Yuga Lab Acquires CryptoPunks!
- Blog
- March 24, 2022
Yuga Lab Acquires CryptoPunks!
Yuga Labs, the developers of Bored Ape Yacht Club, acquired the intellectual property of the initiating NFT collectible series CryptoPunks from its creators, Larva Labs, in a spectacular move last week. The merger of two of the largest NFT collections is a watershed moment that could signal future NFT project purchases. It also demonstrates the radically diverse approaches to digital ownership that big initiatives have adopted. So let’s dive into what the acquisition might signify for NFTs in the future.
- The deal gives Yuga Labs control of the branding and logos for CryptoPunks and Meebits, Larva Labs’ two most well-known projects. Although the details of the financial deal weren’t revealed, both collections are trendy – with a combined sale exceeding $2.5 billion in the secondary market. Unlike many other significant collector projects, CryptoPunks and Meebits did not earn Larva Lab’s royalties on secondary market sales, and Yuga Labs said it has no plans to add royalties or the BAYC-style “membership club” model.
- CryptoPunk owners, including Serena Williams and Jay-Z, now control their Punks’ IP, a feature previously only available to BAYC collectors (Meebits holders get the same rights). What exactly does that imply? Members of the BAYC have reaped a range of benefits from their intellectual property rights. Individual owners have used their NFTs as the faces of various enterprises, while Yuga Labs owns the commercial rights to the overarching BAYC trademark. For example, the band Kingship, which has been compared to Gorillaz’s virtual band, comprises four BAYC avatars and is signed to Universal Music Group’s “metaverse label.” Others have used their characters to market everything from IPAs to marijuana to comic strips.
- Despite signing a deal with top Hollywood agency UTA, CryptoPunks has been virtually inert, especially when compared to BAYC, which is known for hosting exclusive parties, landing major magazine covers, and even developing a play-to-earn game. Larva Labs’ founders conceded that their hands-off strategy wasn’t optimal and that CryptoPunks and Meebits “now require a steward with a different skill set to continue expanding.” The varied methodologies may be reflected in project prices: on Tuesday evening, BAYC had a floor price of 89 ETH, while the lowest CryptoPunk was selling for 67 ETH.
- While the acquisition coincides with many worrying about the NFT market’s cooling, prices for A-list projects like BAYC and CryptoPunks remain high. The average selling price of NFTs has dropped by 48% from November highs in recent weeks. In March, trading volumes on OpenSea, the largest NFT marketplace, have been around $50 million so far, a far cry from last month’s $248 million high. The number of accounts purchasing and selling NFTs every week has decreased as well, from 380,000 in November to 194,000 in December.
What’s at stake… Customers of Web3 businesses place a great value on actual ownership of their virtual property, as observed by the Yuga Lab’s positive responses received for providing CryptoPunk owners the chance to earn from their avatars. In addition, commercial rights motivate NFT communities to innovate with and add value to the IP they own. Thus companies like BAYC, Nouns, and CryptoToadz will likely see deeper engagement from their communities in the long run than those that don’t.