CryptoPunks is a non-fungible token initiative built on the Ethereum blockchain that dates back to the early days. Ten thousand 24x24-pixel photographs with random features like the individual wearing a beanie or puffing smoke are part of the project.
Despite the fact that a CryptoPunk NFT was initially free to obtain (apart from a transfer fee), the digital pictures' scarcity and the rising demand for NFTs have caused their price to soar. However, there were only 9,000 CryptoPunks were made available to the general public, and Ethereum wallet users grabbed them up. As a member of a series of 10,000 NFTs known as CryptoPunk, the NFT in question is CryptoPunk. These are pricey because they're the OG NFT collection. Between $350,000 and $500,000 is the typical price range, however some can command millions of dollars.
Whoever is responsible for this transaction acquired the Cryptopunk from themself. NFTs are stored in digital wallets, just like Bitcoin. There's no limit to the number of wallets a person can have at any given point in time. They transferred NFT from one wallet to another. For $532 million, Wallet C purchased the NFT from Wallet B—and instantly returned it to Wallet A.
What's the point of having three wallets if you could just transfer money from one to another? A "flash loan" was used to borrow money from others rather than the buyer paying for the transaction out of pocket. Decentralized finance tool Flash loans allow you to lend large sums of cryptocurrency only if the conditions of a smart contract are met, which is the essence of it. To get the loan, you'd need an interested buyer who'd be willing to pay enough to cover the loan interest and the loan's principal, as well as earn a profit. In this case, the buyer and cryptopunk owner were the same person.
What Sparked the Creation of CryptoPunks?
It was developed by Larva Labs, a two-person development firm that works on anything from mobile games to web infrastructure to digital art and design. Inspired by the London punk scene and cyberpunk literature and movies, the group created a pixelated character generator.
Each character was unique, and the data was stored in 2017 on the Ethereum blockchain. A CryptoPunk may be claimed by anyone who wanted one. Before NFTs and DeFi took off, they would simply have to pay the gas fee to cover the processing power, which was far lower. Most of the remaining images were promptly snapped up by Larva Labs customers. You can only buy a CryptoPunk directly from its owner at this time.
What sets CryptoPunks apart from the rest?
The uniqueness of the CryptoPunks project can be attributed to a few factors.
This is one of the earliest NFT projects on Ethereum, so that's a big plus right there. CryptoKitties, a blockchain game/NFT project, was in the works for months before its official launch in November. It has merit since it is one of the earliest efforts of its sort.
Second, there will only ever be 10,000 CryptoPunks. This fosters a sense of urgency among collectors.
Depending on their characteristics, some CryptoPunks portraits could be more valuable than others (or lack thereof). One hundred and forty-four aliens and twenty-four apes are in the group; just nine wear a beanie and 24 apes are in the group. Eight CryptoPunks have no distinguishing characteristics, while one (CryptoPunk #8348) has seven.
With so many unique qualities, a CryptoPunk can command a high price. More than $7.5 million was paid for CryptoPunk #7804, a picture of an alien (9-year-old) with little sunglasses (378), a cap (254), and a pipe (317).
But the value of a CryptoPunk isn't only based on its rarity. Collectors may want a portrait just because they enjoy the way it looks.
Buying an NFT from CryptoPunks
A cryptocurrency wallet like MetaMask is required before you can purchase an NFT on NFT marketplace. Anyone can see the contents of your wallet on the blockchain, but only you can access it.
Ether(CRYPTO:ETH) is needed after you've set up your wallet. Either use the wallet's service to purchase the token, or send Ether from an exchange like Coinbase (NASDAQ:COIN) to your wallet's address.
Use the browser extension to connect your wallet to your browser and get the most out of it.
To buy a CryptoPunk, you must have Ether in your possession, figuratively speaking. Larva Lab's website has CryptoPunks for sale. Click on the CryptoPunk you want to buy and then click the Purchase button on its page when you've found it. You'll be prompted to connect your wallet and confirm the transaction by your browser's notification.
NFTs will appear in your wallet after you confirm the transaction and send the Ether to the seller.
What is the future of CryptoPunks?
During the COVID-19 pandemic, collectors' artifacts soared in value and interest in cryptocurrency and other blockchain initiatives skyrocketed. It was the perfect storm to send prices skyrocketing through the roof. For example, Beeple's Everydays, a digital art collage sold for $69 million at Christie's.
It's all about supply and demand when it comes to the pricing of a CryptoPunks portrait. Investors in NFT must decide if they believe demand will rise further or if we've already reached a peak now that supply is fixed.
A huge acquisition has been made by the Yuga labs behind the highly successful NFT project Bored Ape Yacht Club: Larva Labs' NFT series CryptoPunks and Meebits.
After being sold at Christie's and Sotheby's auction houses, some CryptoPunks may move from the fringe to the mainstream art market. NFTs could attract new buyers as a result. According to what I understand, the crypto art/tech initiative is already well-known to those interested.
In other words, it's possible we've already reached the NFTs' maximum demand. It's still feasible for individual CryptoPunks with desired features to maintain or rise in worth even if the broader market is less valuable than it was at the height of its value.