''CryptoPunks'' is a

non-fungible token A non-fungible token (NFT) is a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership. The ownership of an NFT is recorded in the b ...

(NFT) collection on the

Ethereum Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (Abbreviation: ETH; sign: Ξ) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capita ...

blockchain A blockchain is a type of distributed ledger technology (DLT) that consists of growing lists of records, called ''blocks'', that are securely linked together using cryptography. Each block contains a cryptographic hash of the previous block, a ...

. The project was launched in June 2017 by the Larva Labs studio, a two-person team consisting of Canadian software developers Matt Hall and John Watkinson. The experimental project was inspired by the London

punk Punk or punks may refer to: Genres, subculture, and related aspects * Punk rock, a music genre originating in the 1970s associated with various subgenres * Punk subculture, a subculture associated with punk rock, or aspects of the subculture s ...

scenes, the

cyberpunk Cyberpunk is a subgenre of science fiction in a dystopian futuristic setting that tends to focus on a "combination of lowlife and high tech", featuring futuristic technological and scientific achievements, such as artificial intelligence and cyber ...

movement, and

electronic music Electronic music is a genre of music that employs electronic musical instruments, digital instruments, or circuitry-based music technology in its creation. It includes both music made using electronic and electromechanical means ( electroac ...

artists

Daft Punk Daft Punk were a French electronic music duo formed in 1993 in Paris by Thomas Bangalter and Guy-Manuel de Homem-Christo. Widely regarded as one of the most influential acts in dance music history, they achieved popularity in the late 1990s as p ...

. The

crypto art A non-fungible token (NFT) is a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership. The ownership of an NFT is recorded in the ...

blockchain project was an inspiration for the ERC-721 standard for NFTs and the modern crypto art movement, which has since become a part of the cryptocurrency and

decentralized finance Decentralized finance (often stylized as DeFi) offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks by using smart contracts on a blockchain. DeFi platforms allow people to lend or borrow funds f ...

ecosystems on multiple blockchains. CryptoPunks are commonly credited with starting the NFT craze of 2021, along with other early projects including

CryptoKitties ''CryptoKitties'' is a blockchain game on Ethereum developed by Canadian studio Dapper Labs, a company spun-off from Axiom Zen, that allows players to purchase, collect, breed and sell virtual cats. It is one of the earliest attempts to deploy bloc ...

Bored Ape Yacht Club Bored Ape Yacht Club, often colloquially called Bored Apes, Bored Ape or BAYC, is a non-fungible token (NFT) collection built on the Ethereum blockchain. The collection features profile pictures of cartoon apes that are procedurally generated by ...

, and the sale of

Beeple Michael Joseph Winkelmann (born 20 June 1981), known professionally as Beeple, is an American digital artist, graphic designer, and animator known for selling NFTs. In his art, he uses various mediums to create comical, phantasmagoric works that ...

's ''Everydays: The First 5000 Days''. There are 10,000 CryptoPunk tokens total. Due to their rarity and exclusivity, they sell for higher prices on the open market and have sold using auction houses like

Christie's Christie's is a British auction house founded in 1766 by James Christie (auctioneer), James Christie. Its main premises are on King Street, St James's in London, at Rockefeller Center in New York City and at Alexandra House in Hong Kong. It is ...

. On March 2, 2022, an anonymous user donated CryptoPunk #5364 to

Ukraine Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...

's government Ethereum wallet public address to help fund the Ukrainian government against the

Russian invasion of Ukraine On 24 February 2022, in a major escalation of the Russo-Ukrainian War, which began in 2014. The invasion has resulted in tens of thousands of deaths on both sides. It has caused Europe's largest refugee crisis since World War II. An ...

. On March 11, 2022 it was announced that all of the CryptoPunks IP was acquired by Yuga Labs (parent company and creators of the

project) for an undisclosed sum. Immediately, Yuga Labs announced they were giving full commercial rights to CryptoPunks owners. On 7th May 2022 the transfer was completed, and the whole CryptoPunks marketplace was moved to the new Yuga Labs owned website.

Concept

There are 10,000 unique CryptoPunks (6,039 male and 3,840 female), all of which are made digitally scarce through the use of

technology. Each one was algorithmically generated through computer code and thus no two characters are exactly alike, with some traits being rarer than others. They were originally released for free and could be claimed by anyone with an Ethereum wallet. The only costs to claim a CryptoPunk during their initial release were Ethereum (ETH) "gas fees", which at the time, were negligible due to little use of both the Ethereum blockchain and little knowledge of the project as well. Certain traits and types of characters are rarer than others. While many projects of more recent development often sample through hundreds of possible traits, the CryptoPunks project was not as complex. Most of the 10,000 total punks are humans, but there are also three special types: Zombie (88), Ape (24), and Alien (9). Aside from character type, there was a potential of 87 additional attributes.

Controversies

Flash loan

In October 2021, a single NFT transaction was made for 124,457 Ether ($532 million USD at the time of the sale) regarding CryptoPunk #9998, much higher than all previous NFT sales, leading to speculation on social media that this could have been some kind of scam, a security exploit or

money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...

. Larva Labs said that the purchase was made with a

flash loan Decentralized finance (often stylized as DeFi) offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks by using smart contracts on a blockchain. DeFi platforms allow people to lend or borrow funds ...

where the NFT's owner bought the item from themselves with borrowed money, taking out and repaying the loan within a single blockchain transaction, subsequently invalidating the sale from the asset's historic and from all the related statistics.

Sotheby's 104 CryptoPunks auction

In early 2022, a Sotheby's Auction for a single lot of 104 CryptoPunks was announced. The auction took place on 23 February 2022, but its seller (''0x650d'') changed their mind 23 minutes after the auction began and decided to withdraw the auction to keep the whole lot.

References

External links