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A Brief Explanation On CryptoPunks

Who Created CryptoPunks?

Matt Hall and John Watkinson are the founders of the New York-based software company Larva Labs, developed a software application in 2017 that could generate thousands of diverse and strange-looking characters. They initially believed they had the makings of a smartphone application or a game application. Instead, they came up with a paradigm-altering strategy for the digital art market as well as a challenge to the very concept of “ownership”.

What are CryptoPunks?

CryptoPunks constitutionally are art images with a resolution of 24x24 pixels. In addition, these are largely punk-looking people with some unusual variety of genres thrown in for good measure. Impressionists, Apes, Aliens, and Zombies are among the several genres. The most realistic and fascinating fact is that each punk is one-of-a-kind which is why these CryptoPunks are so precious in the NFT market call- it’s a brand-new approach to Asset Tokenization. You can view each punk’s official webpage to learn what features or traits they hold as well as their current market value.

CryptoPunks Attributes

How does CryptoPunks work?

The ERC-721 token protocol which is now used for NFTs did not exist at the time of the introduction of the project. Larva Labs had no choice but to work with what they had i.e., ERC- 20 protocol. The team ended up changing the ERC-20 code just enough to generate non-fungible items in a punk fashion which served as motivation for the development of the ERC-721 shortly after.

How are CryotoPunks valued?

Several factors determine the value or price of an NFT. Thus, the following are the most important elements to consider while pricing CryptoPunks:

  1. Supply and demand: Currently, only 10,000 CryptoPunks are available, and each one is unique. As a result, CryptoPunks are extremely rare as the popularity of NFTs is growing each passing day, the demand for them is growing faster than the supply resulting in a CryptoPunk scarcity. Scarcity is frequently followed by price hikes, resulting in a new equilibrium. Because inflation is unlikely, you should always keep in mind that the value of CryptoPunks may continue to rise.
  2. Type of NFT: CryptoPunk’s estimated value is influenced by the type of NFT used. In-game assets real-world tokenized items such as documents, virtual real estate, and collectibles are all examples of NFTs. Some NFT kinds are more popular than others; CryptoPunks are collectibles making them one of the most popular ERC-721 tokens. As a result, they are more likely to have a high value.
  3. Rarity: CryptoPunk’s value is mostly determined by its rarity. It is strongly tied to the limited supply aspect but it is also determined by the punk’s characteristics and type. For example, because Alien punks are extremely rare, they are often more expensive. Out of the 10,000 punks available, there are only nine alien punks. As a result, you should consider the rarity of a CryptoPunk while determining its value.
  4. Whale owners: When CryptoPunks originally came out they were completely free. Some investors took advantage of the situation and acquired a large number of CryptoPunks right away. The issue is that some of these CryptoPunk whales have been dormant for quite some time and because they may not be aware of the current market value, they may sell them for a considerably cheaper price (which would have been relatively high three years ago). This could disrupt the supply-and-demand equilibrium by potentially lowering the value of these items. When evaluating digital art, make it a note that whale owners may disrupt the typical price of a piece either purposefully or unintentionally.
  5. Liquidity: When it comes to investments, token liquidity is one of the most crucial aspects to consider. When a token’s price rises dramatically then its liquidity falls simultaneously. This applies to fungible tokens as well as NFTs. Transactions become inefficient when fungible tokens are used. Liquidity for NFTs is vital especially in the long run because you might have to convert your ERC-721 tokens into ERC-20 tokens by depositing your NFTs into a liquidity pool. As a result, you should be conscious of your CryptoPunks collection’s liquidity particularly in the long run.
  6. Value Estimators: You can utilize online NFT value estimators if you don’t want to go through each value determinant one by one and just want an estimated value for a CryptoPunk right now. These websites take into account all of the aforementioned elements and present you with an estimated NFT token value. For example, DappRadar is one of the most accurate and best NFT value estimators for digital art. All you have to do is paste in a CryptoPunk’s URL or NFT ID, and DappRadar will calculate an estimated value for you.

Is CryptoPunks a good investment?

CryptoPunks has piqued the curiosity of a growing number of investors in the last year and with good reason. Following the advent of the NFT subculture, the average CryptoPunks value has surged. Many portfolios increasingly include digital assets as a mainstay. The market has gotten frantic since CryptoPunks were handed away for free in 2017. The value of these tokens is rising every day putting CryptoPunk investors in control of a rare and precious asset.

How to Purchase CryptoPunks?

While purchasing CryptoPunks may appear hard and find it complicated at first, but it’s very easy. The following steps will guide you on how to purchase CryptoPunks:

  1. The first step is to choose a Crypto exchange; then, you must buy ETH and transfer it to your Ethereum wallet.
  2. In the next step, you’ll also need a MetaMask wallet as you will be using the Ethereum network
  3. Go to Lava Labs and link your MetaMask wallet once you’ve successfully moved your ETH into it.
  4. After you’ve connected your wallet, you’ll be able to choose a punk and buy it. Remember, you may require more ETH to trade a punk because of the gas expenses associated with such services.

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