The revival of scrapped “V1” CryptoPunks NFTs from Larva Labs’ original bug-ridden 2017 rollout has added a wrinkle to the debate over provenance, ownership, and artists’ intent in the Web3 world. And it doesn’t appear that V1 NFT owners are part of new owner Yuga Labs’ increasing plans for the CryptoPunks brand.

On Monday, Yuga Labs—which purchased the CryptoPunks IP from Larva in March—released the long-anticipated commercial rights license for the Ethereum NFT project, letting the owners of the 10,000 unique profile pictures turn them into all manner of derivative creations like art and products. It mirrors the approach of Yuga’s own popular Bored Ape Yacht Club.

But the IP licensing agreement specifies that it only applies to the CryptoPunks minted with the second smart contractsmart contract (self-executing computer code that is stored on a blockchain)—in other words, the “V2” or “official” CryptoPunks that have traded for millions of dollars apiece. Owners of V1 Punks have no legal clearance from Yuga to turn their NFT avatars into commercial creations.

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As CryptoPunks NFT Owners Get Commercial Rights, Yuga Hopes to Secure Their ‘Legacy as Artwork'

CryptoPunks are iconic in the crypto world, and the project spurred countless imitators as it popularized tokenized NFT profile pictures. But with a new owner in the form of Bored Ape Yacht Club creator Yuga Labs, we’re starting to get a sense of how the new steward plans to expand the utility of the Ethereum NFTs and push the brand forward. Yuga Labs acquired the CryptoPunks and Meebits properties from original creator Larva Labs in March, along with a sizable stash of NFTs from both collection...

Asked for clarity on Yuga’s stance on V1 Punks and future plans regarding the project, a company spokesperson told Decrypt this week, “There are no current plans for V1 Punks.”

An NFT is a blockchain tokentoken that can represent ownership in an item, including artwork, collectibles, and profile pictures like CryptoPunks. The project features 10,000 total pixel avatars, and collectively they’ve generated more than $2.3 billion worth of trading volume to date while influencing countless other projects (like Yuga’s own Bored Apes).

In an interview with Decrypt, CryptoPunks Brand Lead Noah Davis—who previously oversaw NFT sales at auction house Christie’s—shared his take on the V1 Punks, referencing original Larva co-creators Matt Hall and John Watkinson. But Davis said he would “not take a definitive stance” about the NFTs.

“Personally, I think that the V1 Punks are a very cool relic of Matt and John's creative process,” said Davis. “These are evidence of how Matt and John created the CryptoPunks.”

“Whether or not they are the CryptoPunks, I think that's been very clearly addressed by Matt and John—who are the artists and whose opinions matter, and are probably most important in this instance,” he added. “It's like a misprinted Jordan rookie card—but it's not the Jordan rookie card.”

What are V1 Punks?

Larva Labs’ stated stance on the V1 Punks was clear, but its actions muddled the message. V1 Punks really re-entered the CryptoPunks conversation late last year, when community members created a “wrapper” program that effectively rescued the abandoned avatars from Larva’s buggy, original smart contract, turning them into functional Ethereum NFTs.

Quickly, collectors began buying and selling Wrapped V1 CryptoPunks, trading them for increasing sums while calling them the “original” CryptoPunks. The V1 versions are identical to the “official” Punks NFTs, save for a new background color added via the wrapper. It clearly agitated Hall and Watkinson in the process.

Larva’s founders claimed that the V1 NFTs were “not official CryptoPunks” and said they “don’t like them”—but they confused the message by also wrapping and selling some of the V1 Punks that were in their own walletswallets. Ultimately, Larva Labs apologized in February and donated the funds to charity, calling its actions “stupid” and a “bad decision.”

However, Larva Labs then filed a DMCA copyright claim to get the V1 Punks delisted from OpenSea. Although the V1 community was ostensibly under attack by the CryptoPunks creators, some reveled in the chaos that ensued and celebrated Larva’s missteps.

“It was a big clusterfuck, right? We really put them under a lot of pressure,” V1 Punks community member hemba told Decrypt in May. “They were just tripping over themselves.”

In March, the situation changed dramatically when Larva Labs sold the CryptoPunks IP to Yuga Labs, Yuga opted not to pursue the DMCA claim, and Wrapped V1 CryptoPunks returned to OpenSea before the community launched its own Rarible-powered marketplace. The battle was over, plus Yuga apparently acquired more than 1,000 wrappable V1 Punks in the Larva deal, along with a Wrapped V1 NFT.

But what does that mean going forward for the V1 Punks? Yuga Labs may not be actively pushing back against the V1 community, as Larva Labs did, but holders are also not being invited to the “official” party and provided benefits as the CryptoPunks brand moves ahead.

When the V1 Punks’ own Rarible-powered marketplace launched in May, community members told Decrypt that they hoped to create an independent DAO—or decentralized autonomous organization—to unite all of Larva’s Punks: V1 Punks and the official (V2) CryptoPunks alike.

Some owners held out hope that Yuga Labs’ IP licensing agreement would acknowledge the V1 Punks in some way or grant them rights. But that wasn’t the case, and the topic remains at times contentious on social media, with collectors prodding Davis for answers and some Punk owners (like hemba) tweeting that they don’t accept Yuga’s licensing terms.

V1 Punks owners continue asking questions, and Yuga's initial response might not be what they were looking for. At least for now, any further V1 movement—including efforts to unite the communities amid animosity from some Punks holders—will have to come from the community, as ever.