Disclosure: The content is strictly for your general information only. No part of the content that we provide constitutes financial advice, legal advice, or any other form of advice meant for your specific reliance for any purpose. Any use or reliance on our content is solely at your own risk and discretion.
People have been likening the past few weeks to 2020’s DeFi Summer; except this time, Non-Fungible Tokens (NFTs) are the new hot thang. We have seen many sectors within the NFT space blow up. At the top, we have Axie Infinity leading the gaming/Play-to-Earn revolution. Closely following suit is a barrage of NFT Art (sometimes affectionately/maliciously referred to as JPEGs) that mirrors CryptoPunk’s iconic avatar-based style.
You might be wondering: what is going on here? Are people actually spending thousands of dollars on a profile picture (PFP)? Well, if you are talking about CryptoPunks (Punks), that's not quite accurate. People are spending millions of dollars.
Source: Larva Labs
The top 2 sales occurred in March 2021 for a whopping $7.6M each, but over the last month, many other Punks were bought for millions as well - this does not even account for the public auction sale of a Punk for $11.8M in June 2021. The question then becomes, why are people throwing life-changing money into JPEGs?
Answering this is no easy task as it touches on many different areas. Basic assumptions like ‘quick flips’ do not adequately encapsulate the wider NFT phenomenon. We can try and elucidate some of the things at play, but pretending we have all the answers is delusional at best. Instead, we will try and share the observations we’ve had, both as an observer and an active participant.
We will start by documenting the journey of three projects: CryptoPunks, Bored Ape Yacht Club, and Pudgy Penguins. We will then discuss the cultural impact these projects have had in the crypto space. Finally, we will explore why they have taken off and what they mean for this new digital age.