CryptoPunks, one of the most prominent legacy collections in the NFT space, recently released a new IP rights agreement for its collection. The new IP rights agreement will offer IP licenses to all CryptoPunks holders, a move that the CryptoPunks Twitter account hopes will “open the door to endless creativity and possibilities for Punks.,” according to a tweet from the Yuga Labs-owned NFT collection.
CryptoPunks could inspire a new generation
With several notable figures in the entertainment industry like Jay-Z, Steve Aoki, and Heidi Klum among the highest-profile CryptoPunks owners, it’s only a matter of time until future projects barrage traditional media with CryptoPunks characters.
And, incredibly, precedence for this is already established: Enter Yuga Labs’ other marquee IP: the Bored Ape Yacht Club. Many Ape-themed projects have launched since the Apes first hit the scene — and the crypto public consciousness — in March of 2021.
In 2022, we saw Bored Apes “play” at Major League Soccer’s 2022 All-Star Game and feud with hip-hop legends. But, since Yuga Labs took stewardship of the Punks in March 2022, it’s very likely that the future of the Punks as an IP will take a similar path moving forward.
Breaking down CryptoPunks ownership
So what does owning a CryptoPunk NFT mean now, in the wake of the new IP rights agreements? For one, CryptoPunk NFT owners hold the “exclusive right to hold, sell, transfer, and execute blockchain transactions involving [their] CryptoPunk NFT[s],” as per the published license terms. What Yuga Labs does own, however, is the IP in each user’s CryptoPunk.
As the owner of this IP, how CryptoPunks are used in derivative works is up to Yuga Labs’ discretion — as is any piece of art or media featuring CryptoPunks-inspired art or characters. The new license terms dictate that just like with buying a Bored Ape, purchasing a CryptoPunk grants you, the buyer, the rights to commercialize your new NFT via the creation of derivative works.
You read that right: Exclusive, royalty-free, and sublicensable. No strings attached. You can do whatever you want with your new NFT; that much is clearly the message. But there’s a catch behind the cacophony: You can’t (and really shouldn’t) use your Punks to create hateful, discriminatory content. That’s not punk rock at all.
Of course, these rights only apply while you own the CryptoPunk in question. Should you decide to sell your CryptoPunk but circle back on wanting to make something based on your just-sold NFT, you’d have to come to a licensing agreement with the new owner. That’s where the bit on sublicensing comes into play. Theoretically, any CryptoPunk NFT can now be turned into derivative works, provided that owners agree to sublicensing terms. Notably, as part of the new IP rights agreement, CryptoPunks holders creating works based on their Punks will then own the IP to these derivative works.
Yuga Labs surges ahead despite mixed CryptoPhunk reception
This is a huge development. In previous years, the rights conferred to CryptoPunks owners could be best described as murky at best. During the massive bull run of the NFT space throughout 2021, plenty of projects launched taking clear inspiration from the OG Punks — to varying degrees of consequence. Pixel Vault launched the PUNKS Comic during this time, which featured fleshed-out, fully-illustrated versions of the original pixelated Punks. With the project recently pivoting toward putting Bored Apes through the same stylistic filter, all looks to be well in GFunk’s zine-like world.
But the same can’t be said for other projects.
With the bull run also came projects like CryptoPhunks. Its only point of departure with the original collection of pixelated Punks? These Punks face left, “because the other way just doesn’t feel right,” according to a description on OpenSea.
Projects like these left several members of the CryptoPunks faithful slightly confused. For example, the noted CryptoPunk enthusiast Spottie Wifi successfully filed a DMCA takedown request to have the CryptoPhunk NFT that matched up with his own OG Punk delisted from the marketplace.
Hopefully, Yuga Labs’ conferral of commercial rights to holders of this legacy collection will encourage continued building in the space. As innovation continues to be the NFT space’s prevailing currency amid the ongoing bear market, we’re looking forward to new CryptoPunks-themed projects moving down the pipeline.