Larva Labs is facing backlash concerning the authenticity of Punks, stemming from its failed V1 CryptoPunks project and its newly launched V2 CrytoPunks.
Confusion has spread through the CryptoPunks community, as those who still attribute value to the failed CryptoPunks V1 have started a community project to keep it alive, delegitimize the V2 CryptoPunks collection, and potentially infringe the global copyright of the Brand.
The community-wrapped project, dubbed V1 Punks, according to the design studio is a potential infringement issue that appears to be causing consumer confusion and dilution to Larva Labs’ CryptoPunks brand – a major factor in any copyright infringement action.
Larva Labs, the creator of the iconic CryptoPunks NFT collection, which was widely considered a home project across the industry, has faces criticism from its CryptoPunks community, with mixed messages surrounding V1 CrytoPunks and a community-supported project, V1 Punks.
In a Discord post published earlier this week, Matt Hall, one of the core developers at Larva Labs, shared that he would be “taking appropriate steps” in the coming days as it pertains to the alleged copyright infringement of “both the art and the CryptoPunks name” referring to the CryptoPunks V1 collection.
What happened with CryptoPunks V1?
In 2017, Larva Labs launched its CryptoPunks V1 NFT collection, where it gave away 10,000 CryptoPunks. However, a fatal glitch in the current smart contract allows NFT buyers to withdraw their Ether (ETH) after purchase, leaving the seller completely empty-handed. In other words, buyers were inadvertently committing theft.
Following the discovery, Larva Labs quickly disassociated from the collection, and launched CryptoPunks V2, which also had a fixed supply of 10,000 images.
However, the issue within the CryptoPunks community is between legitimacy and authenticity between CryptoPunks V1 and CryptoPunks V2 – and more recently, a new set of algorithm-generated Punks known as “V1 Punks” who only differ by a pink background.
Undoubtedly confused, the community has presented a number of mixed reactions on distributed 10,000 CryptoPunks V1.
V1 Punks Aren’t Real CryptoPunks, Says Larva Labs
Downgraded CryptoPunks, thanks to OpenSea’s ban, have now been wrapped in a community-created smart contract and reissued on the Ethereum blockchain, known as V1 Punks, distinguished by only one color vs. to their V2 counterparts. This is an attempt to delegitimize the V1 CryptoPunks project that failed, while delegitimizing the V2 collection.
The community-wrapped Punks were essentially born out of the originally flawed V1 CryptoPunks smart contract, with the community recognizing them as OG.
And how does Larva Labs feel?
While having sold V1 Punks themselves, he also claims that these are not the real CryptoPunks and that a copyright infringement action will be taken. A mistake made, admitted Larva Labs co-founder Matt Hall in his Discord post. Larva Labs originally wanted communicate contempt of the project by getting rid of V1 CryptoPunks and expressed as such.
Instead, the communication drew negative responses from the CryptoPunks community.
How does the IP work?
Another question NFT holders have concerns the intellectual property (IP) and the parameters by which holders are able to use their NFTs for commercial purposes.
Larva Labs did not specify if or how many intellectual property rights are granted to the owners. This is in stark contrast to the Bored Ape Yacht Club, an NFT collection created by Yuga Labs. Owners of these NFTs may use purchased images for merchandise and branding.
Hall has indicated that Larva Labs is turning to litigation to prevent the community from taking advantage of its IP.
“Initially, we didn’t sue the V1 project for copyright infringement on both the art and the CryptoPunks name because we didn’t want to give it any extra attention, but now the owners of CryptoPunks asked us to take action, and we agree with them.”
The future of V1 CryptoPunks
The near future could see Larva Labs issue a DMCA notice against OpenSea and LooksRare, or take action against the smart contract that wraps V1 Punks.
Some collectors see CryptoPunks Wrapped V1 as added value in the future. They can also be sold as relics, their age driving up their prices.
Mark Buchanan, a Managing Partner at Meta4 Capital, a company that owns V1 CryptoPunks, suggests that Larva Labs is trying to “police secondary markets for an asset” that has “already been claimed.” He opines that collectibles like comic books that were recalled due to errors often found a place on secondary markets.
