Battle for authenticity heats up in world's most popular NFT collection

In a Discord station published connected Wednesday, Matt Hall, the halfway developer astatine Larva Labs, the entity down the fashionable CryptoPunks V2 and, initially, CryptoPunks V1 nonfungible tokens (NFT) collections, announced helium would beryllium "taking due steps" successful the pursuing days regarding the alleged copyright infringement of "both the creation and the CryptoPunks name" of the CryptoPunks V1 collection. Normally, this would magnitude to submitting a takedown announcement nether the Digital Millenium Copyright Act, oregon DMCA, to the level liable for hosting the contented for auction.

Matt Hall discussing CryptoPunks V1 vs. V2 | Source: Larva Labs authoritative Discord

In 2017, Larva Labs created the CryptoPunks V1 NFT postulation containing a fixed proviso of 10,000 items. However, users soon discovered an underlying bug wrong the project's astute declaration that enabled the Punks' buyers to retreat their Ether (ETH) post-purchase, resulting successful theft. Larva Labs rapidly deemed the postulation inauthentic and launched CryptoPunks V2, besides with a fixed proviso of 10,000 images. The determination came lone aft the archetypal 10,000 CryptoPunks V1 postulation sold retired however, truthful determination are a full of 20,000 CryptoPunks successful existence, with the authenticity of 10,000 of them disputed. On apical of that, Larva Labs cannot simply destruct the V1 task arsenic Twitter idiosyncratic @0xStroudonian allegedly pointed out that some the V1 and V2 astute contracts are intertwined arsenic they constituent to the aforesaid file.

The contented remained nether the radar arsenic OpenSea antecedently banned the merchantability of CryptoPunks V1, adjacent though users wrapped them arsenic ERC-721 tokens to hole the underlying exploit. However, the wrapped collection's caller listing connected LooksRare prompted OpenSea to rescind the ban. At the clip of publication, the CryptoPunks V1 postulation accumulated 12,069 ETH ($34.1 million) successful full measurement traded connected OpenSea, portion the CryptoPunks V2 postulation accumulated 819,900 ETH ($2.22 billion) successful full measurement traded connected the aforesaid platform.

Blockchain enthusiasts stay sharply divided implicit the authenticity issues of the V1 and V2 CryptoPunk collections. For example, Discord idiosyncratic Rufus Xavier#9449 wrote:

"Larva labs, you request to get your crap together. DMCA is not the way. Now you're doing it to your postulation aft you traded it? You're making the full abstraction look bad. Stop."

Meanwhile, Discord idiosyncratic mb#1510 expressed a antithetic constituent of view:

"I conscionable don't cognize if I tin beryllium good with selling idiosyncratic V2 knowing determination is different token that mightiness oregon mightiness not person relevance to it."

In copyright law, the beingness of counterfeits and diluted products tin importantly impact consumers' assurance successful the archetypal marque and whitethorn origin them to driblet successful value. As the proviso of CryptoPunks was accidental to beryllium "fixed" astatine 10,000 items, adding different 10,000 into the postulation by acknowledging their legitimacy leads to marque dilution, and could pb to a driblet successful the collection's value. However, determination is nary ineligible precedent arsenic to whether oregon not the spin-off, resurfacing, and re-commercialization of an NFT creation postulation owed to a smart-contract bug constitutes an enactment of copyright infringement.