Yuga Labs faces backlash over CryptoPunks IP sale rumors

The CryptoPunks community is in turmoil over rumors that Yuga Labs may be considering selling the intellectual property (IP) rights of the CryptoPunks non-fungible token (NFT) collection. 

The rumor, which stemmed from a Jan. 14 post on X by Azuki researcher “Wale.moca,” has stirred a backlash among fans and industry voices.

According to Wale.moca, “several sources close to the matter” suggested that Yuga Labs could be “in the process” of selling the CryptoPunks IP. The rumor dispels the possibility of being a Web2 brand or an NFT company like Azuki, Pudgy Penguins or Doodles. 

Yuga Labs acquired the IP rights to 423 CryptoPunks NFTs from Larva Labs in March 2022.

Related: Indian Railways to issue NFT tickets on Polygon for rare festival

Yuga’s response

Greg Solano, Yuga Labs’ co-founder, addressed the rumors on X. He said:

 “A lot of people have approached us, esp[ecially] in the last few months […] Doesn’t mean we are doing anything”

Solano clarified that while he didn’t rule out the possibility of a deal, any potential agreement would need to guarantee a long-term positive impact on CryptoPunks.

“My biz and life are NFTs,” Solano wrote. “Not going to take a deal for money if I feel like it hurts the legacy of this asset […] some punks might think yuga bad… whoever owns punks must have an iron stomach […] and be willing to basically lock the IP up and throw away the key.”

Several community members have expressed dissatisfaction with Yuga Labs’ management of the CryptoPunks IP since its acquisition in 2022.

NFT collector Adam Smoot said the CryptoPunks IP has been passed between owners with differing promises.

StarPlatinum, another community member, posted on X that since YugaLabs acquired it, “CryptoPunks IP seems to have lost direction, relying only on its status as a grail NFT.”

On the contrary, Dheeraj Shah, an eminent NFT collector and trader, told Cointelegraph, “When Yuga bought CryptoPunks, people actually liked that they mostly left it alone. Just gave IP rights to holders and stepped back. Pretty different from how they handled Bored Apes, which, let’s be honest, hasn’t gone great.”

Shah explained that the rumors about Yuga selling CryptoPunks’ IP sparked optimism in the market. He noted that it could allow CryptoPunks to return to being “a piece of digital history, not another ‘utility’ project.”

Related: CryptoPunks NFT floor price spikes 13% on rumors of IP sale 

A DAO for punks?

Amid the backlash, Avichal Garg, managing partner at Electric Capital, proposed an alternative, transferring the CryptoPunks IP to a decentralized autonomous organization (DAO). 

Garg suggested that Yuga Labs capitalize a DAO through a token sale, using the funds to drive awareness of CryptoPunks through licensing deals, museum placements and co-branding efforts.

“Individual NFT owners retain the revenue from their specific NFT,” Garg said, adding that the DAO would distribute revenue from broader IP deals to the token and NFT holders. 

Garg’s idea got a nod from Bitwise chief investment officer Matt Hougan. 

CryptoPunks market sees renewed activity

In the past 24 hours, 16 CryptoPunks were sold for 676 ETH, equivalent to $2.18 million, according to data from the NFT price floor. The collection’s floor price is currently 40 ETH, which translates to $132,804, maintaining its position as the top NFT collection by market cap, valued at $1.3 billion.

Pudgy Penguins, the second-largest collection, is catching up with a floor price of 23.9 ETH, or $79,534 and a market cap of $706.9 million. Meanwhile, Bored Ape Yacht Club trails with a floor price of 15.35 ETH, equivalent to $51,088 and a market cap of $510 million.

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