While CryptoPunk’s NFT holders get commercial rights, Yuga hopes to secure their “legacy as works of art”

CryptoPunks are iconic in the crypto world, and the project spurred countless imitators as it popularized tokenization NFT Profile pictures. But with a new owner in the form of Bored Ape Yacht Club creating Yuga Labs, we’re starting to get a sense of how the new steward plans to expand the utility of Ethereum NFTs and push the brand forward.

Yuga Labs acquired CryptoPunks and Meebits properties from the original creator Larva Labs in March, along with a significant stash of NFTs from both collections. In June, the company hired Noah Davis, who previously led digital sales at auction house Christie’s and sold Beeple’s $69 million NFTto oversee the future of CryptoPunks as a brand leader.

Davis told Decrypt that the opportunity was originally presented to him by Guy Oseary, the veteran music industry executive and former record executive who represents Yuga Labs. Oseary was vague about the position at first, but assured Davis it would be a job worth taking. When Davis heard all the details, he agreed.

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

He has spent the past few weeks meeting with CryptoPunks owners to discuss their feelings about the collection, which has yielded dozens of NFT sales of at least 1 million dollars each-and over 2.3 billion dollars worth of trade to date, despite being free to craft at launch in 2017.

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

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

“We wanted to make sure that with the license we give to punks, we expand into some of these newly defined gray areas,” Davis said, “and provide more protection where we can and more explicitly describe what it is that the license is doing, and also what it does not do.”

Several NFT projects have struggled to secure commercialization rights over the past year, a process Davis describes as a “whirlwind shitshow for everyone.” He said 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 match the new Punks and Meebits terms.

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

A representative from Yuga Labs was asked for more details on how the specific model works Decrypt to “refer to the full license once issued 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, everything else is fair game for holders to make and profit from.

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

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

It wasn’t 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 release 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 biggest complaints among holders, as Larva Labs had previously debated whether or not to grant such rights. A prominent holder, the pseudonymous 4156, finally sold his CryptoPunk (#4156) in December 2021 for over $10 million in ETH after dissatisfaction over IP rights.

‘CryptoPunks as art’

Solving the bubbling complaint is part of Yuga’s CryptoPunks plan. Another, Davis said, is to provide opportunities to better connect the community of holders, addressing another common criticism that Larva Labs had been too hands-off in the past.

“The community is the utility,” Davis argued, 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 truth to the statement, and finding new ways to connect and engage owners is one of his top priorities.

“It’s pretty clear that CryptoPunks [holders]overall, are some of the most talented builders, storytellers and creative people in Web3,” said Davis Decrypt. “Reinforcing the 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, which means Yuga doesn’t get a cut of secondary sales at the moment.

Yuga recently changed Meebit’s royalty 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 the idea right now is not to focus on making CryptoPunks another golden goose — because there are already a few golden geese out there for Yuga,” Davis said. “In the long term, of course, it will be part of the agenda and perhaps the internal roadmap.”

Yuga’s purchase of CryptoPunk’s 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 teaser trailer for the game, but Davis said they’re grappling with questions about how punks fit into a Bored Ape-centric world.

“Punk was coined in 2017, created a long time ago in crypto time – decades in crypto time,” he said. How they’ll ultimately be represented in Otherside remains an “open question,” he added, saying he’s “gathering the vibe” from Punks owners he talks to.