CryptoPunks: The Mona Lisa of the NFT Realm? Sales Have Exceeded $1 Billion

Content: An, Penny

Editor: Overseas Unicorn Team

Typesetting: Ou Jun CryptoPunks is a pioneering project in the NFT space.

It is a series of 24x24 pixel-style character images, totaling 10,000, each with unique features.

As one of the first well-known non-financial projects, the founding team of CryptoPunks, Larva Labs, developed the ERC-721 digital collectible token standard, inspiring many crypto artists. The project became more popular in 2021, with some punk images selling for millions of dollars, making them some of the most expensive NFTs.

On August 28, the historical sales of CryptoPunks exceeded $1 billion, with total sales currently at $1.26 billion, slightly lower than Axie Infinity's $1.6 billion. Just a week earlier, on August 23, American payment giant Visa announced on Twitter that it had purchased an NFT from the CryptoPunks series for approximately $150,000, with the item number 7610.

Subsequently, Visa released an NFT white paper titled "NFTs - Engaging Today's Fans in Cryptocurrency and Commerce." This also represents Visa's view on NFTs: that they will play an important role in the future of retail, social media, entertainment, and commerce.

What exactly is CryptoPunks doing? As the first non-fungible token work in history, why did CryptoPunks surpass $1 billion in sales? Why have the wildly popular NFT avatars become a new cultural paradigm? This article will discuss the development of CryptoPunks and the storage value and social capital represented by NFTs.

1. A Brief History of NFTs

Before understanding CryptoPunks, let's quickly review the rise of NFTs.

NFT stands for Non-Fungible Token. The power of NFTs lies in their ability to make digital assets scarce. Scarcity gives digital assets value, just like rare cars, artworks, or rare stamps. Without a way to prove ownership of the official version, Beeple's Everydays would not have sold for $69.3 million. NFTs began to appear in CryptoKitties in 2017, but they truly took off at the beginning of this year. Beeple and NBA TopShot led this wave as BTC and ETH soared to historic highs. The new wealthy in crypto did what the rich do: buy art. NFTs received incredible attention. In April, cryptocurrency prices fell, and NFTs cooled down as well. Skeptics murmured, "Look, when people start paying millions for JPEGs, I knew it was a bubble!" In June, many websites and blogs mentioned a 90% drop in trading volume. "NFTs peaked on May 3, selling $102 million worth of NFTs in a single day." However, the party officially ended: "But according to data analyzed by Protos, NFT sales in the past week were only $19.4 million."

But interesting things happened in June and July. NFTs made a roaring comeback. In the past 24 hours, only two markets—OpenSea and Axie Infinity—traded NFTs worth $106 million.

According to DappRadar, the trading volume of the top ten NFT markets in the past 30 days was $1.86 billion. This time, it seems that NFTs are driving up the prices of ETH and BTC, rather than the other way around, as these cryptocurrencies rise in price. The U.S. Securities and Exchange Commission, under new chair Gary Gensler, is becoming increasingly interested in regulation, and the proposed Warner-Portman Amendment to the Infrastructure Bill could impact the market.

2. The Birth of CryptoPunks

Larva Labs launched CryptoPunks in June 2017. It is one of the first NFT projects on the Ethereum blockchain. Founders Matt Hall and John Watkinson designed a software program that could generate thousands of uniquely different, bizarre-looking character avatars.

They initially thought these characters could be used in apps or games, but it ultimately evolved into a disruptive innovation in the digital art market and a challenge to the concept of "ownership."

At the project's launch, the ERC-721 and ERC-1155 standard protocols, now widely used for NFTs, didn't even exist. Larva Labs had to use ERC-20, and the team eventually modified the existing ERC-20 code to produce non-fungible tokens, which soon inspired the development of ERC-721. (The difference between the ERC-721 protocol and the ERC-20 protocol is that ERC-721 is non-fungible, meaning each token is unique.) CryptoPunks represents ownership of 10,000 unique generated characters, each CryptoPunk being a simple 24 x 24 pixel avatar. This pixel art has now become a trend, and pixel artist Myoo, creator of the CyberKongz project, commented in an interview:

"Pixel art like this—computer-generated or not—is easy to understand. You don't need to learn art history to know what you're looking at. You either like it or you don't. It's either well done or poorly done. When you only have [limited] pixels to work with, you can't hide a lack of artistic skill, understanding of color theory, or need for contrast. It's so simplified that it either works or it doesn't."

Although CryptoPunks are computer-generated and based on obvious templates, the specific attributes of each character mean that no two are the same. Various hairstyles, genders, accessories, skin tones, and even species appear at different frequencies throughout the scene. This makes some punks rarer than others—also more desirable. There are five types of CryptoPunks: aliens, apes, zombies, females, and males. Aliens are the rarest—only 9 exist; while male CryptoPunks are the most common, with 6,039.

3. Trading History: From a Few Cents to $7.5 Million

When CryptoPunks first launched, the only cost was a small amount of gas required to use Ethereum. Before the DeFi and NFT frenzy pushed gas prices up, transaction fees were typically just a few cents. Early entrants faced no financial barrier.

A secondary market quickly emerged around CryptoPunks, with bidding, purchasing, and selling options directly available on the Larva Labs website. According to a post on BitcoinTalk, by July 1, 2017, the total sales of CryptoPunks had exceeded 176 ETH—close to $47,000 based on mid-2017 ETH prices. The early appreciation of the relative scarcity of specific CryptoPunks saw the two rarest alien types sell for 10 ETH or $2,610 just weeks after the project launched.

According to NFT market data aggregator NonFungible, initial buying activity quickly faded. Although sales dropped significantly in the following months, CryptoPunks continued to change hands. Peaks in daily trading volume for punks became more frequent and pronounced during 2019 and 2020.

Sales of CryptoPunks surged significantly in September and October 2020. Gauthier Zuppinger, COO and co-founder of NonFungible, believes that the sudden rise in demand for CryptoPunks is related to profit-taking behavior during the early speculative frenzy in the DeFi space.

"DeFi is somewhat like a money printer on Ethereum, and many people became millionaires in just a few weeks. Most of the income was stored in lesser-known cryptocurrencies or DeFi tokens, so the best way to reinvest that money and ensure long-term profits was to convert it into other crypto assets. NFTs are definitely one of the target assets for what the industry calls 'DeFi Degens.'"

Since its launch, the peak total sales of CryptoPunks have become larger and more frequent. Source: CryptoPunks | Market History and sales trends | NonFungible.com This logic is often seen in traditional financial markets. A report from Credit Suisse highlighted the significant growth of classic cars, artworks, wines, and jewelry markets after the 2008 financial crisis. Using non-fungible items as a safe haven during uncertain times is common.

The economic instability caused by the pandemic and other factors in 2020 helped drive the growth of the CryptoPunks and other NFT collectibles markets.

Since last year's so-called DeFi summer, the price of ETH has risen from around $370 to nearly $4,000, coinciding with increased purchasing activity in the CryptoPunks market. The rise in ETH prices coincides with increased market activity for CryptoPunks. Source: Ethereum price, ETH chart, market cap, and info | CoinGecko Both the trading volume and trading prices of CryptoPunks have grown rapidly, with total sales exceeding $40 million in May, and sales so far in August reaching $332 million. Before August, the largest monthly sales total was $135.2 million in July. As of August 28, 2021, NFTs have sold for over $1.7 billion in the past 30 days. CryptoPunks has had over 2,800 transactions, making it one of the most valuable assets in the NFT space, with an average price of about $210,000 per Punk in August 2021. The price of CryptoPunks has risen alongside the price of ETH. The surge in total sales prices coincided with the sales of some of the rarest punks. A pair of aliens—numbered 7804 and 3100—are currently the most expensive CryptoPunks. On March 11, two different wallets purchased one for 4,200 ETH (over $7.5 million). This is also the highest sale price for a punk to date. #7804 #3100 According to data provided by dappradar: In all past transactions, the highest single transaction volume has CryptoPunks occupying four of the top five.

4. The Value Storage of CryptoPunks

CryptoPunks is one of the most watched NFTs, and its value storage is reflected in several aspects, including historical significance, scarcity, monetary attributes, and digital collectible properties. Historical Significance Many people consider CryptoPunks to be the original NFTs. Collectors have always been attracted to the first batch of exclusive, rare assets. By definition, CryptoPunks are #1 in NFTs. They were innovative at the time and, to some extent, represent the beginning of the NFT industry.

Based on this logic, other "pioneering NFTs" have also been unearthed, such as an NFT game called Etheria that sold for 70 ETH on March 14 this year—about $130,000, compared to its original price of only 1 ETH in 2015—when it was less than $1.

Another project called MoonCatRescue was also rediscovered, launched just weeks after CryptoPunks—but it did not take off at the time. Many claimed that the forgotten felines were "wrapped" NFTs, a process similar to marking BTC for use on Ethereum—allowing tokens that predated ERC-721 to be traded on OpenSea.

Many new NFTs have flooded the market, but punks are the original NFTs. No matter how many new NFTs flood the market, there will only ever be one set of original NFTs, just as despite the surge in new trading cards and comic books, there is only one first edition of Superman comics. The NFT industry will converge around the pioneers, just as the cryptocurrency industry converges around Bitcoin due to its pioneering status.

Among the earliest Ethereum NFTs, CryptoPunks and MoonCatRescue have historical relevance that many subsequent projects lack. Additionally, they share a common characteristic of fair distribution at the product launch. Any Ethereum user was eligible to apply for NFTs at just the gas price. Like BTC itself, CryptoPunks and MoonCatRescue had no built-in mechanism to reward their creators.

This fair distribution method also led to no entity having the right to acquire most of the initial supply, and NFTs were overlooked and misunderstood by the market for a long time. When punks were relatively cheap, venture capital firms were unlikely to accumulate large positions. Even now, most funds are still struggling to understand NFTs.

Any first-mover NFT collection could be highly valued, regardless of its composition, but punks have many personalities and interesting qualities that make their owners cherish them even more. This emotional value makes owners less likely to sell them. Scarcity Larva Labs limited the total supply to 10,000, and any attempts to generate another set will not be respected by the market as original. Digital collectibles and artworks do not face the same risk of obsolescence as technology platforms.

As pioneers of NFTs, having a captivating backstory is not enough to elevate a project to the legendary status of CryptoPunks. If Larva Labs had not limited the total supply to 10,000, these two alien CryptoPunks would not have fetched $7.5 million, making 7804 and 3100 the rarest in the limited collection.

The supply of original CryptoPunks will forever be limited—just like BTC. This not only eliminates the possibility of future issuance but also eternally memorializes the rarity of each Punk. When commenting on the importance of scarcity and historical significance, the anonymous owner of CryptoPunk 4156 (a type that sold for $1.2 million in February) shared his thoughts in another interview:

"I have several different theories. The most direct is the digital gold/historical significance theory—early works by early crypto artists will be valuable because they are both historically significant and very scarce."

The anonymous buyer of the highest-priced alien CryptoPunk 7804 expressed via Twitter @peruggia_v that CryptoPunks are one of the earliest NFT projects, and any one of the 10,000 CryptoPunks is 21,000 times scarcer than each of the 21 million BTC:

"I may have acquired what will one day be considered the rarest asset at a cost of about $0."

In fact, the actual maximum number of CryptoPunks available for purchase may be less than 10,000. Since claiming ownership of NFTs, several wallets—some holding over 100 Punks—have remained inactive. Many of these may represent lost CryptoPunks, making the supply even scarcer. Any reduction in total supply would put greater upward pressure on the price of CryptoPunks. Monetary Attributes In "Shelling Out: The Origins of Money," Nick Szabo explains that the earliest forms of money were designed as exchange mechanisms to solve the "coincidence of wants" problem, where it was difficult to establish equivalence between the quantity and quality of very different products.

According to Szabo, the oldest forms of money correspond to what are called "collectibles"—beaded necklaces, shells, or certain types of stones, which must be both durable and scarce, either due to natural scarcity or the labor required to create them.

In general, an ideal form of money must have three basic functions.

• Medium of exchange: Money must be widely accepted by people making up an economy as a means of trade.

• Unit of account: Once a currency is widely adopted, the prices of goods in the economy will be denominated in it.

• Store of value: Money must be durable and not lose its purchasing power too quickly.

The prototype of NFTs existed in Bitcoin in the form of colored coins, but the NFT ecosystem did not blossom until Ethereum, whose Turing completeness allowed developers to experiment more freely with new asset types. The first digital collectible experiment proposed on Ethereum was a continuation of Counterparty's Rare Pepes (originally designed for the Bitcoin blockchain), but the project ultimately did not take off until the emergence of CryptoPunks.

Thanks to Ethereum's technological innovations, NFTs like CryptoPunks can be fractionalized, and the fractional pieces can be sold separately. This means that if a rare punk is priced high, the seller does not necessarily have to wait for a whale with the necessary funds to buy it; instead, they can fractionalize it, effectively selling partial ownership, greatly enhancing liquidity.

In fact, NFTs will inevitably be financialized, which will bring potential additional buying pressure to the market. Imagine using a punk as collateral to borrow another asset—this is just a rudimentary example. Ultimately, an NFT index will exist, making them more liquid.

5. CryptoPunks as Digital Art Collectibles

If DeFi attempts to reconnect intangible assets with financial machinery, the NFT and crypto art movement seeks to reshape the financial attributes of media and digital art.

Many criticize NFTs, arguing that one can simply grab an image off the screen to own an NFT. But NFTs are not images; they are symbols indicating that you own the original copy.

A poster of the Mona Lisa has no value, even though it is visually almost identical. A replica of the Mona Lisa, even with perfect brushwork, also has no value because it is not the original. The value of an artwork does not lie in the specific atoms collected in a certain order, but in its historical and social context. Reproducing that item does not matter. What gives collectibles value is not their physical aspects, but the social consensus that you own the original. Decentralized, censorship-resistant blockchains like Ethereum excel at proving ownership and authenticity and enforcing property rights, which would require enormous costs to achieve in the real world.

The same logic applies to digital NFTs. Just because you have something identical to a JPEG anchored on the blockchain does not mean you have a valuable original. Owning the original means you possess its special history and significance within the community. And CryptoPunks is part of the history of the first generative NFT collection on Ethereum. This mindset, which considers digital collectibles to have no value because anyone can copy the image, has led the market to greatly underestimate their worth, completely overlooking the NFT space. Moreover, while digital collectibles have existed for decades (like currencies in World of Warcraft, trading cards in Hearthstone, etc.), they are not good candidates for Store of Value (SoV) because their supply, transfer, and value accounting entirely depend on centralized entities that can and have seized assets for any arbitrary reason. Currently, the average trading price of CryptoPunks is about $210,000. Considering that the value of the NFT market could be as much as DeFi (trillions of dollars), and considering that CryptoPunks is a Schelling point in the NFT space (a term in game theory referring to a choice people naturally gravitate towards without communication), as the first movers, punks have significant room for appreciation, as any growth in the NFT market could translate into price appreciation for CryptoPunks. Achieving a 100-fold return in five years is not impossible.

Some NFTs resemble traditional art, like a painting by Picasso, a song by Beyoncé, or a video uploaded by a YouTube creator. Their curation, purchase, and sale only reference the object itself. Value often comes from who made the item, just as it does in traditional media.

Another insight that CryptoPunks brings us is that digital art does not have to be a singular, beautiful, genius product. Instead, they can be large, distributed programs. CryptoPunks generated 10,000 slightly different pixelated avatars. This was accomplished through a software-based art system that is essentially inclusive. Even if you do not own a "rare" CryptoPunk, you can still have one as a badge of participation in the entire movement.

As the seller of the most expensive punk, 7804, Figma's CEO Dylon Field has started telling others that he owns the Mona Lisa of the digital art world.

"I really think this is the digital Mona Lisa. It is part of my identity; it is a mask. What is a mask? They are objects through which you can project identity. For 7804, this clever alien, I feel a bit different wearing it. After I sold it, I felt it was wrong to keep wearing it. So I had to take it off. I felt very attached to it. Selling it felt like a breakup. I really dreamed about it."

He believes that the question "What is art?" is very fascinating for CryptoPunks because there are different ways to break it down:

First is the algorithmic generation, which can infinitely remix all features, randomly drawing from different images to create 10,000. (They could have had millions.) This is a random collection of punks in the universe, and perhaps that is art.

Additionally, the community itself is a work of art. The ongoing discussions in the market, the community being formed. People care about this project and love its existence. This is the artwork itself; these interactions happen around the punk ecosystem.

So what does it mean to own art? If you look at the Geneva Freeport, it is a warehouse housing nearly $100 billion worth of artworks. If you have something in the Freeport, that is, an artwork, you own the right to possess the artwork, and you have a smart contract in an array, perhaps they are something similar. I think there are similarities to this structure in the existing art world.

6. NFTs and Social Capital

Investment Equals Status In addition to the basic trading heat and historical significance, there are a few more things to understand about CryptoPunks.

• Owning a punk is a symbol of identity, much like owning a Ferrari or an expensive handbag.

• Punk owners often use their punk images as avatars.

• Using a punk you do not own as an avatar is frowned upon.

In an auction in August, 478 people collectively bid on a punk on PartyBid, a new product created by Anish Agnihotri and the PartyDAO team, allowing people to pool resources to bid on NFTs and compete with wealthy whales for millions of dollars' worth of Punks.

Ultimately winning the auction at 1,201.725 ETH ($3.75 million), these hundreds of people changed their avatars on social media to that single punk because they all owned it. PartyBid makes NFTs more social, with a literal party in the early stages, and later an opportunity for hundreds to collectively purchase, own, and manage expensive NFTs. Its social nature is evident on the website. In an article on Not Boring, the author suggests we can understand NFTs through Eugene Wei's "status as a service" theory.

(Eugene Wei is a former product lead at Amazon, Hulu, Flipboard, and Oculus, and one of the best tech essayists on the internet. Every article he writes almost becomes a classic, and his "Status-as-a-Service" written in February 2019 is one of the most widely circulated pieces.)

Status as a Service has two core principles:

• People are status-seeking monkeys.

• People look for the most effective ways to maximize social capital.

Interestingly, humans—these status-seeking monkeys—are now turning to digital monkeys as a means to maximize social capital.

Monkeys are a theme. Two of the four most expensive CryptoPunks of all time, as well as the two most expensive sold in July, are rare monkeys. The monkey-themed project BAYC has become the third most popular NFT since its launch in April this year. Kyle Chayka recently wrote an article titled "Why Bored Ape Avatars Are Taking Over Twitter," in which Matt Galligan, founder of XMTP (whose Twitter avatar is a monkey), stated: "It has become a kind of symbol of identity, a bit like wearing a luxury watch or rare sneakers." If we plot CryptoPunks on the following axis, we can analyze the role of NFTs in social capital, utility, entertainment, and other aspects. (This axis originally comes from Wei's analysis of new social network products.) This is the power of valuable NFTs: they score high in both social capital and utility, while increasingly scoring high in entertainment. They achieve the three elements of social networks.

Social Capital: NFTs are social capital in games that own skins. It is "investment equals status." Owning a CryptoPunk or Bored Ape and often using it as your Twitter or Discord or Telegram avatar indicates something about you—you either got in early, or you are wealthy, or you got in early and are now wealthy. Using high-priced items to increase social capital is not new—look at artworks, expensive cars, yachts, private jets, handbags. It’s just that NFTs are more easily recognizable and public.

Utility: NFTs can serve as investments, tickets to discussion groups, and other functions. Currently, owners of Bored Apes can access the Bored Ape Yacht Club. NFTs like Axies provide real utility: ownership means employment for thousands of people. Meebits, created by CryptoPunk creators Larva Labs, come with 3D models and animations that can serve as characters in games. Source: Token Terminal Entertainment: Most successful social networks also score high on the entertainment axis. TikTok can be considered an entertainment network as well as a social network. Similarly, YouTube is the same. People often lurk on Twitter for hours without interacting, purely for passive entertainment. NFTs are also entertaining: observing sales is fun, and some people are already building their own characters and networks starring apes or punks. Bidding on PartyBid is both a social activity and an investment.

The entertainment of NFTs has just begun. Punks Comic is creating comic books based on 16 Punks, and more comic books will be released soon. This is just an obvious first step. Many NFT influencers believe that no major cultural event will go uncommemorated as an NFT, which will feed back into the event itself and may change based on what happens in real life.

Thus, NFTs provide social capital, utility, and entertainment… how do they respond to Wei's idea that new social networks are similar to ICOs? Are NFTs the new social networks? Wei believes that new social networks are similar to ICOs in four ways:

1. Each new social network issues a new form of social capital, namely tokens.

2. You must show proof of work to obtain tokens.

3. Over time, mining new tokens on each social network becomes increasingly difficult, creating inherent scarcity.

4. Many people, especially older ones, scoff at social networks and cryptocurrencies.

This is a great analogy. Take Bitcoin and Twitter as examples.

1. Bitcoin issues Bitcoin (BTC). Twitter "issues" followers.

2. Miners earn BTC for securing the network. Twitter users earn followers for posting witty, interesting, or mind-blowing content in 140/280 characters.

3. The cost of mining BTC is now higher than ever and will continue to increase in difficulty until all 21 million BTC are mined. In Twitter's early days, you could gain followers by tweeting what you had for lunch; today, people have resorted to long-form content.

4. This is self-evident.

Fifteen years ago, neither Bitcoin nor Twitter existed. Today, both are dominant forces. They reward early adopters, incentivizing them to work for the network, and make mining new tokens increasingly challenging, thus creating something from nothing. As a new token, NFTs clearly fit the four characteristics mentioned above.

The difference is that NFTs more directly link social and financial capital. To acquire valuable NFTs, one way is to get in early, at the time of minting, or when it is still early enough that the broader community has not yet generated interest. Another way is to buy one outright. The former is more about proof of work—finding early-supported projects; the latter may be closer to proof of stake—putting your ETH to support and participate in the project.

However, to say that CryptoPunks is a new social network seems a bit exaggerated. Rather than a social network, it resembles a community within the network. People who like CryptoPunks can talk about it on any social network, enhancing the credibility and influence of the entire collection. The previously mentioned collective bidding on a punk is a great example.

"Cryptocurrency is the native token of a large online game." You can gain status in one place, own it without platform risk, and carry it across the internet. The same goes for NFTs; regardless of which platform rises or falls, it remains true. Any social network with a profile picture is fertile ground for the spread of NFTs.

Moreover, this is not just an individual activity. Groups of people collectively owning specific NFTs, such as teams or DAOs that own NFTs, can move en masse to any new platform, using Discord as a base to launch missions into all new realms. Wei has written about Chris Dixon's idea, "Come for the tools, stay for the network." NFTs enable us to come for the tools and stay for the network, wherever the greatest social and economic value lies.

For all arguments about NFTs, it is equally important to point out the obvious caveat here: the price of specific NFTs or the total demand for NFTs may decrease, perhaps sharply. Even non-bubbles have bubble components. Recently, another antique NFT series from 2017, Ether Rocks, saw a surge in demand, with rocks priced over $100,000. Even the project's creator referred to it as "pet rocks on the blockchain." This revival seems to test the extent to which the community can drive their power to make anything valuable.

7. Potential Risks

Money Laundering Whenever the Twitter account @cryptopunksbot reports another high-value CryptoPunk sale, at least one money laundering accusation can usually be found in the comments. Given the enormous sums involved and the existing links between the art market and financial crime, this seems a reasonable preliminary assessment. In fact, recent regulatory crackdowns in the U.S. and Europe on using artworks for money laundering seem to have strengthened the appeal of NFTs as tools for cleaning dirty money.

However, some argue that Punks and NFTs are the worst choices for money laundering. You cannot "mix" NFTs precisely because they are non-fungible, and due to their low liquidity, you might be stuck holding them for months or years. While it cannot be proven that money laundering exists in the NFT space, it seems reasonable to assume that future AML regulatory efforts will extend the reporting standards recently imposed on traditional art businesses to platforms like OpenSea and Rarible. Wash Trading Another common accusation against CryptoPunks and their owners is that market participants deliberately attempt to distort prices. Commonly referred to as "wash trading," practices such as trading with oneself or inflating item prices create an appearance of demand, which could lead to higher final sale prices.

NonFungible reported on wash trading in the NFT industry last summer, identifying several strongly suspected examples of price manipulation. The most egregious was a CryptoKitty that sold for 600 ETH, reportedly with "no correlation" between its price and its attributes relative to other markets.

However, Zuppinger stated in an interview, "We recently checked for wash trading patterns in the CryptoPunks market and found nothing that could lead to such a conclusion. What we determined is that most 'whales' in the NFT space have purchased hundreds of Punks before the global hype. This is not entirely wash trading or market manipulation; it looks more like the usual 'supply and demand' mechanism in every market." ICO-like Bubble The surge in NFTs bears similarities to the ICO bubble of 2017. The success of early pioneering projects—like CryptoPunks for NFTs and BTC for cryptocurrencies—encouraged countless others to try to profit from their respective frenzies. If the outcomes of these two crazes are similar, then most NFTs today will certainly be as worthless as many failed ICO tokens.

Celebrities have now begun to release their own NFTs, which may indicate a market built on speculation rather than substance. This celebrity involvement was also a significant component of the later stages of the ICO bubble, during which some participating celebrities, including Paris Hilton, had never shown interest in cryptocurrencies before the ICO bubble.

However, some participants are not eager to describe the NFT market as an ICO-like bubble. The owner of Punk 4156 believes, "If this is a bubble, it is more like the Bitcoin bubble of 2013 rather than the ICO bubble of 2017—that is, a small localized bubble heralding something bigger to come."

While it may not be entirely a bubble, predicting asset prices is extremely risky, and the market will adjust for overly hyped NFT projects.

8. Future Developments

The backstory, scarcity, and status as the coolest identity symbol in the cryptocurrency industry contribute to the legendary status of CryptoPunks.

The market is likely in a bubble now. Nevertheless, early projects may forever hold historical relevance, making them harder to replicate than simple pixel art portraits. Significant adjustments in the NFT market or cryptocurrency prices may temporarily end many more fragmented NFT purchases.

CryptoPunks may continue to be regarded as the most precious non-fungible property in the digital world for some time: like the best artworks and the best crypto projects, CryptoPunks hold significant meaning for many reasons and for different people. They are both Ethereum's 'digital gold,' independent works of art, interesting and challenging speculative games, and, more importantly, a new form of social proof of rights.

For NFT projects, it is still early days; more infrastructure needs to be built, and more networks need to connect different NFT projects. But as Figma's CEO said, community is crucial for the development of NFTs. Each project can build a new form of social network on existing networks like Twitter, Instagram, Snapchat, Discord, and TikTok, continuously adapting and evolving over time.

New NFT projects can launch by effectively combining social and financial capital. Ownership brings social capital, utility, and entertainment. Driving the next big event or creating brand extensions like Punks Comics, as well as marketing specific NFTs to enhance the visibility of the entire collection.

Now, owners of Punks have purchased billboards in New York City, Miami, and London to spread the word. NFTs are part of a great online game, so the rules and opportunities are always evolving and expanding. When you combine money, status, and community, many things can happen.

The next big thing may initially look like a toy. The next big social network may not resemble a social network at all in the beginning.

Social networks reward early adopters, and if you are interested in NFTs, you can seek out an NFT that resonates with you to explore and participate. "Don't be one of those old folks who scoff at NFTs."