One of the most well-known legacy collections in the NFT space, CryptoPunks, just put out a new IP rights agreement for its collection. All CryptoPunks holders will be able to get IP licenses through the new IP rights agreement. According to a tweet from the Yuga Labs-owned NFT collection, the CryptoPunks Twitter account hopes this will “open the door to endless creativity and possibilities for Punks.”
CryptoPunks could give new people ideas.
With big names in the entertainment industry like Jay-Z, Steve Aoki, and Heidi Klum among the most famous CryptoPunks owners, it’s only a matter of time before CryptoPunks characters take over traditional media.
And, amazingly, there is already a precedent for this: Enter the Bored Ape Yacht Club, the other big idea from Yuga Labs. Since March 2021, when the Apes first appeared on the scene and in the minds of crypto users, there have been a lot of projects based on them.
Bored Apes “played” at the 2022 All-Star Game for Major League Soccer and fought with hip-hop legends. But since Yuga Labs took over the Punks in March 2022, it’s likely that the future of the Punks as an intellectual property will go in the same direction.
Breaking down who owns CryptoPunks
So, after the new IP rights agreements, what does it mean to own a CryptoPunk NFT? For one thing, the published license terms say that CryptoPunk NFT owners have the “exclusive right to hold, sell, transfer, and execute blockchain transactions involving [their] CryptoPunk NFT[s].” Yuga Labs owns the IP in each user’s CryptoPunk, though.
As the owner of this intellectual property, Yuga Labs gets to decide how CryptoPunks are used in derivative works. The same goes for any piece of art or media that uses characters or art from CryptoPunks. The new license terms say that, just like when you buy a Bored Ape, buying a CryptoPunk gives you the right to make derivative works that you can sell to make money off of your new NFT.
You read correctly: Exclusive, royalty-free, and able to be licensed to other people. There’s no catch. The message is clear that you can do anything you want with your new NFT. But there’s a catch to all the noise: You can’t (and really shouldn’t) use your Punks to make content that is hateful or discriminatory. That is nothing like punk rock.
Obviously, you only have these rights as long as you own the CryptoPunk in question. If you sold your CryptoPunk but then changed your mind and wanted to make something based on the NFT you just sold, you would have to make a licensing deal with the new owner. The part about sublicensing comes into play at this point. In theory, any CryptoPunk NFT can now be turned into derivative works, as long as the owners agree to the terms of sublicensing. As part of the new IP rights agreement, CryptoPunks holders who make works based on their Punks will then own the IP to these works.
Even though CryptoPhunk got mixed reviews, Yuga Labs is moving ahead.
This is a very big change. In the past, the rights given to CryptoPunks owners were, at best, unclear. During the huge bull run in the NFT space in 2021, many projects were started that were clearly influenced by the OG Punks, to varying degrees of impact. During this time, Pixel Vault put out the PUNKS Comic, which had versions of the original pixelated Punks that were more detailed and had full illustrations. With the project’s recent change to putting Bored Apes through the same style filter, it looks like everything is going well in the zine-like world of GFunk.
But you can’t say the same thing about other projects.
Projects like CryptoPhunks came about because of the bull run. The only difference between it and the first set of Pixelated Punks? A description on OpenSea says that these Punks face left because “going the other way just doesn’t feel right.”
Several CryptoPunks followers were a little confused by projects like these. For example, the well-known CryptoPunk fan Spottie Wifi was able to get the CryptoPhunk NFT that matched up with his own OG Punk taken off the market by filing a DMCA takedown request.
Yuga Labs hopes that giving the owners of this legacy collection commercial rights will encourage more building in the space. As long as the bear market keeps going, innovation is the most important thing in the NFT space, so we’re looking forward to new CryptoPunks-themed projects.