A Comprehensive Understanding of Why Yuga Labs, the Parent Company of BAYC, Acquired CryptoPunks and Meebits

Written by: Azuma

On the morning of March 12, a heavyweight news instantly ignited the entire NFT circle.

Around 7:00 AM, Yuga Labs (the developer of BAYC) and Larva Labs (the developer of CryptoPunks) jointly announced that Yuga Labs has acquired the IP of CryptoPunks and Meebits from Larva Labs. Following this news, both CryptoPunks and Meebits surged in the secondary market. As of 10:10 AM Beijing time, the floor price of CryptoPunks was reported at 76.2 ETH, and the floor price of Meebits was reported at 6.93 ETH.

Some details regarding the acquisition were explained in detail in the announcements from Yuga Labs and Larva Labs. Specifically:

Q1: What is included in the acquisition?

A: As mentioned earlier, Yuga Labs will acquire the IP of CryptoPunks and Meebits from Larva Labs, including the brand, artistic copyrights, and other IP rights. In addition, the former has also acquired most of the NFTs held by the developers, and upon completion of the transaction, Larva Labs now holds 423 CryptoPunks and 1711 Meebits.

Q2: What is the acquisition amount? Where did the money come from?

A: Both Yuga Labs and Larva Labs did not disclose the specific acquisition amount, but based on the floor prices, the total value of NFTs transferred through this acquisition alone has reached tens of thousands of ETH. Coupled with the primary IP acquisition costs, it can be inferred that the total amount of this acquisition is likely to be in the "hundred million" range.

This inevitably brings to mind some rumors that surfaced last month. As early as January, insiders revealed that Yuga Labs was seeking financing at a valuation of $5 billion, and in early February, other insiders disclosed that Yuga Labs was negotiating with a16z regarding financing.

Q3: Why did Larva Labs decide to sell CryptoPunks and Meebits?

A: Larva Labs stated that the reason for selling the IP of CryptoPunks and Meebits is that, with the rapid development of NFTs (especially PFP types), the team gradually realized that their strengths lie in creating new things in the early stages of a technology, rather than managing a specific project on a daily basis.

While Larva Labs was handling these community management issues, the team got to know Yuga Labs and discovered some skills and expertise they lacked. Initially, Larva Labs and Yuga Labs attempted to solve the problems through collaboration, but ultimately Larva Labs realized that letting Yuga Labs take over operations was the best course of action.

Q4: How will Larva Labs develop in the future?

A: It should be clarified that Yuga Labs only acquired the IP of CryptoPunks and Meebits, not Larva Labs itself. In the future, Larva Labs will continue to develop independently, and the team still has the Autoglyphs project, with team members also holding some of their favorite CryptoPunks and Meebits NFTs.

Q5: What impact will the acquisition have on CryptoPunks and Meebits holders?

A: Yuga Labs has stated that it will soon grant CryptoPunks and Meebits holders the same commercial rights as BAYC and MAYC holders. To this end, Yuga Labs is working with legal teams to draft new legal terms for these two NFT series to quickly transfer these rights to the community.

Previously, Larva Labs' reluctance to release the commercial rights of CryptoPunks (and Meebits) had been criticized by the community. Under the general perception of the industry, Larva Labs' actions did not align with the spirit of Web3, and many believe this was a key reason for the continued decline in the floor price of CryptoPunks.

Q6: How will CryptoPunks and Meebits develop in the future?

A: Yuga Labs envisions that more third-party developers and community creators will incorporate CryptoPunks and Meebits into their Web3 projects. Along this journey, Yuga Labs will work with them to build the brand of CryptoPunks and Meebits.

Specifically, Yuga Labs stated that it does not intend to force these two NFT series into the club model developed for BAYC, but will build new utilities around CryptoPunks and Meebits. However, these events are not urgent at the moment, so before deciding on the next steps, Yuga Labs will listen to community feedback.

Q7: What impact will the acquisition have on BAYC?

A: BAYC holders can rest assured, as Yuga Labs has clearly mentioned that it will continue to regard BAYC as its central focus.

Q8: With BAYC + MAYC + BAKC + CryptoPunks + Meebits, how should Yuga Labs position itself?

A: As Yuga Labs has brought together many of the most well-known projects in the NFT space, it has become the most noteworthy "new force" in the entire NFT field. At the end of this announcement, Yuga Labs also clearly stated its positioning—"to create a brand that transcends NFTs and is fully owned by the community."

Finally, I recommend everyone to take a look at "Understanding Why CryptoPunks Lost to BAYC from the V1 Punks Controversy." If we view the story of BAYC flipping CryptoPunks as a consensus expansion path of the Web3.0 spirit, then this acquisition should be seen as a milestone victory along this journey.

From the event itself, as the largest acquisition case in NFT history (and seemingly the first), this acquisition will undoubtedly have a profound impact on the future development of the entire NFT industry. On a smaller scale, the different outcomes brought about by the two teams' distinct operational methods will inevitably serve as a reference for all other project teams.

On a larger scale, the professional capabilities and market stage adaptability issues mentioned by Larva Labs have also made people realize for the first time that the (PFP) NFT industry can be divided into upstream and downstream segments. In the future, is it possible for the issuance and operation of PFP NFTs to be separated?

On an even larger scale, as the concept of Web3.0 continues to spread and evolve, how future projects should choose to catch up with and surpass BAYC, just like "slaying the dragon" of CryptoPunks, is worth everyone in the industry to brainstorm and imagine freely.