Tag: CryptoPunks

The early history of NFTs, part 4 — Game sprites on the blockchain: CryptoPunks

CryptoPunks was one of the earliest crypto collectibles on the Ethereum blockchain, following Curio Cards by six weeks. 

The launch on June 9, 2017, didn’t go as smoothly as planned. A horrible bug in the code meant buyers could take the seller’s Punk — and their money back too!

Larva Labs, the firm behind the project, was able to fix the problem, but it came back to haunt them years later in the form of V1 Punks. 

This is an early draft for our book, which David just posted over on his blog. [David Gerard]

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Artnet News: ‘The Creators of Bored Ape Yacht Club Want to Become the Amazon of the NFT Space. Can They Pull It Off?’

My latest story on the Bored Apes Yacht Club was published in Artnet News today. It’s paywalled but worth subscribing to Artnet News if you want to read it!

I spent a few weeks working on this nearly 2,000-word story, and Artnet News editor Julia Halperin really helped me pull it together. We had the story ready to go on Friday when suddenly, Yuga Labs announced they had just acquired the IP to CryptoPunks and Meebits from Larva Labs. So of course, that meant lots of last-minute editing along with a new headline.

Usually, you make big announcements at the beginning or middle of the week, not when people are clearing off their desks and getting geared up for the weekend. 

But then the floor price of Bored Apes was dropping, slipping below $200,000 in ETH—and Yuga Labs needed to act quickly. 

Yuga Labs is giving Punk and Meebits owners the IP for their avatars, so they can create derivatives and hopefully further the branding and marketing of the project.

They’ll probably also get to attend yacht parties and warehouse concerts, and benefit from all of the other perks and freebies, like NFT airdrops.

Token projects have been promising real-world utility since the ICO era of 2017, and NFT projects are no different. The goal is to somehow justify the insane prices of these things. 

When NFTs became “the next big thing” in early 2021, many people started asking: “What good are these? All they do is point to a JPEG on the internet. I can copy and download that JPEG myself.”

In response to the criticism, many NFT projects now promise utility, and BAYC is no different. Owning a bored ape is a key to a club. It’s culture. It’s a digital identity, or whatever Yuga Labs can think of next.

Ultimately, it’s about marketing. High-value NFTs are illiquid. It’s very difficult to find a 1:1 buyer for a $200,000 bored ape, outside of celebrities. So the goal is to keep bored apes in the public eye and to keep bored ape holders from selling off their NFTs.

In the meantime, Yuga is working on a fungible token that will likely “democratize” their high-priced NFTs. All the better for a16z, if they proceed with reported plans to invest millions into the project.

The Silicon Valley VC firm could potentially get ERC20 tokens in return for their investment, and see quick returns if the coin lists on Coinbase. A16z has two directors sitting on the Coinbase board.

A fungible token combines the best of both worlds — the scarcity of a collectible NFT with the liquidy of an ERC20 token. But it’s complicated, you see. Too often these things resemble securities offerings.

Yuga Labs knows the big money is temporary. Until they work out the legalities of a fungible token, they need to do everything possible to keep the price of Bored Apes Yacht Club tokens up. 

So far, the plan is working. Soon after the announcement on Friday, the floor price of Bored Apes went up again. As of today, the cheapest bored ape NFT is $227,000 (90 ETH), according to CryptoSlam.

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News: Coinbase Q1 earnings, Signal integrates MobileCoin, GBTC premium in the toilet, Reggie Fowler’s new lawyer  

Bitcoin rose above $60,000 again. It only took 6 billion tethers to make that happen since the last time it hit $60,000 in March—less than a month ago. We now have 44.5 billion tethers in circulation. 

Coinbase set to debut on Nasdaq

Everything looks rosy for Coinbase’s debut on Nasdaq on April 14. The company is worth $91.5 billion, securities filings show. It reached that valuation even before releasing Q1 results of $1.8 billion—9x that of a year ago. (WSJ)

All that glitters is not gold, however. If Coinbase’s regulatory status were to change (and regulatory ambiguity is clocked in the company’s S1 risk factors), the company could be forced to drop many of its hugely profitable activities or be forced to operate at a much higher capital cost. (FT)

Signal, a good thing going bad

Signal is one of the best apps we’ve got for secure communication. But that could all change, as the encrypted app moves into payments with the integration of MobileCoin.

Techies are upset because they associate cryptocurrency with frauds and scams. They don’t want to see Signal become a sketchy money transmitter business. 

A beta version of Signal Payments is now available to UK customers. It’s not available in the U.S., probably because MOB looks like an unregistered security. MobileCoin says it hasn’t worked out all the regulatory stuff yet.  

Turns out, Signal’s creator Moxie Marlinspike has deep ties to MobileCoin. I wrote about the money flows, and David Gerard followed with a story explaining the tech. (My blog) (David Gerard) 

In a blog post titled “Et tu, Signal?,” Stephen Diehl reminds us that we’ve seen this film a few times before.

Telegram tried the same thing in an ICO that imploded when the SEC shut them down. Facebook tried and failed to monetize WhatsApp. And when encryption app Keybase did an airdrop of Stellar lumens, crypto spammers invaded the app, ruining the user experience.

“This association weakens the entire core value proposition of the Signal app for no reason other than making a few insiders richer,” he said.

Grayscale wants to convert GBTC into an ETF

GBTC once enjoyed a healthy premium but is now trading at 9.72% below NAV. Virtually nobody is buying GBTC on secondary markets. 

Can shareholders redeem their GBTC for bitcoin? No, they cannot. Once bitcoin gets locked up in the trust, it is in there for good. (GBTC has ~649,130 BTC locked up to date, roughly 3% of all BTC.) 

In March, Grayscale announced it was going to shore up the discount to GBTC’s NAV with a $250 million buyback. Now, it plans to convert GBTC into an ETF. The conversion would mean GBTC shareholders no longer have to pay a hefty 2% annual management fee. 

For some reason, Grayscale is confident the SEC will approve an ETF, even though the regulator had rejected every single Bitcoin ETF proposal put before it to date. I’m not sure why Grayscale is any different. (Coindesk) (GBTC announcement)

Currently, the SEC is reviewing two active bitcoin ETF applications: the VanEck bitcoin ETF and WisdomTree’s bitcoin ETF.

Fowler has a new lawyer

Reggie Fowler has finally found himself a new lawyer after his previous defense team withdrew from the case because he failed to pay them. His new lawyer is Ed Sapone of Sapone & Petrillo in New York.

Fowler is the Arizona businessman tied to hundreds of millions of dollars in missing Tether/Bitfinex money. He was indicted in April 2019, along with Israeli woman Ravid Yosef, who is still at large. 

Judge Andrew Carter has yet to set a new trial date. He is giving Sapone three months to get up to speed on the case first. And he warned Sapone: “You are going into this with your eyes wide open.” Meaning if Fowler doesn’t pay him, Sapone will not be allowed to withdraw from the case.

Other newsworthy items

Christie’s is grabbing the NFT bull by the horns. The prestigious auction house is selling NFTs of nine rare CryptoPunks by Larva Labs alongside work by Andy Warhol and Jean-Michel Basquiat in a marquee auction.

The single lot—estimated to fetch between $7 million to $9 million—will be sold at Christie’s 21st Century Evening Sale on May 13 in New York. (Artnet) (Christie’s)

Former BitMEX CEO Arthur Hayes has surrendered to authorities. He flew to Honolulu to appear before a judge on April 6. Pursuant to an earlier agreement, he was released on a $10 million bond, secured by $1.5 million in cash, pending future proceedings in New York. 

Six months ago federal prosecutors in New York accused Hayes and his BitMEX co-founders of violating anti-money laundering rules. Hayes is a US resident. Previously, he was living in Hong Kong, but he has been living in Singapore with his Singaporean wife since January 2020. (Bloomberg) (Lawyers’ proposal) (Bail conditions)

The New York Excelsior Pass is a COVID-19 vaccine passport system. It proudly proclaims its use of secure technologies, like blockchain and encryption but it’s doing the wrong thing and badly. (David Gerard)

If you are tracking central bank digital currencies, John Kiff updated his CBDC “explorers” table with new developments out of Russia, Sweden and Trinidad & Tobago. (John Kiff)

Who needs a bitcoin ETF anyway? MicroStrategy just purchased another 253 BTC for $15 million in cash at an average price of $59,339. Saylor’s firm now holds 91,579 bitcoins acquired for $2.2 billion at an average price of $24,311 per bitcoin. (Press release)

HSBC will no longer allow customers to buy Microstrategy stock due to its newly changed policy on virtual currencies. (Tweet)

The rising tide of bitcoin is good for everyone. Following in the footsteps of Coinbase, Kraken is considering going public in 2022, after record trading volumes in the first quarter (CNBC)

BitClout, the decentralized social network that tokenizes Twitter accounts, uploads your keys to their server on every API request. Any employee with access to that server can steal all the money on the platform at any time. Like I said earlier, this project appears to be one bad idea piled on top of another. (Tweet)

Phillips, another London auction house, smaller and slightly younger than Christie’s, is getting into NFTs with the sale of an artwork called REPLICATOR.

The NFT market has been a bust for Mike Winkelmann in so many ways. Now he is coming out with a book on Amazon.

Sleep with Kate. Drive with Kate. Walk with Kate. Model Kate Moss is featuring her own series of NFTs on Foundation. Proceeds go to charity. (Vogue)

Super Bowl champion Tom Brady is launching his own NFT platform called Autograph. (CNBC)

This tweet of a nothing sandwich from the Fyre Festival will be sold as an NFT. The original tweeter will use the money to help pay for a kidney transplant. The sale on OpenSeas ends on April 24. If any NFT deserves your money, this one does. (Verge) (GoFundMe)

Feature image: Beeple everyday posted on Twitter

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Posted on by Amy Castor 0