When looking at the top 20 collections by market cap on NFTGo.io, PFP projects dominate 70% of the market share of the most valuable projects.
Among all the Picture Profile NFTs, Cryptopunks and BAYC were always at the top NFTGo’s collection ranking since the last NFT summer.
Where’s CryptoPunk’s value come from?
Founded in 2018, CryptoPunks has an 11.38% market share.
As the OG of NFT PFPs, the value of CryptoPunks is more based on the genesis story. While BAYC is doing exceptionally well through its collaborations with other brands, Larva Labs has remained silent about the development of CryptoPunks and has not been clear about the commercial application and copyright issues of their NFTs either. In addition, although Larva Labs has produced various other successful projects subsequently, their correlation is insufficient in supporting each other's value.
CryptoPunks Market Performance
During the first week of October 2021, the transaction frequency and excitement around CryptoPunks raised the average price of a Punk up to 137 ETH. It’s worth mentioning that at the time the price of one ETH was $4,151, the price of one ETH today is around $2,700. Meanwhile, the CryptoPunk transactions broke the record for the most expensive PFP NFT ever sold.
However, despite the amazing performance of CryptoPunks in the past, more recently the project has experienced severe pumps and dumps in price.
When comparing the price graph with the summer of 2021, the impact of the market downturn on CryptoPunks becomes more apparent.
Investors don’t find buying million-dollar pixel JPEGs valuable since the market energy is not as bullish as before. FOMO, another major indicator of increased NFT trading, has also been fading more and more from the current market landscape. Nonetheless, CryptoPunks is still the OG NFT project with the largest whale share in the market. The reputation of larva labs, the creators of CryptoPunks, is still behind the project.
BAYC flipping CryptoPunks?
BAYC, which ranks the 2nd PFP collection, has received huge attention from whales and even celebrities. The collection has successfully been able to reach over 800 million dollars in market cap and has got a valuation of $5 billion from a16z. Besides that, Mutant Ape Yacht Club and Bored Ape Kennel Club collections are also backed by Yuga Labs, these three collections have generated over 1.3 billion dollars.
To some extent, Yuga Labs wants more than being the most representative project in the NFT world. Hence, they have been working with a wide range of parties to strengthen their influence. For instance, BAYC announced their partnership with Adidas and Animoca Brands to publish P2E games and more.
BAYC Market Performance
In the days of the NFT market’s downturn, BAYC managed to increase trading volume by almost 24%.
Over the last week, the top BAYC sales range from 200 WETH to 666 WETH. The presence of whales among the top transactions suggests that they still consider holding a BAYC as a valuable asset and that they’re willing to pay for one with a recently volatile and risky currency like ETH.
By observing the historical BAYC price graphs from NFTGo, we can see that, unlike CryptoPunks, even though the value of ETH dramatically decreased, the ETH price of BAYC NFTs has kept increasing, reaching high price points.
Currently, the average price of a Bored Ape has gone up to 92.9 ETH. The current value of ETH is about $2,800. In other words, the BAYC price in ETH increased by about 21% while the ETH price itself went down by almost 48%.
Punks vs Apes, the market has decided
Net Value Comparison
Comparing the price charts shows us that BAYC has kept its value to a much larger degree than CryptoPunks. We can calculate the net losses in value for these two top NFT projects by multiplying the average price at the time with the ETH price, and then comparing the value to today’s valuations.
In fact, while CryptoPunks had a negative net change in valuation, BAYC had a positive net change despite the decrease in ETH price. There are two insights that can be taken away from this data:
Below is showing the changes in floor prices for both projects. From the middle of NFT summer to the beginning of January 2022. The decline is present in both projects, however, CryptoPunks has had a more dramatic decrease in floor price.
The relationship between rarity and price for CryptoPunks and BAYC is shown below respectively. It can be seen that the value of collecting CryptoPunks shows a positive correlation with rarity, similar to the antique idea, the rarer, the more expensive. While the collecting behavior of BAYC is mainly driven by membership, hence the relationship between price and rarity is not obvious.
The Copyright Issue in PFP World
Yuga Labs and Larva Labs perform very differently when it comes to the copyright operation and subsequent development of their projects.
Larva Labs' creators faced backlash for selling V1 CryptoPunks for profit, which raises the community concern on V2 value. Besides that, in August 2021, Larva Labs signed an official deal with the United Talent Agency (UTA) to bring its NFT projects into the entertainment and branding worlds, which has greatly damaged the commercial value of CryptoPunks.
For the future of NFT copyright, we can take a look at Bored Ape Yacht Club's NFT copyright rules. Unlike Punks, BAYC holders own their own BAYC business rights. Although Yuga Labs is the creator of BAYC, it will not benefit directly from the various business activities of the holder. it even encourages and promotes the development of copyright openness. BAYC’s creators, in fact, still retain the rights to the entire IP series. Yuga Labs has signed an IP co-development agreement with well-known music manager Guy Oseary. At the same time, they have teamed up with Jimmy McNiles and even Universal Music to form a virtual band with their four apes to expand the music market.
Smart project creators understand that it is only when the influence of the entire IP grows that it truly brings benefits and confidence to every holder. The crypto movement advocates an open, transparent, and shared world whose basic unit is an open community. Any copyright restrictions seem incompatible with the values of the crypto world.
Let’s say that the endgame of the copyright war is a quadrant. On the far left of the X-axis is the copyright standard in the completely closed old world, and on the far right is the completely open CC0 copyright agreement.
The final outcome of the NFT copyright war is unpredictable, which depends on the promotion and direction of the communities and project parties for the copyright war.
Opening the door to new opportunities
The current declining growth rate in NFTs might be a sign of the market getting more mature and tending toward sustainable growth trends. PFP projects may or may not be a part of the evolution of NFTs. It depends on the market’s expectations and the future growth of PFPs.
Punks creators said they weren’t “well suited” to support the project.
The recent merge of the two most powerful NFT projects also shows us that some projects are better off teaming up and working together to construct a better community.
The strong responses from the holders signal a future growth trend as well as the higher expectations from Yuga Labs and Larva Labs to work alongside each other and deliver the best results.
Fans have created the #ApesandPunksTogetherStrong campaign on Twitter to express their interest in the collaboration.
This collaboration is a page-turner for the NFT ecosystem. The power that emerges from merging two of the most dominant NFT projects can change the trajectory of the NFT market and bring in exciting opportunities.