CryptoPunks v. Bored Apes: who cares if Bored Apes flip CryptoPunks?
nftjedi
Flippening: There’s been a lot of chatter on social media about the possibility that Bored Ape Yacht Club (BAYC) will flip the CryptoPunks–meaning having a higher floor (sales price for the lowest priced recent sale) than the CryptoPunks. Indeed, that would be a shocking turn of events, given that the CryptoPunks are the most valuable NFT collection, while the Bored Apes were first sold in April 2021 for just $300 a piece.
Even if BAYC flips the CryptoPunks, should we care? Probably not. The floor price for a collection of 10,000 NFTs tells us only one thing for certain: the lowest sales price obtained most recently for the collection. Judging each collection based on that single figure tells us something about the least valued NFT in the market from that collection. But that’s it. Just imagine if we judged Picasso’s body of work based on the last lowest sales price for one of his paintings ($118,000 in 2014). That figure tells us nothing about the value or importance of Picasso’s body of work.
For a more complete picture of the value and market strength of an NFT collection, we should look at other indicators. I’ve compiled some of them in Table 1 below. (Please send any other suggestions.)
We can compare the highest all-time sales, for example. CryptoPunk #7523, the so-called “Covid Alien,” sold for $11.754 million on June 10, 2021. Bored Ape #8585 sold for $2.7 million on Oct. 20, 2021. In the past 30 days (Nov. 22 to Dec. 21, 2021), the highest sale for CryptoPunks was $10.32 million versus $1.42 million for Bored Apes. The average sales price for CryptoPunks in the last 7 days was $257,000 versus $239,000 for Bored Apes. The median price for CryptoPunks in the last 7 days (Dec. 15 to 21, 2010) was $253,000 versus $220,000 for Bored Apes. All these indicators, CryptoPunks still come out on top, but the average and median sales prices are converging!
Alyssa Exposito offers another point of comparison: total number of owners and the owners who own the most number of NFTs. 3,289 people own CryptoPunks, while 5,974 people own Bored Apes. Even though both collections have 10,000 NFTs, Bored Apes have almost twice the number of owners. The top 10 CryptoPunks owners who hold the most NFTs own a high number of CryptoPunks: ranging from the highest owner holding 410 CryptoPunks to the lowest holding 100. By comparison, the highest owner of Bored Apes holds 105 NFTs at most. Exposito suggests that Bored Ape Yacht Club having a far greater number owners works to BAYC’s advantage: the Bored Ape owners may “share a sense of collective value” and “will protect the value of the brand” as it develops through business partnerships. And this engagement with the community to develop the Bored Ape brand ties back in to the more permissive De-Collab licenses that BAYC gives to its owners.
Exposito’s analysis is insightful. I’ve written about the benefit of the Bored Ape Yacht Club using decentralized collaboration (De-Collab) licenses that give unlimited commercialization rights to the Bored Ape owners. De-Collab facilitates innovation. BAYC is unleashing 5,974 owners to develop the Bored Ape brand. We’ve already seen the potential. Two Bored Ape owners Jimmy McNelis and Timbaland have separate music projects (McNelis with Universal Music) to develop Ape bands for the metaverse. Other Bored Apes have developed Bored Ape wine, beer, and other merchandise. Meanwhile, Yuga Labs, the creator of BAYC, has already partnered with Adidas, G money, and PUNK Comic on what may be mind-blowing projects for the metaverse.
By comparison, Spottie Wifi is a CryptoPunk Rapper. Google and Amazon searches show CryptoPunk merchandise, presumably by NFT owners. But we have yet to see the kind of music deals that McNelis and Timbaland struck, or the metaverse deal with Adidas that Yuga Labs struck. Larva Labs is represented by United Talent Agency for possible movies, TV shows, comics, games, and other development of the CryptoPunks. But no news yet on any deals.
It’s too early to declare a winner between these two businesses. But the stakes are sky high.
It’s also important to remember that these figures focus only on business, financial, or economic value. They ignore the artistic and social significance of each collection.
What’s copyright got to do with it? The most intriguing aspect of the debate over CryptoPunks v. Bored Apes is the suggestion that the drop in floor price for the vaunted CryptoPunks is related to copyright licenses for the CryptoPunks.
As I’ve explained in a paper, the copyright licenses for the CryptoPunks apparently limits each NFT owner to only $100,000 in merchandising of the CryptoPunk character in an NFT. By contrast, the Bored Ape license grants the NFT owner unlimited commercialization rights, including the right to make derivative works.
