A new CryptoPunks license is finally live. Here’s why it matters

CryptoPunks, one of the most prominent legacy collections in the NFT space, recently released a new IP rights agreement for the collection. The new IP rights agreement will offer IP licenses to all CryptoPunks holders, a move that CryptoPunk’s Twitter account hopes will “open the door to endless creativity and possibilities for Punks.,” according to a tweet from the Yuga Labs-owned NFT collection.

CryptoPunks can inspire a new generation

With several notable figures in the entertainment industry such as Jay-Z, Steve Aoki and Heidi Klum among the highest profile CryptoPunks owners, it is only a matter of time before future projects feature traditional media with CryptoPunks characters.

And amazingly, the priority for this is already established: Enter Yuga Labs’ other marquee IP: Bored Ape Yacht Club. Many Apes-themed projects have been launched since Apes first hit the scene – and the public crypto consciousness – in March 2021.

In 2022, we saw the Bored Apes “play” at Major League Soccer’s 2022 All-Star Game and feud with hip-hop legends. However, since Yuga Labs took over management of Punks in March 2022, it is very likely that the future of Punks as an IP will take a similar path forward.

Break down CryptoPunk’s ownership

So what does it mean to own a CryptoPunk NFT now, in the wake of the new IP rights deals? First, CryptoPunk NFT holders have the “exclusive right to hold, sell, transfer and perform blockchain transactions involving [their] CryptoPunk NFT[s]”, according to the published license terms. What Yuga Labs do however, the IP in each user’s CryptoPunk is unique.

As the owner of this IP address, how CryptoPunks is used in derivative works is at Yuga Labs’ discretion – as is any artwork or media that contains CryptoPunks-inspired art or characters. The new license terms state that just like buying a Bored Ape, buying a CryptoPunk gives you, the buyer, the rights to commercialize your new NFT via the creation of derivative works.

You read that right: Exclusive, royalty-free and sub-licensable. No commitments. You can do whatever you want with your new NFT; that much is the clear message. But there’s a catch behind the cacophony: You can’t (and really shouldn’t) use your punks to create hateful, discriminatory content. It’s not punk rock at all.

Of course, these rights only apply while you own the CryptoPunk in question. Should you decide to sell your CryptoPunk, but circle back to wanting to create something based on your just-sold NFT, you will need to come to a licensing agreement with the new owner. That’s where the sublicensing bit comes into play. Theoretically, any CryptoPunk NFT can now be turned into derivative works, provided the owners agree to the terms of sublicensing. Specifically, as part of the new IP rights agreement, CryptoPunks holders who create works based on their Punks will then own the IP of those derivative works.

Yuga Labs Rises Ahead Despite Mixed CryptoPhunk Reception

This is a huge development. In previous years, the rights granted to CryptoPunks owners could best be described as dubious at best. During the massive bull run of the NFT space through 2021, many projects were launched with clear inspiration from OG Punks – with varying degrees of consequence. Pixel Vault launched the PUNKS Comic during this time, which featured detailed, fully illustrated versions of the original pixelated punks. With the project recently turning to putting Bored Apes through the same stylistic filter, all seems well in GFunk’s zine-like world.

But the same cannot be said about other projects.

With the bull run also came projects such as CryptoPhunks. The only starting point with the original collection of pixelated punks? These punks face left, “because the other way just doesn’t feel right,” according to a description on OpenSea.

Projects like these left several members of the CryptoPunks faithful a little confused. For example, well-known CryptoPunk enthusiast Spottie Wifi has archived a DMCA takedown request to have the CryptoPhunk NFT that matched his own OG Punk removed from the market.

Hopefully, Yuga Labs’ granting of commercial rights to holders of this legacy collection will encourage continued construction in the space. As innovation continues to be the prevailing currency of the NFT space amidst the ongoing bear market, we look forward to new CryptoPunks themed projects moving down the line.