects within the NFT space, purchasing one of these can only be done in the secondary market today. It is only possible to purchase a CryptoPunk if a user is willing to pay thousands of dollars and in some cases millions of dollars.
Looking at the previous sales and owners of these NFTs, they have enormously increased in price. Previous owners of these NFTs are tracked on the blockchain for all users to see; this is known as provenance. NFTexplained.info has created an in-depth explanation as to what provenance is and how it affects the price of NFTs; that article can be found here.
While Meebits are a lesser known project relative to CryptoPunks, they are still a widely known line of NFTs. Selling out in roughly 8 hours, it is no surprise these can’t be purchased for less than roughly 1.5 ETH; some are even selling for hundreds of ETH. High awareness drives demand; it could be worth purchasing one in the secondary market under specific conditions. These conditions would include analyzing the scarcity of the specific features the 3D character has and looking at previous sales trends.
A number of NFTs being listed on the OpenSea NFT marketplace are created by artists with little or no experience which oftentimes results in no demand for the product. NFTs are highly speculative investments and the NFTexplained.info team does not consider purchasing NFTs from unknown artists to be a wise investment.
As with any purchase or investment it is important to research and complete your due diligence before taking action. Keeping track of companies within the crypto space who are releasing new NFT projects could be a good way to secure profits. Primary sales are often the most successful way in which a user can earn a profit from reselling an NFT.
For example, when Binance released an NFT marketplace, the company also released a mystery box which consisted of numerous NFTs that ranged in scarcity. The entire mystery box collection sold out in seconds and those who were lucky enough to receive a high tier NFT could make an enormous amount of profit!
NFTexplained.info is up to date with what is happening in the NFT space. We have created an article explaining the essentials of what you should know about the Binance NFT marketplace; that article can be found here. Keeping up with NFTexplained.info is a good way to be aware of what is happening and the initall NFT drops which could lead to high profit from purchasing during primary sales.
What Famous People Own CryptoPunks?
CryptoPunks have gained enormous awareness because of publications such as CNBC, The New York Times, Christie’s auction house, The PBS NewsHour and many more who have released articles about these NFTs. Aside from those publications, famous people have also expressed lots of interest which NFTexplained.info will cover in this section of the article.
As a general statement, numerous influential people have talked about CryptoPunks and are owners of the NFT line. A few noteworthy people include: Jay-Z, Steve Aoki, Faze Banks, Gary Vaynerchuk, FEWOCiOUS, Dylan Field, Shalom Makenzie, Nadeshot, Odell Beckham Jr. and many more. These people have helped bring awareness to the CryptoPunk cult and are owners themselves.
Famous rapper, Jay-Z changed his Twitter profile into a CryptoPunk he had purchased; this particular punk was wearing a gold chain. Jay-Z recently got into the NFT space and decided to auction off his most recent album, ‘Reasonable Doubt’ as an NFT through the famous auction house Sotheby’s.
Steve Aoki is a famous musician and entertainer who primarily creates electronic dance music. In 2012, Pollstar named Aoki the highest-grossing dance artist in North America from tours; he has also created numerous top hits. He currently has over 8 million followers on Twitter and his profile picture is CryptoPunk #6473; this punk has features such as purple hair and VR glasses. Steve Aoki purchased the CryptoPunk for 65 ETH which was (roughly) over $150,000.
Faze Banks is the esports founder and owner of Faze Clan; he has amassed an enormous following on numerous social media platforms, especially Youtube. His collection consists of 9 different CryptoPunks which add up to roughly half a million dollars. He recently purchased CryptoPunk #5827 for almost $100,000. He also changed his Twitter profile picture to a CryptoPunk.
Gary Vaynerchuck, more commonly known as Gary Vee, is someone with an enormous internet presence and is known for being an entrepreneur for multiple businesses. He started his own NFT project known as VeeFriends. Gary Vee and the VeeFreinds team currently owns 5 CryptoPunks. He has also expressed his love for CryptoPunks on the internet numerous times and even tweeted, “I love CyptoPunks”.
FEWOCiOUS is one of the leading digital artists within the NFT space. He has had his work auctioned off at Christie’s and broke the record for youngest solo artist and first artist to crash the site. NFTexplained.info has created an in-depth article explaining who the digital artist is and his empowering story; we highly recommend reading that article.
Dylan Field is an entrepreneur who started Figma which is a software company that created visual designs for enormous companies such as Twitter, Slack, and Airbnb. Last April, Figma was valued at $2 billion!
Shalom Makenzie is a DraftKings’ board member and its largest shareholder. He purchased an alien CryptoPunks for roughly $12 million in the Sotheby’s auction.
Matthew Haag, more commonly known as Nadeshot is the owner of the esports team 100 Thieves. He has amassed millions of followers online and was a former professional Call of Duty player. His profile picture on Twitter is currently set as a CryptoPunk.
There are many more celebrities who own CryptoPunks: Snoop Dogg, Mark Cuban, Serena Williams, Logan Paul, Jason Derulo, Marshmello, Jordan Belfort, and Dan Bilzerian amongst many others.
We hope you are just as excited as we are about NFTs and continue to stay informed at NFTexplained.info. To get the latest news in this rapidly evolving space, follow our team on Instagram & Twitter!