The Sunday Drip #4 | The CryptoPunks project is hurting the NFT world
CryptoPunks, the most renowned NFT project, is hurting the NFT world in an unexpected way.
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I’ll always apologize for my headlines before I start.
Phase 1: Write eye catching headline with slightly misleading controversial opinion.
Phase 2: Explain truths behind controversial opinion.
I’ll say it again. The CryptoPunks are hurting NFTs.
Hear me out and be patient.
CryptoPunks are the reigning kings of the NFT world (for now). Even the most casual onlooker/Twitter user can identify a pixilated punk face as a CryptoPunk. We’ve seen every headline on CNBC aimed at outraging your parents about CryptoPunks selling for millions at auction. On secondary sales alone, the Punks have racked up 757k ETH (~$3B) in all-time volume. There is an unbelievable amount of money currently invested in CryptoPunks.
You get it.
The Punks’ meteoric rise is insane and you wish you bought one when they were free (plus 2017 gas lol). We all wish we bought one. And that is one aspect of the problem I have with the Punks..
Daniel Kahneman could analyze heuristics to prove that the CryptoPunks are driving the wrong NFT buyer behaviors, but here’s my terrible attempt at this. I’m not even sure if I used the word heuristics right.
Too many newcomers are chasing the next CryptoPunks.
There are people in NFTs who came to build and create. There are people in NFTs for the community. There are people in NFTs for the utility. We like these people.
Unfortunately, a growing majority of people in NFTs are here for the profits, asking “wen moon” looking for the next 1000x project. We don’t like these people.
“I mean, look at CryptoPunks.” — Nooo anyone but them.
“Rad Rhinos are the next Crypto Punks.” — Sigh.
“Even if the floor gets to 1ETH, I’m set for life.” — Here we go.
I am hearing people say this more and more and it needs to change. These types of quotes can all be added to the definitive list of things that make me want to die. It’s becoming a trend that needs to change. The likelihood of a 100x happening and the expectation of a 100x happening are both trending in opposite directions and this is not good for the long term success of NFTs.
NFT buyers and creators are changing.
I’ve waited too long to clarify my argument. Here we go. The problem with CryptoPunks is that they are attracting the wrong type of interest and people into NFTs.
Explaining why CryptoPunks are worth their expensive price tag is extremely difficult, especially to the resistant or uninformed person. Because it is difficult to explain, the incorrect reasoning for the Punks’ success is perpetuated through the NFT world, especially to the newest entrants.
People read catchy headlines (same headlines I admit to abusing above) and assume the success of the Punks is entirely random. I’ll touch on this later..
A conversation about NFTs when CryptoPunks get brought up can be painful. Especially if you are discussing with a particularly stubborn person, you might rather shift the conversation to US Politics and choose different sides to ease the pain. Anything is better than telling your Uncle, who has worked in manufacturing for 35 years and calls NFTs online baseball cards, why NFTs are valued the way they are. Explaining Punks isn’t the only problem.
The new PFP projects aren’t helping either.
You’d think we’d get better, but we’re somehow regressing with most NFTs.
I am not sure if there is an adjective + animal/mascot combination left to use for a project. I’m ready for Lazier Lions or something to that effect to drop. NFT marketing experts are breaking down the lyrics of Baby Shark looking for inspiration for their next NFT collection.
What’s happening right now is killing the credibility of the NFT world.
Hundreds, if not thousands, of new and inexperienced NFT buyers are getting rugged by the most recent Strictly 80’s Joel Baby Apathetic Apes collection that recently shot to the top of OpenSea’s rankings for a few hours. The opportunistic faux creators are playing a game of
ape monkey see, ape monkey do, selling out their own 10k pfp projects and abandoning them when they can no longer moderate their Discord or “airdrop” new variations of the same shitty art (psst, dropping more NFTs you have to pay for isn’t a utility. It’s a pyramid scheme).
I linked the South Park underpants gnomes at the top of this article for a reason (if you haven’t seen the clip, it’s worth a watch). Every new project I see in OpenSea is following the business plan of the underpants gnomes.
Phase 1: Mint NFTs
Phase 2: ????
Phase 3: Profit
And its working! And it will work! Until people are tired of getting burned over and over. But if this happens too often or too fast, they might choose to leave NFTs altogether.
This is all leaving a horrible first impression on anyone trying to get into NFTs for the first time. We’re literally becoming a meme industry. It’s not anyone’s fault though. Who among us can stop dreaming about acting on the advice to buy a major project before it got big? (Me. It’s me. I ignored BAYC in June 2021. Anyway.) We need to help each other understand what to look for in projects. We need to hold the creators more accountable, but I get rugs are hard to stop and they’ll adapt even if we educate everyone.
I’ll move on. Back to the Punks.
CryptoPunks have honestly earned their price tag.
CryptoPunks are successful for two major reasons. 1) their art and 2) their community.
Let’s immediately explain the art. I'll be honest. I don’t love pixel art at all. But in the same way that Monet is known for Impressionist art, the CryptoPunks are known for digital NFT pixel art. Let’s call a spade a spade, they have started a pretty influential style.
The Punks have started a revolution of copycat art, knockoffs, and derivative art (Phunks, Fast Food Punks, the list is endless). Whether you like it or not, CryptoPunks really do deserve a place in museums for their cultural significance. No pixel art before or after CryptoPunks (sorry Mooncats) will be more well known or influential than CryptoPunks. And that justifies their auction prices alone.
Their influence on digital art is a master class on modern culture in itself. I can’t list them all, maybe someone can, but it’s wild to see how far their reach has spread. But pixel art existed before the Punks, and the Punks are a homage to actual London punk culture and the cyberpunk movement. There is more to the Punks than just their art.
It’s their community. The CryptoPunk community, while smaller than most at 3.3k owners, is extremely influential and important in the NFT world. A single co-sign from a Punk owner can sell out an entire project (I realize that’s a little chicken and egg). There are celebrity owners like Jay-Z, Snoop Dogg, and Odell Beckham Jr. And they are nice to have. But it’s really the owners like gmoney, punk6529, beaniemaxi and even the former Punk holder, punk4156, that the Punks have to thank for their amazing community (forgive me if I leave more influential ones out). These Punks have been leading and influencing the conversation around NFTs and web3 for a while. I’ll get to punk4156 and CC0 soon..
Bottom line is the CryptoPunk holders created an amazing community that is extremely influential in the space. You could argue that this group would have been successful behind any project, but it helps that it was the first.
First I hate on them, then I credit them. What’s the deal?
To the untrained and outside eye, it’s very hard to see the significance of the CryptoPunk art and the power of the community they have built. Newcomers in the space need to understand that their Silly Salamanders are not just going to become CryptoPunks overnight. Especially when they are hoarding NFTs in the collection and contributing nothing to the community. The NFT OGs understand this and it’s why they are seemingly able to turn everything they touch into gold.
There are other problems though.
There is another issue with the Punks beyond perception.
Insert Larva Labs (creators of CryptoPunks).
The Punks have an amazing community, culturally significant art, andddddd… ? Not much else. The Bored Ape Yacht Club had their ApeFest parties (where The Stroke, LilBaby, Aziz Ansari and other prominent acts performed), free companion/mutant drops, merch, and their partnership with Adidas. It really doesn’t seem like the Punks have gotten anything in return from Larva Labs. The Punks’ main asset is the notoriety that the community itself created.
It’s unclear how much Larva Labs really profited off of the success of CryptoPunks. They don’t have the standard creator royalty that we all know (and respect), but they did sign a Hollywood deal that included CryptoPunks representation, and they absolutely profited off their 20k Meebits project, so they have money. It’s particularly interesting that Larva Labs signed a Hollywood deal, when the holders of CryptoPunks currently have little to no ability to profit off of the IP they helped build.
That’s a major problem that goes against the web3 culture.
I mentioned punk4156 above to highlight their recent battle and resulting exit (worth a read) from the CryptoPunk project as a way to highlight this glaring issue with the project as a whole. The CC0 issue is a whole different rabbit hole to go down, but it had be brought up as a knock against the project.
As I stated above, it’s hard for many to see the artistic relevance or understand the power of the community created by the Punks holders. When you combine that with the fact that the holders can’t financially benefit off of their Punks and Larva Labs has essentially contributed nothing to the Punks post-mint, you begin to see what the newcomers and outsiders of NFTs see in the Punks. A digital picture, with below average art, with no obvious benefits of owning.
Not all NFT projects have the problems that Punks do. Most of them have obvious benefits or ways that owners can profit off of them. Punks do not right now.
Let’s wrap it up.
CryptoPunks as the face of NFTs is setting us back.
The average NFT investor can’t stop dreaming about hitting the jackpot on the next CryptoPunks, especially when Logan Paul’s cousin also has an Energetic Elephant like they do and Gary Vee said “gm” in the Discord.
Every project is the next Punks. It’s
impossible difficult for newcomers to understand the differences between a Punks and a random pfp project. This is really my issue with Punks.
NFT buyers and NFT creators are only emulating what they have (poorly) learned from the most successful NFT project ever. This needs to change, but we don’t have many options to change this.
We can either educate newcomers, pray Larva Labs embraces the web3 world and allows their holders to benefit off their Punks, or…
We can get a new face of NFTs.
Hello, BAYC. Nice to see you up there.
Maybe there is hope for NFTs after all.
Agree? Disagree? Comments? Questions? Let me know! Possibly some typos.