Opinion: How to Kill Your NFT Project, Larva Labs Edition
Once the world's most sought-after NFT collection, CryptoPunks has fallen out of vogue over the last few months. A series of blunders from Larva Labs hasn't helped.
Key Takeaways
- Larva Labs is the creator of the iconic CryptoPunks NFT collection.
- The design studio also launched a collection called Meebits last year, banking $80 million in a day.
- Larva Labs has taken a hard stance against CryptoPunks copycats and recently taken controversial action against V1 Punks born out of the original CryptoPunks smart contract.
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The CryptoPunks community is growing increasingly frustrated with Larva Labs. Crypto Briefing‘s editor Chris Williams explains why.
How Larva Labs Tarnished Its Reputation
Throughout last year, I spent a lot of time cursing at all of the NFT blue chips I missed (the Crypto Briefing team is well aware of this; I talked about it enough on our daily calls). Of all the stuff I failed to pull the trigger on, I was most disappointed about CryptoPunks—it was such an obvious trade after that Beeple auction, so it didn’t really come as a shock when they were going for reasonably sized house prices over NFT summer.
But more recently, CryptoPunks have fallen out of favor, leaving me less salty about my miss. There are many reasons for the project’s fall from grace, including its community of occasional close-minded snobs who struck it lucky by being early to Ethereum, and a certain collection of apes that’s caught the attention of Paris Hilton and Jimmy Fallon. But the biggest reason CryptoPunks has lost its crown is down to its creator, Larva Labs.
For those not aware, Larva Labs is a design studio formed by Matt Hall and John Watkinson. A pair of creatives who had previously worked on mobile apps and projects for companies like Android, they released the now iconic 10,000 pixel art Punk characters for free back in June 2017, long before anyone had to deal with whitelists or any other pre-mint shenanigans. Similar to other key crypto projects like Bitcoin and Yearn.Finance, the fair launch played into CryptoPunks’ wild success. It was also very early; by the time The New York Times and TechCrunch were writing about NFTs in 2021, CryptoPunks were already historical artefacts. Christie’s and Sotheby’s auctioned them, Jay-Z and Visa bought their own, and, well, we all know what happened to the floor prices after that.
But even as CryptoPunks cemented its place as a cultural gem, Larva Labs managed to tarnish its reputation on multiple occasions. Hall and Watkinson dropped an uninspiring project called Meebits at the May top and set a Dutch auction starting at 2.5 ETH—around $8,000 at the time—knowing that people who were priced out of Punks would buy into the hype (in fairness, Punk holders could mint a Meebit for free). They made $80 million in a day. Nothing has happened with Meebits since then, and the collection has underperformed every notable NFT avatar project in price terms.
They also signed a Hollywood deal that would allow for their NFTs to be used on the big screen. Though Punk holders applauded the move, it was a warning of what was to come: around the same time, the pair got more aggressive in issuing copyright takedown notices to the various Punk knock-offs that surfaced on Ethereum and other blockchains.
Most recently, Larva Labs has taken issue with V1 Punks, a set of algorithmically generated Punks that are almost indistinguishable from those in the main collection (unlike their more famous tokenized cousins, V1 Punks have a pink background). V1 Punks were born out of the original bugged CryptoPunks smart contract, and while Larva Labs scrapped them back in 2017, a community has since formed around them by wrapping them as ERC-721s and acknowledging their OG status.
Larva Labs doesn’t like how V1 Punks have grown in popularity as it apparently ruins the main collection’s prestige. As Cobie summed up well this week, while Hall and Watkinson usually take a back seat from any form of community building, they recently responded to the latest V1 Punks rally by dumping 210 ETH worth on the market and going all guns blazing on copyright charges. In a Discord post, Hall said he wants to stop V1 Punks from using the CryptoPunks name or artwork. Curiously, he then added that the 210 ETH would go to the Rainforest Foundation.
CryptoPunks command a floor of about 69 ETH today—obviously I wish I owned one. However, they’re far from the most valuable NFT avatar out there these days. That title goes to Bored Ape Yacht Club, the celebrity-endorsed collection that’s seen a meteoric rise by embracing Web3 values. The team behind the project, Yuga Labs, gave its holders copyright ownership and lucrative airdrops, partnered with global powerhouses like Adidas, and will soon issue a token. As I noted the week after Bored Ape Yacht Club launched, maybe Larva Labs could have learned something from them.
Don’t get me wrong: CryptoPunks will probably have huge historical significance, and I wouldn’t be surprised to see the entry price for a Punk soar in the future. But that’s assuming its creator doesn’t completely kill the project’s legacy first.
Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies. They also had exposure to YFI in a cryptocurrency index.
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