Breaking Down V1 CryptoPunks: The First CryptoPunks Release

January 15, 2022 - 10 min read

This project deep-dives the little-known first release of CryptoPunks now known as Wrapped CryptoPunks V1. CryptoPunks V1 is the original CryptoPunks NFT released by LarvaLabs in 2017 but was quickly paused and deemed inauthentic by Larva Labs after it was discovered that when someone bought these Punks, they could withdraw their own funds, effectively stealing the Punk NFT.

Breaking Down V1 CryptoPunks: The First CryptoPunks Release

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Updated: 3/10/2022

Introduction 

Despite the fact that NFTs have only been around for about 8 years, the space is full of rich history. So rich in fact that there are NFT Archeologists dedicating all of their time to uncovering and documenting the details of historical projects. 

The space is so new that we’re still learning about projects released years ago and the history of those releases. 

This article breaks down a very little-known release of CryptoPunks, now known as Wrapped CryptoPunks V1 or Classic Punks (as noted on LooksRare.org). 

Wrapped CryptoPunks V1 was released before the CryptoPunks project we all know but was shut down due to a contract issue. 

A few weeks ago, I broke down the top 10 NFT Discord Groups to join and #5 on that list was a group called NFT Archeologist run by Adam McBride

I first heard of V1 CryptoPunks in this Discord group (one that I highly encourage you to join and learn) and I couldn’t wait to dig in. 

NOTE: I do not own any CryptoPunks V1. This is not financial advice. Please do your own research. 

Quick Links for CryptoPunks V1: 

Discord Group

Purchase CryptoPunks V1 (Wrapped) on the V1 Marketplace

Purchase CryptoPunks V1 on Rarible

Purchase CryptoPunks V1 (Wrapped) on LooksRare

Link to Etherscan Contract

Detailed Twitter Thread on Faulty Contract Explainer — Massive shoutout to 0xfoobar for putting this together. 

Original Contract

August Reddit Thread

What Are CryptoPunks V1? 

CryptoPunks V1 is the original CryptoPunks NFT released by LarvaLabs in 2017 but was quickly paused and deemed inauthentic by Larva Labs after it was discovered that when someone bought these Punks, they could withdraw their own funds, effectively stealing the Punk NFT.

Take a look at the Wrapped (more on why they’re wrapped later) CryptoPunks V1 on LooksRare.org and notice the red diagonal stripe to differentiate from the second CryptoPunks release: 

CP V1 Assets

LooksRare.org

2017 was early for NFTs, and that meant kinks needed to be worked out. 

Credit to Foobar for the following information about the contract. Foobar explained this in a Twitter thread and showed how the original CryptoPunks contract allowed for the buyer, not the seller to withdraw the money. 

For example, if I bought your V1 CryptoPunk for 1 ETH, you could then withdraw that 1 ETH and repeat the process. 

Below is a screenshot of the V1 contract, in which Foobar pointed out that a critical line “offer.seller” is overwritten and the purchase amount goes back to the sender: 

ContractV1

Source: Twitter.com

Larva Labs corrected the contract and released the CryptoPunks we know today: 

ContractV2

Source: Twitter

The official Punks have a $200,000+ floor, and up until recently, Wrapped V1 CryptoPunks didn’t have a marketplace that would list them (Opensea banned the sale of the assets, but you can now sell Wrapped V1 CryptoPunks on the platform). 

However, since LooksRare allowed listing of Wrapped CryptoPunks V1, the floor is at 3 ETH (~$9,900) and there’s been 35.55 ETH of sales volume ($117,315). 

Note: LooksRare only launched a few days ago. 

Update: the floor of CryptoPunks V2 is now over 13 ETH as more and more people are discovering the project.

What is the Supply of CryptoPunks V1? 

CryptoPunks has a supply of 10,000 NFTs. Despite the misstep, the contract confirms 10,000 held across 116 holders: 

SupplyandDistro

Source: Etherscan.io 

I’ve written before how to check the distribution of an NFT project step-by-step here, but we can see who the biggest holders of V1 CryptoPunks are and how many they own: 

TopHolders

Source: Etherscan.io 

Note: One holder is “Autoglyphs Deployer”: AutoGlyphs is a Larva Labs (LL) project, and Larva Labs confirmed in a tweet that 1,017 are originally held back by LL. 

Larva Labs doubled down on not liking or supporting V1 CryptoPunks and cryptically said that they own 1,000 of them, for us to draw our own conclusions and any proceeds will be used to purchase "real" CryptoPunks.

Larva Labs effectively warned that they would sell their 1,000 CryptoPunks V1:

Larva Labs V1 CryptoPunks

Source: Twitter

Despite Larva Labs saying these aren't real, this version of CryptoPunks technically pre-dates CryptoPunks that currently have a 62.5 ETH floor ($206,356). 

However, despite the awesome history, the distribution of these tokens is concentrated amongst a few older who can effectively control the market and price. 

I’ve analyzed other projects with similar distribution issues, and when the prices started to really pump, those who held large amounts of the asset dumped on the market to take prices, effectively driving the price down and scared the market. 

Why Do You Need to Wrap a CryptoPunk V1 and How Do You Do It? 

You need to wrap CryptoPunks V1 to collect the proceeds if you sell it and you can head to www.classicpunks.com to wrap the asset: 

Wrap

Source: ClassicPunks.com

This is why the collection on LooksRare is named “Wrapped V1 CryptoPunks”. These are V1 Punks wrapped in a new contract to prevent the exploit. 

Multiple historical projects have needed a wrapper, including CryptoStrikers (2018 Soccer NFT) and Curio Cards (the first art NFT on Ethereum), which sometimes confuses people. 

Whoever still holds CryptoPunks V1 tokens can use classicpunks.com to wrap the asset and sell on Looksrare.org. If multiple wallets wake up, the supply for sale could rapidly increase. 

How Will Larva Labs Selling Their V1 CryptoPunks affect the market?

Larva Labs has started to sell their V1 Wrapped CryptoPunks, but not in the most transparent fashion:

Larva Lab Twet

Source: Twitter

From my perspective, Larva Labs created the project and can do whatever they want with it. If they want to sell, they can sell. However, the market has its own right to react to what they do.

I have not personally confirmed that this is the co-founder of Larva Labs' wallet, but below are the Etherscan transactions:

Etherscan

Source: Etherscan

And here are some of the sales for the wallet:

Larva Lab Sales

Source: OpenSea.io

They have sold over 70 Wrapped V1 CryptoPunks so far for anywhere from 5.7 ETH ($14,929) to 10 ETH ($26,192).

I anticipated that Larva Labs would burn their 1,000+ V1 CryptoPunks, but this would have reduced supply and created more scarcity, with a likely increased price.

Instead, they've chosen to sell and stated in their Tweet that they would buy CryptoPunks with the money. It will be interesting to see if this actually happens.

Larva Labs called more attention to V1 CryptoPunks and I would expect the prices to keep rising. Remember, distribution is not great V1 CryptoPunks so a supply shock may bring prices down, but Larva Labs is fueling drama that could spike up demand.

The general vibe and culture of NFTs are anti-establishment, so an establishment coming out and saying something they created isn't real (because they fumbled the contract) is only going to fuel more interest.

It is also clear that Larva Labs claimed to be the first NFT on Ethereum, which was later debunked.

The reality is that Larva Labs doesn't get to decide for the market. They aren't trying to, but just because they don't like V1 CryptoPunks, does not mean everyone will feel that way. Christie's may not ever auction V1 CryptoPunks because of this, but I think that makes the collection even more appealing.

Andy Warhol once said "Don't think about making art, just get it done. Let everyone else decide if it's good or bad."

The same applies here. The market will decide, and we will be along for the ride.

Shout out to NewbieCollector for calling my attention to this.

What’s Next for CryptoPunks V1? 

Ultimately, the market will decide which Punks project is more valuable, and currently, the official Punks collection with a corrected contract is what the market values. 

However, the market could be big enough for both projects, with a faction valuing one series over another. CryptoPunk V1 also offers a more affordable entry point for those who want to own a Punk from 2017. 

There are a few things to consider before buying: 

(1) Distribution — these tokens (NFTs) are poorly distributed with only 116 holders across 10,000 assets. Some of these tokens could be lost in old wallets, but if the floor increases enough, those wallets might wake up. There may be 1,017 assets that were held back by Larva Labs. 

(2) Misprints Usually Create Value Through Scarcity — misprints in the rare coin industry hold significant value, but it’s usually due to a lower supply of those misprints. 

The same typically happens in sports cards. Let’s look at the 1990 Topps Frank Thomas “No Name” Error (his name is missing from the front of the card): 

FrankThomasNoName

Source: Cardladder

There are just 19 copies of this card in a PSA 9 (despite it coming out during the junk wax era that overproduced cards) and last sold for $17,220. 

However, there are 3,169 PSA 10 copies of the non-error card, and one last sold for $86: 

FrankThomasName

Source: Cardladder

In this case, it’s clear the value is driven by the scarcity of the misprint, not the misprint itself. 

(3) History Matters — No one can predict the future, but history is history and it will always be part of the conversation. The very reason CryptoPunks are so valuable is that they were marketed as the first NFT on Ethereum, which was later adjusted to the first Profile Picture Project on Ethereum as older projects were discovered.  

(4) Market Attention could take a long time 

It took years for CryptoPunks to grow in value after they were given away for free on June 23rd, 2017. 

In the first 5 months, there was $170,000 in sales (less than the current floor price of one Punk): 

First Sales Tweet

Source: Twitter

This was far before the NFT boom, but a CryptoPunk sold for $37 in September of 2017: 

Sales Bot Integration

Source: Twitter

If you plan to buy, would you be willing to wait years to see if enough awareness is built up about the release? 

Larva Labs is certainly helping to speed up this process. At a 13 ETH floor, CryptoPunks has grown faster than I thought it would.

(5) There’s a lot of collectibility and I predict that a group of people will become fascinated by this “alternative rookie card” CryptoPunks, but it will take time 

There are plenty of sports cards that were unlicensed, off-the-beaten-path, and developed a collector community behind them. They aren’t the most valuable cards in the market, but they’re often five-figures and belong to a club that knows the history so well it feels exclusive. 

A lot of people don’t know about V1 CryptoPunks, even some notable people in the NFT space. 

I’d anticipate that holders of the official CryptoPunks project wouldn’t support V1 both because it hurts their value proposition but also because LarvaLabs (and OpenSea later on) do not support it as an official project. 

It creates a niche market, which I’m fascinated by, so make sure to do your own research and develop your own conviction. 

Jon Torrey

written by

Jon Torrey

NFT Enthusiast

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