These two young people sold Meebits and CryptoPunks to the Bored Ape company

Written by: 0x13, Rhythm BlockBeats

On March 12, the parent company of Bored Ape Yacht Club (BAYC), Yuga Labs, announced the acquisition of the CryptoPunks and Meebits NFT series IP developed by Larva Labs. Yuga Labs plans to provide all commercial rights of these two NFT series to their holders.

At the same time, Yuga Labs stated that the BAYC ecosystem will still be the "center of its universe." The NFT series acquired will not be forcibly integrated into the "club" model developed for BAYC. Yuga Labs is committed to bringing additional utility to the CryptoPunks and Meebits series and will fully listen to community opinions before deciding on the next steps.

The NFT industry, which had been quiet for a long time, has finally added some imagination. BAYC has always been a representative of CC0, while Larva Labs' IP, aside from being expensive, has been criticized for not granting commercial rights to holders. This acquisition is equivalent to the BAYC team buying the commercial rights and giving them to the players of CryptoPunks and Meebits.

As a result, the two major IPs no longer belong to Larva Labs, and Yuga Labs has become the absolute leader in the NFT field. Many people may not be very familiar with Meebits, but in fact, Meebits, launched in May last year, also broke several NFT records at that time. There are still many stories to be told about the "Ape Universe," and the story of the two young creators of Larva Labs is also worth reading. This is an article written by Rhythm last May, hoping to be helpful to readers.

Before the Transformation

Larva Labs, which translates to "Larva Laboratory" in Chinese, is best known for launching CryptoPunks. Before the "larvae" transformed into "butterflies," Larva Labs was just a small software company specializing in developing mobile applications for iPhone and Android, with only John Watkinson and Matt Hall as its two members.

John and Matt have known each other for a long time. They entered the University of Toronto to study computer science in 1994. After graduation, Matt worked as a software engineer at Agency.com, Modus, and Columbia University Medical Center, while John chose to continue his studies, completing a master's degree in computer science at the University of Toronto after seven years and then pursuing a PhD in electrical engineering and genetics at Columbia University.

In 2005, the two decided to start a business and co-founded Larva Labs. At that time, the internet had only developed for a few years, and they positioned Larva Labs as a "small independent mobile software developer," mainly developing apps. With the launch of the iPhone in 2007, mobile applications became a new trend.

At that time, Larva Labs also created some popular mini-games, such as "Trism," which generated sales of $250,000 in the first two months on the Apple App Store.

Like many developers, the two founders of Larva Labs expressed various complaints due to the issues with centralized platforms while searching for their positioning. They could never have imagined that years later, they would earn nearly $80 million in a single day from a decentralized project.

The Birth of CryptoPunks

The year 2017 was perhaps the most important year in the lives of John and Matt.

In early 2017, John created a "pixel character generator," which allowed them to create many cool pixel character avatars. However, at first, they had no idea what to do with this generator. Should they create some characters for a new game? That seemed a bit boring, but what else could they do? Their ideas were proposed one by one and rejected until they learned about blockchain and Ethereum.

John and Matt ultimately decided to bring these pixel avatars onto the blockchain, allowing their uniqueness to be verified and enabling ownership. These pixel avatars, inspired by the 20th-century crypto-punk movement, became true collectibles. Time has proven that their decision was incredibly correct.

"This is an experiment," Matt said, feeling extremely anxious and uncertain about whether this idea could be realized, whether the technology could work, and whether people would accept virtual collectibles.

At that time, the ERC-721 and ERC-1155 standards widely used in the NFT field had not yet been created, and the Ethereum community was just getting started, with little information about Solidity development and responses on Stack Overflow. Therefore, all they could do was modify the ERC-20 standard.

So they had to feel their way through, and sure enough, they made a huge mistake.

Initially, John and Matt reserved 1,000 CryptoPunks for themselves and gave away all the others for free. Within about a week, all the CryptoPunks were claimed. After the primary market closed, trading in the secondary market began to flourish.

John and Matt embedded a trading market into the smart contract, wanting users to easily trade their CryptoPunks. In their vision, if a user wanted to bid 1 ETH to buy a certain CryptoPunk, another user would list it for sale at 1 ETH, and the smart contract would facilitate the transaction. Everything seemed to be progressing smoothly.

Until one day, a user tweeted: "I sold my CryptoPunk for 1 ETH, but I didn't receive the money."

This sparked a wave of reactions, and John and Matt began to check the smart contract, discovering that the issue was that the smart contract did not allocate the buyer's money to the seller but instead returned it to the buyer. In other words, after spending 1 ETH, the buyer not only received the CryptoPunk but also got back the 1 ETH they spent.

Before this, people had high hopes for CryptoPunks and felt proud to own one, but such a loophole was akin to a disaster.

Finding the problem in the contract and fixing it would be fine. However, to ensure that everyone still had their CryptoPunk, they would need to rerun countless transactions, requiring John and Matt to pay thousands of dollars in gas fees, which was no small amount. More challenging was whether they could still be trusted by the community after this incident and whether members of the CryptoPunk community would continue to recognize the value of CryptoPunks.

John and Matt nervously informed the community about the situation, admitted their mistake, and told people that CryptoPunks needed to migrate to a new smart contract. Surprisingly, no one opposed it; everyone agreed and chose to continue supporting them. "No one complained, saying 'I only accept the old smart contract,'" John and Matt were overjoyed, as this made them truly feel the power of community.

Thus, the problem was quickly resolved, and John and Matt added a "bidding" feature, allowing people to bid on a CryptoPunk. The money spent by the buyer would be stored in the smart contract, and when the seller accepted the bid, the transaction would proceed immediately, creating a dedicated little market for each CryptoPunk.

After that, the well-known story of CryptoPunks unfolded, with offline exhibitions in Zurich selling out quickly, secondary market trading reaching a peak of 4,200 ETH (approximately $7.5 million at the time), and landing at Christie's and Sotheby's auction houses in the second quarter of 2021.

"I think we are artists now."

Larva Labs' second project did not achieve the same level of fame as CryptoPunks, but it also showcased the genius creativity of John and Matt.

This project is called Autoglyphs, a blockchain character-generating art NFT project. Compared to CryptoPunks, where each NFT has a concrete pattern, Autoglyphs is much more abstract, with seemingly simple and chaotic characters hiding intricate secrets.

The inspiration for this series of artworks came from the works of 1960s generative artists Michael Noll and Ken Knowlton. At that time, due to limited computer storage capacity, they could only use these simple characters to piece together works of art.

Michael A Noll, Computer Composition with Lines, 1964

John and Matt aimed to challenge not computer storage capacity but blockchain storage capacity.

When creating CryptoPunks, they chose to store image files on Larva Labs' off-chain servers rather than on-chain. Although this faced the risk of being tampered with, it easily avoided the issue of blockchain storage capacity.

However, this time, John and Matt wanted to try storing Autoglyphs on the blockchain. Traditional jpg or png image files were too large, so they had to choose to create using characters.

"We had to write a concise yet efficient code, and the output of the work had to be minimal data or text. These constraints made it extremely difficult for us." John and Matt repeatedly tried to create countless generators, rewriting their code into smart contracts, and finally found the most suitable one. However, even so, the transaction fees were still frighteningly high; at that time, the Ethereum block gas limit was 8 million, and generating an Autoglyphs NFT cost them 3 million. Even so, they chose to continue.

Strictly speaking, what is stored on the blockchain is not an image but just a piece of code. When you want to see the image, the code runs to generate it.

John and Matt said that the Autoglyphs series NFTs are a tribute to the generative artists of the 60s and 70s. When they launched CryptoPunks and began exploring the digital realm, they found that the art of that era had not received much attention and appreciation, which was incredibly regrettable.

In an interview shortly after the launch of Autoglyphs, when asked by the host what their current identity was, whether they were still "small independent mobile software developers," John said, "I think we are artists now."

Hello, Metaverse

From symbolizing the crypto-punk movement and igniting the crypto world with CryptoPunks to paying homage to 60s generative art with Autoglyphs, John and Matt have been depicting the world and spirit they love and respect in their own way. Their third project, Meebits, represents their enthusiasm for the metaverse.

Meebits attracted attention even before its official launch. Kevin Rose, a partner at True Ventures and a well-known investor, tweeted a preview of the project: "I just saw the early preview of the next NFT project from the CryptoPunks team, Larva Labs. Oh my God, get your ETH ready."

This undoubtedly made everyone extremely excited about the project, and it proved that the anticipation was worth it.

On May 4, 2021, the somewhat quiet NFT field was once again stirred up as Larva Labs launched their third NFT project—Meebits.

The sale of Meebits adopted a Dutch auction model, starting at a price of 2.5 ETH, and the price would gradually decrease after a period without trading volume. However, backed by the Larva Labs brand, Meebits sold out in a very short time, with an average price of 2.4 ETH.

In just three days, the total trading volume of Meebits in the secondary market reached 12,000 ETH, approximately $42 million, significantly higher than the seven-day trading volume of the currently hottest NFT collectible project, CryptoPunks. On the first day of trading in the Meebits secondary market, OpenSea's trading volume reached $23.1375 million, setting a new historical high.

Meebits is more like an "upgraded version of CryptoPunks," transforming from pixel avatars to voxel dolls, along with different elements and rarity mechanics commonly used in NFT collectible series, attracting countless users to participate in the rush to buy. However, if this were the only change, it wouldn't be enough to say this is an excellent and innovative work; more importantly, these previously static "decorations" could now move.

These movable dolls can be adapted to any metaverse. The metaverse can be said to be the hottest concept recently, regarded as the next form of the internet and the virtual world where people will socialize, entertain, work, and live in the future. In this virtual world, having a Meebits character "skin" would be incredibly cool.

Larva Labs is a pioneer in NFTs, opening the door to the NFT world through CryptoPunks. At the same time, Larva Labs has always been doing what they truly want to do, depicting the world they love through one work after another. From crypto-punks to generative art to the metaverse, although it is unknown where Larva Labs' next series of works will aim, there is no doubt that they will continue to create precious collectibles exclusively for Generation Z and all digital natives.