CryptoPunks and BAYC, on-chain data tells you who the true king is

Original Title: “CryptoPunks vs BAYC, Who won the Blue Chip Battle?”
Original Source: NFTGo WeChat Official Account

Last week, Yuga Labs acquired the collections of CryptoPunks and Meebits from Larva Labs. After the acquisition, Yuga Labs will own the brands, artistic copyrights, and other intellectual properties of these two series, as well as 423 CryptoPunks and 1711 Meebits, which has sparked discussions about copyright issues in NFTs.

After experiencing a surge in NFT prices last year, CryptoPunks faced a bear market in the crypto space, with its average price dropping by 61.40%. The floor price post-acquisition has not changed much compared to before.

Despite a significant drop in ETH, BAYC's valuation has not been greatly affected by cryptocurrency prices. The average price has increased by 88% compared to three months ago, and the floor price has risen after the acquisition.

Leaders in the PFP Market

Currently, PFP (Profile Pics) projects are one of the most popular categories in the NFT market. According to ranking data from NFTGo.io, PFP projects account for 70% of the NFT market share.

Data Source: NFTGo.io

Among PFP projects, CryptoPunks and BAYC are the two leading blue chips. Since the NFT summer, these two projects have consistently ranked first and second.

Data Source: NFTGo.io

Founded in 2018, CryptoPunks has been a standout in the NFT market. As the OG of NFT PFPs, CryptoPunks represents the identity and credentials of NFT enthusiasts. Currently, CryptoPunks holds an 11.3% share of the entire NFT market.

Pie chart showing market share of different projects
Data Source: NFTGo.io

Bored Apes (BAYC) is also a highly regarded top blue chip, reaching a market cap of over $800 million and receiving a valuation of $5 billion from a16z. In addition to BAYC, Yuga Labs also owns the MAYC (Mutant Ape Yacht Club) and BAKC (Mutant Ape Kennel Club) series, generating over $1.3 billion in total revenue.

CryptoPunks vs BAYC, Who is Better?

Market Performance of CryptoPunks

In the first week of October 2021, market enthusiasm drove the average price of Punks up to 137 ETH. It is worth noting that at that time, the price of 1 ETH was $4151, while today it is around $2700. Meanwhile, CryptoPunk transactions broke the record for the most expensive PFP NFT transaction ever.

However, despite CryptoPunks' impressive past performance, the project has recently experienced severe price volatility. Comparing the price chart to the summer of 2021, the impact of the market downturn on CryptoPunks has become more apparent.

Data Source: NFTGo.io

Currently, many investors believe that spending millions of dollars on pixel JPEGs is not valuable, as the market is no longer bullish, and FOMO sentiment has gradually faded. Nevertheless, CryptoPunks remains the OG NFT project with the most whales in the market and is almost a must-know project for entering the NFT space.

Market Performance of BAYC

Currently, in the context of a sluggish NFT market over the past week, BAYC's trading volume has increased by nearly 88.92%.

Data Source: NFTGo.io

Last week, BAYC's highest sales ranged from 120 ETH to 250 ETH. There was also a recent transaction record of 666 ETH. The high-value transactions and the influx of many whales indicate that they still consider holding BAYC a valuable asset and are willing to continue purchasing during the market downturn.

Data Source: NFTGo.io

By observing the historical BAYC price chart on NFTGo, it can be seen that, unlike CryptoPunks, despite the sharp decline in ETH's value, the ETH price of BAYC NFTs has been rising, reaching high price levels.

Currently, the average price of Bored Apes has risen to 88.2 ETH, with the current value of ETH being around $2700. The floor price has also increased by 41% in the past 7 days.

Data Source: NFTGo.io

We can calculate the net value loss of these two top blue chip NFT projects by multiplying the average price at that time by the ETH price and then comparing the value with today's valuation.

In fact, as ETH prices have fallen, CryptoPunks' valuation has seen a negative net change, while BAYC's net change has been positive. CryptoPunks led the market during the NFT summer with its genesis story and discovery, but its value has also dropped by over 50% in the face of the declining crypto market, which is closely related to market sentiment. However, despite the significant drop in Ethereum, BAYC's valuation has not been greatly affected by cryptocurrency prices and has maintained its original value.

The following shows the changes in the floor prices of the two projects before the IP acquisition, from the mid-NFT summer to early January 2022. Both projects experienced a decline, but CryptoPunks' floor price dropped more significantly.

Comparison of floor prices between CryptoPunks and BAYC
Data Source: NFTGo.io

Brand Effect and Narrative Style

The BAYC team values membership, granting BAYC holders membership privileges, and is gradually improving the exclusive content ecosystem around BAYC, including a members-only BATHROOM for creation, graffiti, and communication, as well as exclusive merchandise like T-shirts and hoodies.

In addition to BAYC, Yuga Labs has also horizontally expanded its products to BAKC and MAYC, where pets in BAKC are free for each BAYC member, requiring only gas fees, thus achieving mutual value support among the IPs under the Yuga team.

The commercial rights of BAYC NFTs are also granted to specific holders. On December 22, 2021, 33 BAYC holders collaborated with a Taiwanese e-commerce group to launch 3D figurines, fashion apparel, and other businesses. This has opened up more possibilities for the realization of BAYC's commercial value. Yuga Labs signed an IP co-development agreement with renowned music manager Guy Oseary.

At the same time, they also collaborated with Jimmy McNiles and even partnered with Universal Music to form a virtual band with his four apes, jointly expanding the music market. The development of BAYC relies on its delegation of NFT commercial copyrights and the increasingly完善生态圈 built around commercial copyrights.

In contrast, CryptoPunks is positioned more like a genesis collectible in the NFT space, with its underlying value support coming from the pioneering narrative elements it carries, akin to an antique waiting to be collected, leaning more towards a means of value storage.

The relationship between the rarity and price of CryptoPunks and BAYC is shown below. It can be seen that the value of collecting CryptoPunks is positively correlated with rarity; the rarer, the more expensive. In contrast, the collecting behavior of BAYC is primarily driven by membership, so the relationship between price and rarity is not as pronounced as in the former.

Left: CryptoPunks, Right: BAYC
Data Source: NFTGo.io

Copyright Issues Under Strong Alliances

Larva Labs has always been silent about the development of CryptoPunks, and has not clearly stated its stance on commercial applications and copyright issues. In August 2021, Larva Labs handed over the publishing exposure rights for various film and entertainment platforms to the Hollywood agency UTA instead of to the holders, leading to dissatisfaction among holders regarding the ambiguity of copyright for v1 CryptoPunks after profiting significantly from selling v1 CryptoPunks.

In a statement after the acquisition, Yuga Labs emphasized that the first thing they would do is grant complete commercial rights to CryptoPunks and Meebits NFT holders, which can be traced back to Yuga Labs initially granting ownership and commercial rights to BAYC and MAYC owners. Yuga Labs also plans to work with community members to further integrate these two NFT series with Web3.

Generally speaking, NFT copyrights do not belong to the buyer. However, Yuga Labs grants ownership and commercial rights to BAYC, which are also transferred to the buyer upon transaction. BAYC grants Bored Ape NFT holders complete commercial rights to use, copy, and display the purchased collectibles, as well as to create derivative works based on them.

Copyright protection for digital native assets has always been a challenge, as "copy-pasting" is too easy, making digital rights protection very difficult, and the question of how to define NFT copyrights arises.

In 2018, Dapper Labs, the creator of CryptoKitties, released the NFT License, which explicitly states that NFT holders may not arbitrarily alter the artistic image of the NFTs they hold, nor use them for commercial marketing or the production of third-party products.

Additionally, NFT holders may not associate with improper images, nor register trademarks or acquire other intellectual property rights. This standard essentially excludes most commercial interests of holders.

But will this benefit the ecosystem?

Smart project creators understand that only when the influence of the entire IP grows can it truly benefit each holder. The case of Yuga Labs is a typical example. The crypto movement advocates a world of openness, transparency, and sharing, with the basic unit being open communities. Any copyright restrictions seem incompatible with the values of the crypto world.

Assuming the outcome of the copyright battle is a quadrant, the far left of the X-axis represents the completely closed copyright standards of the old world, while the far right represents the completely open CC0 copyright agreements. It is noteworthy that the ultimate direction of NFT copyright depends on the attitudes and initiatives of the community and project parties.

Conclusion

The creators of Punks have expressed online that they do not "fit very well" to support the project. The merger of these two powerful NFT projects also indicates that some projects can build a better community through complementary advantages.

The reactions of the holders of the two projects also signal future growth expectations. Fans launched the #ApesandPunksTogetherStrong campaign on Twitter to express their interest in this acquisition.

The current decline in NFT growth rates may also indicate that the market will become more mature. As the market gradually expands, there will likely be more scenarios involving copyright transactions in the future. This collaboration may be a milestone event in the NFT ecosystem, and the power generated by these two top blue chip NFT projects is enough to change the trajectory of NFT market development, bringing more valuable opportunities for all NFT holders.