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

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

CryptoPunks is iconic in the crypto world, and the project spurred numerous imitators as it gained popularity. NFT profile pictures. But with a new owner in the form of Bored Ape Yacht Club creator Yuga Labs, we begin to get an idea of ​​how the new steward plans to use the Ethereum NFTs and push the brand forward.

Yuga Labs has the CryptoPunks and Meebits properties from original creator Larva Labs in March, along with a substantial stock of NFTs from both collections. In June, the firm hired Noah Davis, who previously headed digital sales at auction house Christie’s and sold Beeple’s $69 million NFTto oversee the future of CryptoPunks as its brand lead.

Davis tells Decrypt that the event was initially pitched to him by Guy Oseary, the veteran music industry executive and former label executive who represents Yuga Labs. Oseary was initially hesitant about the position, but assured Davis that it would be a worthwhile job. After hearing the full details, Davis agreed.

“It’s an opportunity I couldn’t refuse,” said Davis. “This is my dream job.”

He has been meeting with CryptoPunks owners for the past few weeks to discuss their feelings about the collection, which has produced dozens of NFT sales of at least $1 million each-and more than $2.3 billion value of trading to date, despite being free to coin at launch in 2017.

In addition to the acquisition in March, Yuga Labs also announced that the Web3 startup will grant full commercialization rights to CryptoPunks holders, allowing them to create projects and derivative products based on their own artwork. This is what Yuga Labs already offers to Bored Ape Yacht Club owners, and it will also extend the rights to Meebits holders.

CryptoPunks owners will be granted those rights on August 15 when the IP license agreement is released. The end result is ultimately the same as the Bored Apes, Davis said, but there is a key difference: while the Bored Apes’ commercial license is short and sweetthe CryptoPunks and Meebits license will appear to be quite a bit longer.

“We wanted to make sure that with the license we’re giving Punks we’re expanding into some of these newly defined gray areas,” Davis said, “giving more protection where we can and more explicitly describing what the license is is. does, and also what it does not do.”

Several NFT projects have struggled to navigate commercialization rights grants over the past year, a process Davis describes as a “whirlwind shitshow for everyone.” He said that there are important additions to the CryptoPunks license that are not present in the Bored Ape Yacht Club license – which, Davis explained, will not be updated or expanded to accommodate the new Punks and Meebits terms. does not fit.

As with the Bored Apes, licensing rights are attached to each individual NFT. But one of the “grey areas” the CryptoPunks license describes is that if a Punks owner sells his or her NFT, he or she can “continue to use and benefit from what they have already created and published .” per tweet from the official CryptoPunks Twitter account.

Asked for more details on how that particular model works, a Yuga Labs representative said Decrypt to “refer to the full license once released on August 15.” Otherwise, Davis said the primary license restrictions are that Punks cannot be used to create hateful content or for illegal purposes. Otherwise, anything else is fair game for holders to create and profit from.

Davis said that while the short Bored Apes license is “super punk rock,” he believes it’s legally “better to be complete” as Yuga Labs drafts new commercial use licenses for its recently acquired properties.

Luxury jewelery brand Tiffany & Co’s recent NFTiff decline is an example of what is possible with the new license. That launch let CryptoPunks holders purchase one of 250 Ethereum NFTs for 30 ETH each (over $50,000 at launch) and then exchange it for a physical pendant based on the holder’s owned CryptoPunk image.

This was not an official Yuga Labs collaboration, the CryptoPunks account tweeted, but rather an initiative between Tiffany and Web3 infrastructure provider Chain—the latter firm’s CEO holds the record for the most expensive Punk purchase. Davis described the Tiffany drop as “a great example” of how Punk’s commercial rights can be leveraged for new projects.

Granting commercialization rights to holders finally addresses one of the major complaints among holders, as Larva Labs has previously wavered on whether or not to grant such rights. One prominent container, codenamed 4156, finally sell his CryptoPunk (#4156) in December 2021 for over $10 million worth of ETH after dissatisfaction over IP rights.

‘CryptoPunks as Art’

Solving that bubbling complaint is one part of Yuga’s CryptoPunks plan. Another, Davis said, is to provide opportunities to better connect the container community, which addresses another common complaint that Larva Labs has been too clumsy in the past.

“The community is the utility,” Davis asserted, even while acknowledging that “community” and “utility” are overused terms in the NFT space to the point of parody. However, he said he believes there is some truth to the statement, and finding new ways to connect and engage holders is one of his top priorities.

“It’s pretty clear that CryptoPunks [holders]overall, are some of the most talented builders, storytellers and creatives in Web3,” said Davis Decrypt. “Strengthening community is the most important thing for most Punks.”

However, how Yuga Labs plans to turn CryptoPunks into a revenue-generating business remains to be seen. CryptoPunks has a 0% creator royalty, meaning Yuga currently gets no cut from secondary sales.

Yuga recently changed the Meebits royals from 0% to 5% to fund future initiatives—a move that drew mixed reactions from the community—but there’s no immediate indication that the same will happen for Punks.

“I think that the idea for now is not to focus on turning CryptoPunks into another golden goose — because there are already some golden geese out there for Yuga,” Davis said. “In the long term, this will of course be part of the agenda and perhaps the internal road map.”

Yuga’s purchase of the CryptoPunks IP also raises questions about how it will be integrated into the startup’s larger Web3 ambitions, including the upcoming Ethereum metaverse game, Otherside. We’ve already seen a Punk in the trailer for the game, but Davis said they wrestled with questions about how Punks fit into a Bored Ape-centric world.

“Punks were coined in 2017, created a long time ago in crypto time – decades in crypto time,” he said. How they end up being represented in Otherside remains an “open question,” he added, saying he’s “gathering the vibes” from Punks owners he talks to.

There is a significant cultural value to CryptoPunks among crypto-enthusiasts, which could bring other benefits to Yuga beyond trading royalties and revenue-generating initiatives. CryptoPunks are not just a few of the most valuable NFTs ever soldbut they are increasingly iconic and have been hugely influential in the NFT space.

“How cool is it to own the cave paintings of Web3?” Davis said of CryptoPunks. “That in itself is incredible power.”

That ethos, along with Davis’ own background, points to one path Yuga Labs wants to pursue in the future: making the case for CryptoPunks as an important piece of modern art.

“A focus for me is to really ensure that people view CryptoPunks as art,” he explained, “and establish that legacy as artwork, as well as an incredible use case for this new technology of the non-slingable token.”

CryptoPunks have been auctioned before and at obvious sumsand Davis himself helped facilitate the sale of a batch of nine CryptoPunks for nearly $17 million ETH at Christie’s in May 2021. But for Davis and Yuga Labs, the goal is less about driving top-dollar sales and more about ensuring broader appreciation for Punks and their influence.

“You don’t have a lot of institutional recognition for CryptoPunks, to see Punks in museum collections and displayed at museums,” he said. “Those opportunities to engage with the public are onboarding opportunities for decentralization and Web3 in general.”

“Definitely, focusing on institutional influence is going to be important to me,” Davis added.

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