$500m CryptoPunk "Sale" Is a Reminder That NFT Value Is Bunk
Just before Halloween weekend, CryptoPunk 9998, one of the 10,000 pixelated characters created by NFT forebears Larva Labs, sold for $500 million. Except it didn't. And that's exactly my issue.
For what it's worth, this is by far the most money racked up by an NFT sale — earlier this year, Beeple's Everydays: The First 5,000 Days changed the world when it sold for $69 million and CryptoPunk 7523 raked in over $11 million at auction in June.
But CryptoPunk 9998's half-billion-dollar sale wasn't really a sale at all. Instead, its owner merely utilized a flash loan — an unsecured, decentralized, single-transaction borrowing that uses smart contracts rather than bankers — to artificially inflate the value of the Punk.
No money laundering involved, though, as the loan defaulted and was automatically canceled by the smart contract. Basically, digital money that doesn't exist was used for a sale that didn't happen, all for the sake of creating meaningless value for a piece of artificial "art." Make sense?
Check the transaction history, if you're able to decode blockchain info.
CryptoPunk 9998's anonymous owner is now offering the NFT for sale at the handsome sum of $1 billion (250,000 Ether), because nothing means anything.
Larva Labs even "redacted" the faux sale on the blockchain to reiterate how meaningless it is.
The takeaway here is that this realm of the NFT market is all bunk. A scam, perhaps.
Now, there's a lot to like about decentralized cryptocurrency and NFTs, like the ability to sidestep banking institutions, easy access to non-liquid assets, artists getting paid for all of their art's transactions, and built-in art pedigrees.
But these cheerier elements exist below the most hyped tier of the NFT market, where CryptoPunks, toy robots, and cartoon monkeys reign supreme as fatuous digital investments.
No artistic integrity or ingenuity needed — no one cares about what these .JPGs look like, all that matters is that they're attached to an intangible dollar sign. How exciting.
"It’s not just people getting rich off jpegs," said a commenter on Instagram. "Trust me, it’s still very early."
I agree with that. NFTs, like cryptocurrency and the "stonk market," have a lot of potential. Anything that's decentralized, that strips power away from the ultra-rich and affords a modicum of freedom to the common person is a good thing.
But CryptoPunks and the rest of the InvesterBro staples are indicative of capitalism's corrupting influence over everything. Nothing means anything unless it's got a big fat dollar sign next to it.
This kind of corporate NFT culture is the medium's worst manifestation.
"We’ve passed through a racial uprising and a reckoning with sexism, and the cultural project of the moment is... innovating new ways to worship decade-old, BroBible-level brain farts?" asked Ben Davis in his review of Everydays: The First 5,000 Days.
"During a time of immiseration, investors are competing to throw tens of millions of dollars... at this?"
Sometimes, they aren't even throwing around real dollars.
