What Are CryptoPunks? The Ethereum NFT Sensation’s Wild Ride

CryptoPunks have been back in the news of late. Seedphrase, a DJ who owns the rarest CryptoPunks NFT out there (CryptoPunk #8348), announced this month that he had signed to talent agency WME for a new record release. And in June, Yuga Labs—which acquired CryptoPunks in May 2022—announced that it intended to release a book on the popular NFTs. So what, exactly, is this oddly-named commodity with its pixellated avatars?

The market for crypto collectibles released as non-fungible tokens (NFTs) exploded in 2021, with $2.5 billion in transaction volume in the first six months as NFTs entered the mainstream.

The boom also saw NFT enthusiasts rediscovering some of the earliest non-fungible tokens, propelling the value of these crypto collectibles to hitherto-unknown highs.

One of these early NFT projects was CryptoPunks: a set of randomly generated pixel-based avatars. Some of the rarest, most desirable CryptoPunks have sold for millions of dollars. Seriously! By mid-2022, the tokens had seen over $2 billion total sales volume.

Here’s what you need to know about one of the most popular NFT collections around.

What are CryptoPunks?

Created by development studio Larva Labs, CryptoPunks are a series of 10,000 images tokenized as NFTs on the Ethereum blockchain. An NFT is effectively a deed of ownership to a digital item, and in this case, holding a CryptoPunks NFT means that you are the sole owner of a one-of-a-kind pixel avatar. As mentioned above, ownership of CryptoPunks changed hands from Larva to Yuga Labs in May 2022. Yuga is the creator of the Bored Ape Yacht Club NFT.

Each CryptoPunk is randomly generated from a list of dozens of attributes, which means there’s an array of designs: people, zombies, apes, and even aliens. The aliens and zombies are among the most popular avatars that have commanded some of the highest sale prices to date.

Where did CryptoPunks come from?

Believe it or not, CryptoPunks were released for free back in 2017. Ethereum’s ERC-721 non-fungible token standard wasn’t even a thing at that point, and the two-person team at Larva Labs released them as an experiment. Ethereum wallet owners snatched up the 9,000 CryptoPunks that were released to the public, while Larva Labs held onto the rest.

NFT volume gradually rose over the next three years, but it wasn’t until late 2020 and especially early 2021 that demand skyrocketed for these provably scarce digital collectibles. The secondary market value for CryptoPunks shot through the roof, leading to multi-million-dollar NFT sales, auctions at Christie’s and Sotheby’s, and a wealth of CryptoPunks used as Twitter profile pictures.

What’s so special about them?

CryptoPunks have some high-profile owners, too, such as rapper Jay-Z, YouTube personality Logan Paul and tennis champion Serena Williams.

On top of that, there are clear differentiators that make certain CryptoPunks more desirable and valuable to collectors. Alien avatars are the rarest of the randomized images, and as such, alien CryptoPunks are among the most expensive NFTs sold to date. Ape and zombie designs are also in demand.

Most of the CryptoPunks just look like humans with varying features and accessories, however, and the plainer-looking ones are close to the market floor in terms of asking price on NFT marketplaces.

The future

What’s next for CryptoPunks? Well, they will likely continue to change hands on secondary markets, potentially generating huge returns for investors who bought in before the surge.

There’s no way to tell whether the current level of demand will continue, but the entry-level price for Punks continues to rise. As of July 14, 2023, the average CryptoPunk NFT goes for about 53 ETH (about $2000)

This story was originally published on January 10, 2022 and was updated on July 14, 2023.