Yuga Labs buys CryptoPunks, Meebits IP: The Sale Explained

Yuga Labs buys CryptoPunks, Meebits IP: The Sale Explained

byChristian Hardy

3/12/2022

Yuga Labs, the creators of the Bored Ape Yacht Club NFT collection, announced that it acquired rights to CryptoPunks and Meebits NFT collections from Larva Labs on Friday evening. Yuga Labs now controls the brands, copyrights to the art, and all IP rights for CryptoPunks, which is the top-selling NFT project of all-time, and Meebits. Yuga Labs is continuing to expand from their original NFT project, Bored Ape Yacht Club, the No. 2 NFT project in all-time sales.

CryptoPunks and Meebits owners will soon have complete commercial rights to their NFTs, which until now belonged to the founders of Larva Labs. The price of the acquisition has not been disclosed, though it’s assumed to be in the nine figures USD.

“As a first step, we will soon be granting CryptoPunks and Meebits holders the same commercial rights that BAYC and MAYC owners enjoy,” Yuga Labs said in its blog.

“By handing over these rights, we’re further aligning CryptoPunks and Meebits with the web3 ethos, and we expect a wide-range of third party developers and community creators to incorporate CryptoPunks and Meebits into their web3 projects.”

Yuga Labs updated their Twitter header to represent the three NFT collections they now hold the rights to.

The purchase by Yuga Labs marks the most significant acquisition by an NFT company to-date. It’s a massive step for a web3 company built by funding from NFT profile pictures, and a win for thousands of NFT collectors who will soon be granted IP rights tied to their NFT.

As part of the deal, Yuga Labs also acquired 423 CryptoPunks and 1,711 Meebits — equivalent to at least $100 million based on current floor prices for both collections.

In total, Yuga Labs now controls six NFT collections: Bored Apes, Mutant Apes, CryptoPunks, Meebits, Kennel Club, and Chemistry Club (Mutant Serums).

What Does the Yuga Labs CryptoPunks Purchase Mean?

Larva Labs created CryptoPunks almost five years ago as an experiment in digital ownership and art on the blockchain. Founders Matt Hall and John Watkinson were some of the earliest adopters of the ERC-721 token on Ethereum, which is the foundation for generative NFT projects today. 

CryptoPunks collection on Larva Labs

Despite this, the Larva Labs founders never truly set out to create a web3 brand around their NFT collection. But since 2017, NFTs have evolved to be more than just a stagnant collections of art on the blockchain, and holders expect constant progress from the teams behind NFT projects.

“Our speciality has always been the creation of things early in the life of a technology,” Larva Labs said in a blog. “So, as this category of “Profile Picture Projects” (PFP) grew into an industry in itself, we found ourselves less and less suited to the operation of these projects. Our personalities and skill sets aren’t well suited to community management, public relations, and the day-to-day management that these kinds of projects require and deserve.”

Yuga Labs Giving CryptoPunks IP Rights to Holders

Enter Yuga Labs: in less than a year, Yuga has created a worldwide brand valued in the billions of dollars around their Apes. The Larva Labs team was put in touch with Yuga Labs, and Larva Labs found that it was a clear fit for them to take CryptoPunks into this new NFT world.

With Yuga Labs’ expanding their brands and team — now up to 50 employees, they have the capital and capacity to take the CryptoPunks and Meebits IP into Web3. In case you’re wondering: the 30,000 NFTs that make up the CryptoPunks and Meebits are not being sold, they will remain untouched with their owners; however, these owners will soon gain full commercial rights to their NFT.

In the past, Larva Labs has filed several copyright disputes with OpenSea over derivative punk projects as NFTs have become more popular. This could no longer be the case under Yuga Labs, with owners having full IP and commercial rights. It’s likely that projects that have been removed from OpenSea under copyright claims — such as Phunks — will soon return to all marketplaces.

According to The Verge, Yuga Labs plans to foster a “community of builders,” in the spirit of decentralized community building, which will allow for community members to create derivative works around Punks and Meebits.

“We’re not in a rush to do anything but give people their IP, see what they build, and listen,” the Yuga Labs co-founders Gordon and Gargamel said of the acquisition.

What is Yuga Labs?

Yuga Labs is a web3 company that created the Bored Ape Yacht Club, an NFT collection of 10,000 cartoon apes which double as a membership to the yacht club. The Bored Apes launched in late April 2021, selling out on May 1, 2021 for .08 Etheruem each, marking the official beginning of Yuga Labs.

Bored Apes revolutionized NFT communities and projects, and created a wave of excitement and new projects in the NFT space. 

In the Bored Ape Yacht Club terms and conditions, Yuga Labs granted Bored Ape owners “unlimited, worldwide license to use, copy, and display the purchased Art for the purpose of creating derivative works based upon the Art,” as well as royalty-free license to use, copy, and display Apes for personal use.

To date, the Bored Apes have done over $1 billion in sales (based on the current price of Ethereum) in the original collection alone. Since the minting of Bored Apes, the Yuga Labs team expanded their brand and added value to their project beyond just the original Apes collection, with new collections like Mutant Ape Yacht Club, partnerships with massive companies, and in real life events, like a yacht party for holders.

Bored Apes have become the go-to NFT project and social club for mainstream celebrities to enter the NFT space, including Mark Cuban, Steph Curry, Post Malone, Steve Aoki, and Paris Hilton.

Yuga Labs released Roadmap 2.0 for Bored Apes in September 2021, after the minting of Mutant Apes.

Bored Ape Kennel Club

Bored Ape Kennel Club is a collection of dog companions for every Bored Ape. It was the first collection from Yuga Labs following the sale of Bored Apes.

Bored Ape Kennel Club Price

In June 2021, Bored Ape owners had one week to mint their Kennel Club doggo for free, with the total supply of the collection being 9,602 after the mint closed. To date, the Bored Ape Kennel Club has done $170 million in sales.

Mutant Ape Yacht Club

Mutant Ape Yacht Club was introduced with a simple tweet from Bored Apes on August 24, 2021. The Mutants are a collection of up to 20,000 Mutant Apes.

Every Bored Ape was airdropped a Mutant Serum — M1, M2, or Mega — for free. In total, 10,000 serums existed initially, each acting as a ticket to mutate a Bored Ape into a Mutant Ape. As apes mutate, serums are burned, thus decreasing the serum supply, and locking in the max supply of Mutants at 20,000 total.

10,000 randomly-generated Mutant Apes were available in a public sale, which was a dutch auction starting at three Ethereum and selling out around 2.6 Ethereum.

Mutant Ape Yacht Club Sales, Floor, Market Cap
Mutant Ape Yacht Club statistics

To date, Mutants have done $660 million in secondary sales, fourth among all NFT projects all-time, only behind Punks, Bored Apes, and Decentraland. The Mutant Apes also birthed the Bored Ape Chemistry Club, which houses all three serums and has done nearly $110 million in sales.

In January, a Mega Mutant serum, which produces a 1of-1 hand-drawn Mutant Ape, sold for $5.8 million.

Growing the Yuga Labs Brand

Yuga Labs has made significant partnerships with massive to grow into one of the largest web3 brands, including Adidas, Moonpay, and Animoca Brands.

Yuga Labs has worked with fintech startup Moonpay to facilitate purchases of Bored Apes for several celebrities, including Post Malone and Jimmy Fallon. Bored Apes and Moonpay were also featured in Post Malone’s music video with The Weeknd

Bored Ape Yacht Club in Post Malone music video
Bored Ape Yacht Club’s appearance in Post Malone’s music video.

Bored Ape Yacht Club partnered with adidas on an NFT collection the Originals into the Metaverse, which promises limited edition physical and metaverse products and wearables.

Most significantly, Yuga Labs announced a partnership with Animoca Brands in December 2021 to make a play-to-earn blockchain game. The game is scheduled to release in Q2 of 2022 and is slated to be the most significant part of the Bored Ape ecosystem to-date.

Yuga Labs also created a limited time mobile game competition in Q1 2021, where all Ape owners could win prizes for their achievements in the game. The game was free-to-play for all on iOS and Android.

In addition, Bored Ape Yacht Club has dropped coveted merch for holders only, and thrown an exclusive invite-only party in Brooklyn, where the Strokes and Lil Baby performed for Ape holders. Apes have also graced the cover of Rolling Stone.

What are CryptoPunks?

CryptoPunks are the original NFT (ERC-721) profile picture collection, launched by Larva Labs on June 23, 2017. The Punks were free to mint, and anyone could mint as many as they wanted. Each Punk is a 24×24 pixel portrait inspired by the London punk scene of the 1970s.

There are 10,000 CryptoPunks, each different from the next, with 6,039 male Punks, and 3,840 female Punks. 

CryptoPunks Marketplace on Larva Labs website
CryptoPunks Marketplace on the Larva Labs website

The original buyers of this collection are considered OGs in the NFT and crypto space, as Punks are some of the earliest generative artworks on the Ethereum blockchain. The only way to purchase a CryptoPunk today is from the secondary market, where the floor is currently 76 Ethereum ($196,500).

Where Bored Apes started an NFT project revolution in 2021, positioning themselves as a start-up for a global brand, CryptoPunks are seen as NFT history and a signal of early individual crypto adoption. In February, a rare alien CryptoPunk sold for $23.7 million, months after another alien sold for over $11 million.

What are Meebits?

Meebits are 20,000 unique 3D voxel characters in a style similar to Roblox, custom generated by an algorithm. 11,000 Meebits were reserved for the holders of CryptoPunks and Autoglyphs — another NFT collection by Larva Labs. The other 9,000 were sold for 2.5 Ethereum.

Meebits minted in early May 2021 as the second generation NFT collection from Larva Labs and were advertised to be metaverse-ready. Owners of Meebits receive the full 3D model of their Meebit to be used in Metaverses.

Meebits by Larva Labs were acquired by Yuga Labs, the Creators of Bored Ape Yacht Club
Meebits an NFT collection by Larva Labs was acquired by Yuga Labs, the creators of Bored Ape Yacht Club.

Through the sale of Meebits, Larva Labs raised $75 million at the time (or 22,500 Ethereum). To date, Meebits have done $241 million in secondary sales.

What is Larva Labs?

Larva Labs is the company that created CryptoPunks and Meebits, founded by Matt Hall and John Watkinson. As of March 11, Larva Labs has now sold all IP rights to two of the three NFT projects it created, Punks and Meebits, to Yuga Labs. But Larva Labs existed for over a decade before CryptoPunks.

LarvaLabs was founded in 2005 in New York to pursue “creative technology projects.” They started by writing apps for the T-Mobile Sidekick (and wrote over 50), and have worked on mobile applications for iOS and Android, as well as many other software development projects.

While Yuga Labs now owns the copyright to Punks and Meebits, Larva Labs will continue to exist and work on new tech projects — and the space will likely be watching. It’s possible that we could one day see Larva Labs release another NFT project.

It’s also worth noting that Larva Labs signed a deal with United Talent Agency (UTA) in Q4 2021, which many speculated meant CryptoPunks were coming to film, TV, and other media. Since the announcement, no public media releases have come out of the deal, and it’s unclear if UTA will be involved with Yuga Labs.

The Future of Yuga Labs and $APE Token

For most of 2021, the NFT community wondered if Bored Apes may flip CryptoPunks in floor price. Then, they did in late 2021. Now, the creators of Bored Apes have taken the future of CryptoPunks into their own hands, establishing themselves as the premier web3 brand born from an NFT collection with control of the biggest projects in the space.

Before the acquisition, many Punk owners had become vocal about the lack of commercial rights and free use of their Punks. Now, just as many Bored Ape owners have capitalized on full commercial rights — like Kiki, Swickie’s Bored Ape or Jenkins the Valet  — CryptoPunks owners will have the ability to do the same. 

It’s popular belief within NFT communities that full commercial rights embedded into a profile picture collection is more harmonious with the values of web3, where a brand’s value can be decentralized and driven by a community of contributors.

This decentralized ethos is especially important to consider with the impending $APE token airdrop for Bored Ape and Mutant Ape holders, which is expected to be governance and utility tokens for the Bored Ape ecosystem.

Yuga Labs has made it clear in their statement that Apes are “the center of the universe we are building,” though they plan to add utility to CryptoPunks and Meebits in their own ways.

Could CryptoPunks and Meebits also get a slice of the $APE pie? How will CryptoPunks owners take advantage of full commercial rights once granted by Yuga Labs? Will Apes and Punks get along in the metaverse?

These are all things we’re waiting to see. Regardless, this acquisition is momentous for NFTs, and a sign of more excitement to come in the space.

Follow Christian Hardy on Twitter: @ByHardy