What Are CryptoPunks? + [Are They A Worthy Investment?]
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CryptoPunks Nft, one of the most mind-boggling investments of the last decade, has thousands of visionary individuals in deep. But back in 2017, if you asked a friend to grab some of these, you may have easily gotten them wondering what they are.
Over the past few years, these minuscule artworks kept changing ownership. Some transitioned from a value of tens of thousands into millions of dollars. For instance, take June 2021 when every NFT enthusiast was gibbering about CryptoPunk 7523, worth $11.7 million.
Four months later, and you have the CryptoPunk #9998, a lady in snow hair with dark-pupil green eyes and a sepia complexion. She “sold” at almost fifty times more.
With a price worth a lavish four-star resort, it gets you wondering, “what are CryptoPunks?”
Dive in for a comprehensive analysis.
- What are CryptoPunks?
- How Do You Make Money on CryptoPunks?
- How Much is a CryptoPunk?
- Is CryptoPunk a Good Investment?
- Why You Shouldn’t Purchase CryptoPunks
- Can I Make My Own CryptoPunk?
- Will CryptoPunks Go Up in Value?
What are CryptoPunks?
CryptoPunks are 24×24 pixel, octa-bit style NFT characters invented in 2017 by John Watkinson and Matt Hall. Who would have thought tinkering with pixel characters could create tons of interesting inventions worth billions when combined?
They wanted to build a program that could generate thousands of different avatars, making 10,000 characters before wrapping it up.
John Watkinson and Matt Hall came up with CryptoPunks inspired by the 70s British Punk music, the London Punk Scene, intending to use them to create an app. However, these avatars turned out to be a brilliant technological leap leading to storing the works on the Ethereum blockchain technology.
In the real world, it's easy to tell who has an art piece and who owns it. Digital art is ubiquitous which makes ownership difficult. So, the system's challenge was whether users could think they own anything.
When getting CryptoPunks, you aren't spending on the little characters per se but their non-fungible tokens popularly known as NFTs. These are unalterable, publicly-verifiable cloud-based authenticity certificates with a history of ownership.
CryptoPunks need no maintenance, are unbreakable, have secured provenance, and require no coverage, shipping, storage, or transaction costs. Anyone can see them, yet the ownership is clear through the non-fungible token. It's like owning an artwork that's forever on loan to a gallery.
What are CryptoPunks Used for?
CryptoPunks serve as luxury symbols in crypto communities due to their rarity. They fetch hefty prices in private transactions or auction houses, often a couple hundred thousand USD or more.
Over 90% of the CryptoPunks are humanoid, with the remaining being aliens, apes, or zombies. Such uncommon avatars often fetch premium prices.
Moreover, characters with extra accessories cost more, with the highest option having seven. For instance, you may find a certain hair color or clothing is uncommon, making it a premium acquisition.
How Do You Make Money on CryptoPunks?
Investing in CryptoPunks the soonest — or any other NFTs for that matter — is a brilliant idea as these pieces keep rising in price with time.
In fact, Punk prices in January 2022 were as high as 200 times those in July 2020, yet they aren't even the highest averages recorded.
With many NFTs, shrewd users take to minting before the characters hit the market. While you can't board that ship with CryptoPunks, excellent revenue-earning opportunities are available. Some only require you to loan rights for a limited term.
Rent Your CryptoPunks
Users can borrow CryptoPunks to display them as their social network profile pictures. Smart contracts govern the details of the agreement between you and the renter.
reNFT is a popular platform for leasing NFTs like CryptoPunks, where lenders can set maximum lending days and rates. CryptoPunk renters can choose their ideal rental duration, usually up to 99 days.
Entities like NFTfi let people borrow against their CryptoPunks. The program gives CryptoPunks owners (who don't want to sell their characters) instant liquidity.
You can subsequently convert the financing into fiat, use it to get more Punks, invest in DeFi protocols, plus more.
With their continued integration with DeFi infrastructures, you can now offer liquidity and get CryptoPunks in return.
You can earn a return by depositing virtual assets into DeFi protocol smart contracts. Punk staking allows you to earn from the asset while owning it.
Punks, like other NFTs, enjoy smart contract protection. The contract has capabilities that let the token communicate with the blockchain and other tokens. Moreover, the contract deals with the intricacies of Punk-staking and manages your revenue.
Sometimes, stakers receive governance tokens as part of their compensation. These protocols provide token holders a say in how their communities evolve.
Frequently, you can reallocate coins gained through Punk staking into other revenue earning protocols.
How Much is a CryptoPunk?
Being the biggest first NFT collection, getting a Punk is costly. They normally sell for $350,000 to $500,000, although some cost millions. Meanwhile, the cheapest is a little over $200,000 per publication time.
With a 19-figure value, the straight-haired #1477 is the priciest Punk on sale. That's the rarest feature, present in 150 other punks, with other attributes including:
- Big shades like 534 others
- Earrings like 2458 others
Why are CryptoPunks So Expensive?
Scarcity plus age are the top factors that make CryptoPunk’s demand skyrocket. A majority of those investing in Punks aim at owning the first NFT artworks that are available – at least.
The exclusivity of tokens gives NFTs their value and popularity. The restricted number of CryptoPunks for sale fuels the intrigue and drives demand sky high.
Moreover, popularity among stars like Jay-Z, Snoop Dogg, and Serena Williams drives the Punk demand.
What is the Cheapest CryptoPunk?
At first, NFT was free to every Ethereum wallet holder. Within a short while, 9,000 CryptoPunks went to various owners, with the rest remaining with the inventors.
At 66.91 Ethereum ($207,185), #8381 is the cheapest Punk at the moment. This simplistic male avatar only possesses two attributes. While adorning a bandana that 480 other CryptoPunks have, it also includes the rarer muttonchops present in only 303 characters.
Is It Profitable to Sell NFTs — CryptoPunks in Particular?
To the casual observer, a CryptoPunk is little more than a basic pixelated picture, making it difficult to understand why they are worth seven figures.
To begin, determining the value of a CryptoPunk necessitates focusing on the exclusivity of its qualities. The characteristics of a CryptoPunk affect pricing depending on three elements: Punk type, features, and feature count.
Punks come in five varieties: alien punk, ape, zombie, male, and female. Aliens are the most uncommon, trailed by apes then zombies. You may have come across the Bored Ape Yacht Club, but that's a different set of NFT project and not part of the CryptoPunks collection.
It's no shock that aliens sell for more than five times ape avatar prices, despite the latter being significantly more valuable than zombies.
The more prevalent a Punk trait, the less a CryptoPunk fetches during sales, though certain exclusions exist.
Firstly, if the character is uncommon, like a zombie, a common feature won't significantly impact its worth. Moreover, the value of a CryptoPunk improves with commonness, unusual traits, and lesser trait count.
Attribute quantity is a typically overlooked CryptoPunk trait, with many current owners seeking fewer qualities over avatars with more.
The attraction and pricey nature of minimalistic avatars could be due to how simple it is to recognize their fewer characteristics. CryptoPunks with many characteristics tend to resemble each other.
Is CryptoPunk a Good Investment?
Younger generations respect digital items similarly to physical goods, making CryptoPunks and many other NFTs appropriate investing selections.
Old is Gold
CryptoPunks, while not the first NFTs, are the first sizable NFT collection. This is crucial when evaluating long-term worth. While other reputable NFTs are available and worthwhile alternatives, CryptoPunks are years ahead.
Blockchain enthusiasts always look to them as NFT and metaverse avatar parents, securing their value for years to come.
High Positive Responsiveness
When the value of crypto or crypto art increases owing to decentralized finance, CryptoPunks often gain the most value. Investors like to stick in crypto and establish a name for themselves among their peers. CryptoPunks are amongst the greatest methods to achieve both.
All avatars benefit, though top ones demand premiums from the mightiest. Sure, crypto drops lower NFT rates, but the elite characters aren't usually available for purchase at such times.
CryptoPunks are the Internet's VIP passes. Although still largely unknown in the crypto sphere, owners are becoming a distinct subculture.
Virtual VIP passes are imminent as teens and young adults immerse themselves in the digital world. As this age cohort matures, CryptoPunks and other reputable NFTs will have a massive demand.
You'll constantly find purchasers, whether selling wrapped CryptoPunks on OpenSea or the fee-free Larva Labs platform. Using decentralized finance systems like NFTX, you can quickly purchase and sell CryptoPunks, as well as fractionalize ownership across several buyers.
Punks are domain-neutral avatars. They are garnering popularity across all social networks due to their simplistic pixel graphic style. Check Crypto Twitter and Clubhouse, and you won't fail to spot a Punk avatar.
Some are now identifiable with personalities, something that often adds value. These are crucial drivers of protracted desirability, especially as individuals get hooked and stop selling them.
With a progressively diminishing supply, whatever remains will likely attract immense proliferating proceeds.
Why You Shouldn’t Purchase CryptoPunks
- They have more on-chain expenses because of the Ethereum application.
- Rather than being human art pieces, they are machine-developed.
- Traditional payment options like PayPal and credit cards will not work.
- The need for non-custodial wallet collection makes the system less intuitive.
Can I Make My Own CryptoPunk?
An exclusive collection of 10,000 zombies, aliens, ladies, males, and apes, there is no way you can create a CryptoPunk NFT, at least not an authentic one. Because of the structure of blockchain, even Larva Labs can't modify Punks.
Therefore, you can only create a new set of NFTs inspired by Punks but can't develop avatars with the exact “resemblance” and name.
Will CryptoPunks Go Up in Value?
While NFTs depreciated towards the end of 2021, they are here to stay. Punks, unlike most competitors, had their highest sales in the final half of the year, rising steadily before a sharp decline in January 2022.
Nonetheless, the Punk craze doesn't seem to be ending any time soon, as even that declined figure is still higher than averages before July 2021. In fact, the difference between mid-January and early February figures are pretty dramatic, with an almost 200% increase recorded.
CryptoPunks are now epitomes of social prestige, as only a few people own or can acquire them. This collection's worth will likely improve with time, though no one is to say top alternatives won't water its massive appeal.
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