In a Discord post posted on Wednesday, Matt Hall, lead developer of Larva Labs, a division of the popular CryptoPunks v2 and CryptoPunks v1 non-fungible token (NFT) collections, announced that they will be taking appropriate action regarding alleged copyright in the coming days. violation. “CryptoPunks Name and Name” for CryptoPunks V1 Collection. Typically, this means sending a Digital Millennium Copyright Act or DMCA takedown notice to the platform that is responsible for hosting the auction content.
Matt Hall discusses CryptoPunks v1 and v2 | Source: Official Discord Larva Labs
In 2017, Larva Labs created the CryptoPunks v1 NFT package, which contains a fixed supply of 10,000 items. However, users soon discovered a fundamental flaw in the project’s smart contract, which allowed Punks buyers to withdraw ether (ETH) after purchase, resulting in theft. Soon Larva Labs considered the collection unoriginal and released CryptoPunks v2, also with a steady supply of 10,000 images. This move was only made after the first batch of 10,000 CryptoPunks V1 was sold, but there are 20,000 CryptoPunks in existence, 10,000 of which are disputed. Also, Larva Labs simply cannot destroy the v1 project as Twitter user @0xStroudonian reportedly pointed out that v1 and v2 smart nodes are intertwined as they point to the same file.
The issue went unnoticed when OpenSea previously banned the sale of CryptoPunks v1, even though users packaged them as ERC-721 tokens to fix the underlying exploit. However, the group’s recent listing was for LooksRare OpenSea to lift the block. At press time, CryptoPunks v1 has raised 12,069 ETH ($34.1M) in total trading volume on OpenSea, while CryptoPunks v2 has raised 819,900 ETH ($2.22B) in total trading volume on the same platform.
Blockchain aficionados are still strongly divided on the authenticity of the CryptoPunk v1 and v2 groups. For example, Discord user Rufus Xavier #9449 wrote:
“Larva Labs, you have to put it all together. DMCA is not the answer. Are you doing this with your group now after you changed it?
Meanwhile, Discord user mb#1510 had a different opinion:
“I don’t know if I can sell any V2 knowing there is another token that could be linked to it or not.”
According to the Copyright Law, the presence of counterfeit and diluted products can greatly affect consumer confidence in the original brand and lead to a decrease in value. Because the CryptoPunks supply is supposed to be “permanent” at 10,000 units, adding another 10,000 to the pool by legitimizing it would weaken the brand and could cause the pool’s value to drop. However, there is no legal precedent for whether displaying, reappearing and re-marketing an NFT art collection due to a smart contract error constitutes copyright infringement.