Key Points

  • Larva Labs is the creator of the iconic CryptoPunks NFT series.
  • The design studio also launched a line last year called Meebits that made $80 million a day.
  • Larva Labs has taken a strong stance against CryptoPunks imitators, most recently taking controversial action against V1 Punks, derived from the original CryptoPunks smart contract.

The CryptoPunks community is becoming increasingly frustrated with Larva Labs. Chris Williams, editor of CryptocurrencyBriefing, explains why.

How Larva Labs has tarnished its reputation

Throughout last year, I spent a lot of time cursing all the NFT blue chips I missed (the cryptocurrencyBriefing team is well aware of this; I talk about it enough on our daily conference calls). Of all the things I failed to trigger, I was most disappointed in CryptoPunks – it was such an obvious deal after the Beeple auction, so when they overtook NFT summer with reasonably sized prices.

But recently, CryptoPunks has fallen out of favor, leaving me less salty with my thoughts. The project has fallen out of favor for a number of reasons, including its community of occasional narrow-minded snobs who were lucky enough to get into ethereum early, and some ape collection that caught the attention of Paris Hilton and Jimmy Fallon. But the biggest reason CryptoPunks lost its crown was its creator, Larva Labs.

visa-punk-unnamed-1.png.webp Punk #7610, owned by Visa (Source: Larva Labs)

For those of you who don't know, Larva Labs is a design studio made up of Matt Hall and John Watkinson. The two creatives, who have previously developed mobile apps and projects for companies like Android, released the now iconic 10,000 pixel art punk character for free back in June 2017, long before anyone had to deal with whitelisting or any other pre-cryptocurrency minting shenanigans. Similar to other key cryptocurrency projects like Bitcoin and Yearn.Finance, this fair release has contributed to the huge success of CryptoPunks. It was also early; by the time the New York Times and TechCrunch wrote about NFT in 2021, CryptoPunks was already a historical artifact. Christie's and Sotheby's auctioned them off, Jay-Z and Visa bought theirs, and, well, we all know what happened to the reserve price after that.

But even as CryptoPunks cemented its status as a cultural treasure, Larva Labs managed to tarnish its reputation on multiple occasions. Hall and Watkinson abandoned a bland project called Meebits at the top of May and ran a Dutch auction starting at 2.5 ETH (about $8,000 at the time), knowing that those overpriced by Punk would buy the hype (to be fair, Punk holders could mint a Meebit for free). They made $80 million a day. Nothing has happened to Meebits since then, and the series has underperformed all the famous NFT avatar projects in terms of price.

They also signed a Hollywood deal that allows their NFT to be used for Hollywood movies. While punk holders applauded the move, it was a warning of what was to come: around the same time, the pair became more aggressive in sending out copyright removal notices to various punk knockoffs that appeared on Ether and other blockchains.

Screenshot-2022-02-04-at-12.10.04-439x440.png.webp V1 Punk #6083 (Source: V1 Punk)

Recently, Larva Labs took issue with V1 Punks, a set of algorithmically generated punks that are virtually indistinguishable from the punks in the main series (unlike their more famous tokenized cousins, V1 Punks have a pink background). V1 Punks were born out of the initially flawed CryptoPunks smart contract, and while Larva Labs deprecated them in 2017, a community has since formed around them, inventorying them as ERC-721 and acknowledging their OG status.

Larva Labs doesn't like the popularity of V1 Punks as it clearly undermines the prestige of the main series. As Cobie summed up nicely this week, while Hall and Watkinson are usually on the back burner of any sort of community building, they recently responded to the latest V1 Punks rally by dumping 210 ETH worth on the market and going all in on royalties. In the Discord post, Hall says he wants to stop V1 Punks from using the CryptoPunks name or artwork. Oddly enough, he then added that 210 ETH would be donated to the Rainforest Foundation.

CryptoPunks have a floor price of about 69 ETH today – obviously I wish I owned one. However, they are far from the most valuable NFT incarnation available today. That title belongs to Bored Ape Yacht Club, a celebrity-endorsed series that is rapidly rising to prominence by adopting the Web3 values. Yuga Labs, the team behind the project, offers copyright ownership and lucrative airdrops to its holders, and has partnered with global giants like Adidas, and will soon issue tokens. As I pointed out a week after the launch of Bored Ape Yacht Club, perhaps Larva Labs could learn something from them.

Don't get me wrong: CryptoPunks may have huge historical significance, and I wouldn't be surprised to see Punk's entry price soar in the future. But that's assuming its creators didn't completely kill the project's legacy in the first place.

Disclosure: At the time of writing, the authors of this feature own ETH and several other cryptocurrencies. They also have exposure to YFI in the Cryptocurrency Index.