While it’s widely considered one of the most popular NFT brands online, Larva Labs’ CryptoPunks has become embroiled in some blowback from its community this week.
To be more specific, the challenges come from its vaguely described and rarely discussed NFT copyright Licenses.
Introduced by the CryptoPunks team back in May 2019 as a means of providing provable ownership, for owners of NFTs handed out for free by the team in 2018 – they would find themselves separated from those who were given licenses.
In total, Larva Labs gave out 10,000 NFTs for free to its community. The catch was that these NFTs had no written content licenses.
Why that matters is simple: the NiftyLicense (the kind the team uses), provides holders with clear control over the NFT/s they own. Under a NiftyLicense, holders and creators would have more freedom to monetise their work and assets.
“The NFT License offers a more practical middle ground. We hope the NFT License provides a framework for blockchain developers to establish sustainable businesses and offer them a secure path to monetization, much like the App Store did for early third-party developers.”
NiftyLicense website.
The consequence for early HODL-ers? No license; and with no license, they don’t have the same kinds of protections.
Having, at one time, been described by the auction company Christie’s as “the alpha and omega of the CyptoArt movement.” But now, the same thing designed to give users more assurance of unique ownership is contributing to a bigger knock-on effect.
The knock-on effect is a significant hit to user confidence and the brand’s development team, as one Twitter user summarised:
CryptoPunks: Dropping confidence and market cap
While the question of licensing and copyrights has been going on for a number of years, it hasn’t helped investor confidence. Another Twitter user – @spr3adsh33t – shows the downward trajectory of its transaction volume. Breaking past its 80 ETH lower support (to use an investing term), it has continued to fall over the past couple of months.
Users online are already speculating that this broader drop in the CryptoPunks market paves the way for NFT competitors. For example, its closest rival, Bored Ape Yacht Club, could see itself taking pole position; what the former’s community is referring to as ‘the flip’.
Even with these twinned issues in mind, does it really spell decline? Keep in mind that it was only yesterday that CryptoPunk #9684 sold for over $528k (126 ETH), and the market continues to show fast activity.
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