In brief

  • Some CryptoPunks NFT holders are frustrated with Larva Labs over a lack of communication, licensing guidance, and community engagement.
  • One notable owner, Punk4156, sold his namesake CryptoPunk for over $10.25 million worth of ETH yesterday.

Larva Labs’ CryptoPunks are the O.G. Ethereum NFT profile picture (PFP) collection, yielding more than $1.75 billion worth of trading volume to date, including dozens of million-dollar sales. It’s the ultimate in Twitter cachet, with crypto personalities plus celebrities like Snoop Dogg and Jay Z using them—but some of the shine may be wearing off.

As the market increasingly shifts towards NFTs with utility or additional perks, some collectors see CryptoPunks as a relic. Licensing and commercial usage by NFT holders remains unclear for the project, in stark contrast to the rising Bored Ape Yacht Club, which lets users turn their owned Apes into music acts, brand ambassadors, and merchandise.

All the while, Larva Labs has been curiously quiet about Punks as their value surged this year, thus far not opting to layer in added benefits for holders or provide clear guidance on IP rights issues. Many CryptoPunks holders identify as their respective Punks and have built social media brands around the pixel PFPs, but discontent is on the rise.


Recent complaints about the ethos and utility of CryptoPunks came to a head yesterday when the pseudonymous collector Punk4156—a co-creator of Ethereum NFT project, Nouns—sold his titular NFT for 2,500 ETH, or more than $10.25 million. He told Decrypt today that it was “time to move on” following frustration over Larva Labs and the project’s future.

Will other prominent holders follow suit, and if so, will that diminish the allure of the Punks?

Rise of the Apes

There’s an apparent correlation between growing discontent around CryptoPunks and the rising prominence of its most popular successor, the Bored Ape Yacht Club. Yuga Labs’ collection of 10,000 Ethereum NFTs debuted in April and has skyrocketed in value since, with the cheapest available NFT now listed at 52 ETH on OpenSea, or about $205,000.

However, with Bored Apes, there’s value in more than just the original image itself. The Yacht Club bills itself as an exclusive community for holders, and the perks have been sizable.


Holders have received subsequent free Bored Ape Kennel Club and Mutant Ape Yacht Club NFTs, each valued at five figures or more, plus exclusive merchandise and access to an October concert featuring Beck, Chris Rock, and The Strokes during NFT.NYC. Some CryptoPunks holders grumbled on Twitter over Larva Labs’ lack of events that week.

For some holders, there’s an even larger opportunity around Bored Ape NFTs: Yuga Labs grants holders commercial rights to their individual ape illustrations. Now, music producer Timbaland and major label Universal Music Group have launched separate virtual bands based on Apes, Arizona Iced Tea has used its Ape for marketing, and other holders have made merchandise.

Why would companies and creators want to tap a Bored Ape for such purposes? The project has risen dramatically in value and allure since launch, especially in recent weeks as celebrities like Jimmy Fallon and Post Malone have “aped into” ownership. The Bored Ape Yacht Club brand has also partnered with apparel giant Adidas on a metaverse push.

It’s a cultural phenomenon that is expanding beyond the crypto world. Amid all of that, the Bored Apes’ star is rising: its price floor has jumped from 30 ETH a month ago to 52 ETH today. CryptoPunks, on the other hand, has seen a drop in the same span, from an entry-level price of about 80 ETH one month ago to about 68 ETH as of this writing.

While still immensely valuable (68 ETH is about $271,000), the value of floor CryptoPunks is falling, as is sentiment amongst some collectors. How much of that is due to the success of the Bored Ape Yacht Club is unclear, but the divergent price trends show a clear contrast of late.

A ‘glaring’ omission

More than four years after the CryptoPunks were first minted on Ethereum and the vast majority were given away free to the public (who only paid a gas fee), the question of copyright and commercial use of the NFT avatars remains unclear. Remember, this is an NFT collection that currently generates millions of dollars each day in trades.

Edward Lee, professor of law and director of program in intellectual property law at the Chicago-Kent College of Law, recently published a research paper attempting to clarify the question of what rights CryptoPunks owners have to their avatars.

“[When] Larva Labs first offered the CryptoPunks NFTs, Larva Labs’ webpage for the CryptoPunks didn’t discuss or provide a content license or the permissible terms of how buyers can use the CryptoPunks’ artwork or characters,” he wrote. “Today, such an omission is glaring.”


In January 2018, attorney Eric Adler—who registered the CryptoPunks’ copyright license—posted an article about attempting to reconcile the licensing confusion around the project. He recalled that Larva Labs co-founder John Watkinson reportedly “wanted each crypto-owner of a Punk to also be the copyright owner.”

However, that article is no longer published (an archived version is available), and Larva Labs has made no such public proclamations to that effect.

In 2019, Watkinson reportedly wrote in the CryptoPunks Discord channel that the company had adopted the NFT License created by Dapper Labs. The NFT License lets holders display the art and only use it for commercial purposes if it results in no more than $100,000 in revenue per year, but the holder cannot modify the artwork or use it to market third-party products.

On the Larva Labs website, the brief Terms and Conditions page for CryptoPunks does not include the NFT License stipulations or touch on copyright or commercial usage. By contrast, the company’s newest NFT project, Meebits, launched with a comprehensive Terms and Conditions page that digs into all of that in great detail. The Meebits license terms are similar in scope to those of the NFT License.

In August, Larva Labs signed a representation deal with Hollywood agency UTA to bring its properties to other entertainment formats. Furthermore, Larva has launched DMCA takedown requests against multiple derivative NFT projects this year.

The most notable example is CryptoPhunks, a self-proclaimed parody collection that flips the original Punks images to face left instead of right. Larva Labs successfully had Phunks removed from leading marketplace OpenSea, but trading volume has apparently grown as the Phunks community pushes back against the Punks creators.

Now with its own marketplace on and using the Twitter handle notlarvalabs, the collection has purportedly generated more than $30 million in trading volume since being delisted from OpenSea, and marked a new top sale of 97 ETH (or $420,000) this week.


In an open letter to Larva Labs—which itself was sold as an NFT for $20,000 worth of ETH—the Phunks team chastised the original creators not only for providing unclear guidance about licensing terms for the NFTs, but also for going after derivative projects.

“It’s time for an awakening in the NFT community,” the letter reads. “It’s time to stand up for censorship resistance, for change beyond our pervasive Web2 systems, and for true decentralization. Phunks stand for these principles. What is truly punk cannot be stopped. Long live Phunks, on the blockchain, forever.”

Punk no more

Punk4156, as he’s been called for much of this year, purchased CryptoPunk #4156 for 650 ETH ($1.25 million) in February 2021. At the time, it was the largest-ever single CryptoPunks sale.

Like some other collectors (including Punk6529), he has built a brand and identity around his CryptoPunk, amassing more than 100,000 Twitter followers, being immortalized in Beeple artwork, and co-founding the Nouns NFT project.

4156 told Decrypt today that he “thought it would be fun” to build a brand around the avatar of a bandana-wearing ape—one of the rarest images in the bunch. The commercialization aspect was unclear when he purchased the NFT, he explained. 4156 suggested that he tried to engage with Watkinson on the copyright topic, but was ignored and unfollowed on Twitter.

Between Larva’s DMCA takedown notices for derivative projects and the media representation deal with UTA, 4156 gradually became disillusioned with Larva’s emerging position.

“Over that time, it became clear to me that there was probably no chance that I would ever own the rights to the thing that I was building,” he said. “It's just kind of an illogical position to continue building your brand around something over which you don't have the strongest claim.”


Nouns is at the forefront of the emerging open-source IP movement in NFTs. With a Creative Commons CC0 license attached, anyone can create derivatives and commercialize the Nouns IP as they please, even if they don’t own one of the NFTs. Nouns is now attempting to build a creative studio around the concept with Uglydoll co-creator David Horvath.

Such CC0 projects, including CrypToadz, are entirely in the public domain. The idea is that spinoffs and derivatives will only accrue value back to the original work. It’s a position ripe for the era of internet memes, which 4156 and other advocates believe dovetails perfectly with provably scarce and verifiable digital assets in the form of NFTs collectibles.

Some fellow CryptoPunks owners find that idea radical, however. As 4156 and other notable owners have shared frustrations around Larva Labs in recent weeks, the Twitter discourse has turned adversarial at times. One collector, artist Claire Silver, tweeted that it was “terrifying to post” her view on the NFT copyright debate due to fear of blowback.

4156 told Decrypt that he believes that there’s “nothing at all radical about CC0,” and that it “embodies all of the same great things that we love about cryptocurrency,” but for culture.

Still, many CryptoPunks holders disagree with the notion that the collection needs to provide additional incentives, or allow owners to extensively commercialize the images. “The CryptoPunks don’t have to do anything but exist,” Twitter user Tycoon wrote.

“CryptoPunks are the Wright Brothers airplane of NFTs,” wrote DeFi Pulse co-founder Scott Lewis on Twitter. “Not literally the first non-fungible token ever attempted, but the first non-fungible token that ever flew. And they inspired a movement that is redefining the idea of art. Maybe you don't care about owning that. I do.”


Ultimately, given the perceived philosophical differences with Larva Labs, 4156 felt compelled to minimize his exposure to Punks and move on. He sold several other CryptoPunks last week and originally planned to keep #4156, but eventually changed his mind after initially “ripping the band-aid off, so to speak” with the earlier batch, he said.

Yesterday, he parted with his NFT namesake, initially offering it up on Twitter for 3,500 ETH before ultimately selling for 2,500 ETH ($10.26 million), with the buyer as yet unrevealed. It’s the largest CryptoPunks sale (in USD) using Larva Labs’ on-chain trading platform, although there was an $11.8 million off-chain sale via auction house Sotheby’s in July.

He plans to focus his energy on Nouns going forward and may keep the “4156” number while dropping the “Punk” from his Twitter handle. “The number became special because of the time I spent building a brand with it, and I'd like to pay homage to that in some way,” he explained.

Larva’s move?

Whether 4156’s move ultimately inspires other high-profile CryptoPunks owners to bow out remains to be seen. However, there’s still contention amongst collectors over the Punks’ role in the growing NFT scene, Larva Labs’ current level of interaction, and whether the project should confer additional or expanded rights upon holders.

“I love the history of the project and everything that it stands for but am [starting] to feel more isolated as things move forward,” tweeted Manifold co-founder Richerd Chen, who turned down a $9.5 million offer for his own CryptoPunks NFT in October. He added yesterday that both he and 4156 made “decisions based on our ideals.”

EthHub co-founder Eric Conner offered a recent perspective on the situation that was co-signed by notable NFT artist FVCKRENDER, among others, suggesting that CryptoPunks holders deserve to take over IP ownership for making the project valuable and meaningful.

“I don’t think Punks need to sell out, have a roadmap, or compete with other NFTs in a clout measuring contest,” he tweeted. “However, I do think Larva Labs should turn over the license and IP to the community. Let those who got it here take over.”

Larva Labs did not respond to Decrypt’s request for comment.


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