As the cryptocurrency market recovers, there has been a massive increase in money flowing into NFTs. Last weekend, numerous investors bought a large number of Cryptopunks, and daily volume surpassed $40 million on Opensea this Saturday. After reading this article, you will know what happened during the “Punk Mania.”
Did Three Arrows Capital buy 100 Cryptopunks?
The most exciting thing about Cryptopunks this weekend was one person who bought 88 Cryptopunks for a total cost of 6 million in one block using flashbots. The buyer used MiningDAO so that his purchase of 88 punks would be prioritized and transacted in one block. The buyer chose this method to ensure that he did not have to pay more than the current market prices. Bots often try to front-run people on NFT marketplaces. Had these bots noticed his purchases, it would have cost the investor a significant amount of money. MiningDAO is a protocol that solves this problem, allowing anyone to propose entire blocks to be mined, with a reward attached to the miners for mining them. The buyer of the 88 Cryptopunks, for example, paid 5 ETH to MiningDAO for his transaction. The ability to fill one block with such a large amount of NFTs could also be seen as a very effective way to set a floor for the market without getting disturbed by other market participants. It also looks like other investors are copying this strategy to set the floor of other projects and an anonymous buyer also paid 22 ETH for the service of MiningDAO to prioritize his bid on a Cryptopunk which made him $80k in profit after he sold in on the same day.
It was rumored on Twitter that this anonymous buyer was crypto investment fund Three Arrows Capital. However, later that day, the actual buyer of the total 100 punks named @0x650d stepped out of the dark and tweeted that this information was false. He proved that he was behind the transaction by signing an Etehreum tx with his Twitter handle. The Twitter account was created in July, and his wallet still contains a large amount of Ethereum along with the Cryptopunks.
— 0x650d (@0x650d) July 31, 2021
The rumors of Three Arrows Capital buying Cryptopunks were not that far from the truth, as it became clear later that day that the fund was indeed buying Cryptopunks and other NFTs. They just were not behind the purchase of 100 punks. The company allocated 5000 ETH to other punks, including one zombie punk, and most of their Ethereum went into curated Art Blocks such as Fidenzas Sail-o-bots and Ringers. The company also bought multiple Autoglyphs that were worth between $700k and $2 million right now and a golden bored ape which was worth almost a 100 ETH.
Gary Vee and Steve Aoki strengthened the punk army
As with most hypes these days, celebrities were involved in this weekend’s Punk Mania. Gary Vee, a famous entrepreneur and the creator of the NFT project VeeFriends, bought CryptoPunk #2140 for $3.7 million. The punk he purchased was one of 24 “Ape Punks.” and the same NFT was sold for $1.18 million in March and $731,000 in February. Another ape punk sold for $5.5 million, but it’s unclear who the buyer is. Gary Vee currently owns more than 50 Cryptopunks and has been actively supporting the NFT community on Twitter.
— Beanie (@beaniemaxi) July 30, 2021
Just two hours before, Gary Vee decided to buy his $3 million Ape Punk. American DJ and producer Steve Aoki decided it was time to join the punk army as well. He changed his profile picture on Twitter to a Cryptopunk and later announced that he had found a “futuristic primate pal” for his punk, showing that he had bought a bored ape.
CryptoPunks are among the NFTs with the highest prices. In July, there were 1,395 sales worth $135 million, according to NFT tracker CryptoSlam. The average sale was just under $100,000 – a much higher average than most NFT projects. Because of these high prices, it is impossible for many small investors ever to own a Cryptopunk in their lifetime. Also, the fact that there are currently 0 Cryptopunks listed on OpenSea makes it even doubtful that investors who have the money to buy one will be able to own one.
Fractional is trying to find a solution to this problem by allowing investors to fractionalize their NFTs. @DeeZeFi on Twitter fractionalized his Hoodie Punk into 10,000 $HOODIE tokens on July 31. There were 183 unique holders and $226.67.00 in volume. The notable thing is that a fractionalized Punk appears to be increasing more in value than an ordinary punk.
Another example of this is the NFT project Punkscomics, which allows owners of their comic to stake the first issue. In exchange, they receive a $PUNKS token. This token represents fractionalized ownership of 16 CryptoPunks.
It seems like fractionalizing NFTs is becoming more common as rare collections become prohibitively expensive for retail collectors. Some owners of bored apes also decided to fractionalize their apes by creating a community named ApeDAO, and given the growing demand for NFTs, this seems like an excellent solution to improve inclusivity.