CryptoPunk Holders Unfazed By Meebits’ Move To Add Royalties
Yuga Labs has implemented a 5% royalty on secondary sales of Meebits.
By: Owen FernauNFT News
Yuga Labs doesn’t appear to be printing money the same way they were in 2021.
Meebits, a popular NFT project, sent shockwaves through the NFT space when it activated a 5% royalty fee on secondary sales of its NFTs on July 28. The fee change leaves Meebits’ sister project, CryptoPunks, as the only major NFT collection that doesn’t collect a slice of resales..
Yuga Labs, the creators of the Bored Ape Yacht Club NFT collection, acquired intellectual property (IP) rights to both Meebits and CryptoPunks in March. The addition of royalty fees represents the most significant change to Meebits since the acquisition.
Some collectors were disgruntled at what they felt was a lack of activity on Yuga’s part before enacting the fees. “Sounds like we are getting a lot of promises of things to come but are getting a 5% royalty as of now,” tweeted VonMises, a major NFT collector.
Meebits said in their Twitter thread announcing the fees that the project is developing features which will take Meebits to “the next level.”
Yuga may be feeling the heat to generate revenue from their investors after raising $450M in March in a funding round led by a16z — a leaked pitch deck for the company projected $539M in revenue in 2022, according to crypto influencer Sisyphus.
At somewhere between $80M to $90M by Sisyphus’ calculations, Yuga is roughly 16% of the way towards its 2022 revenue goal with only five months left in the year.
Declining resale volumes for its flagship BAYC collection mean fewer dollars in Yuga’s pockets.
Yuga’s efforts to boost cash flow beg the question of whether the hyped behemoth will turn on fees for CryptoPunks as well. After all, Yuga hasn’t made any direct moves to monetize CryptoPunks so far. On Aug. 1, the collection got a boost when Tiffany & Co., the luxe jewellery retailer, unveiled a program to transform CryptoPunks into handcrafted pendants. CryptoPunks’ sales volume soared 248% on the news, according to Decrypt.
Yuga is potentially sitting on a lot of money — 892,553 ETH have been spent on CryptoPunks in total, according to a Dune query. At today’s ETH prices, a 5% fee would have generated over $700M for the owner of the collection.
Tschuuuly, a Punk and Meebit holder, doesn’t think royalties are coming for CryptoPunks. “0 royalty marketplace is part of the punks artwork… everybody knows that,” she told The Defiant over Discord. “Yuga will not mess with that.”
Tschuuuly isn’t bothered by the company’s move to turn on fees for Meebits. “[Yuga] can play with [Meebits] and build for them and leave Punks mostly untouched.”
The Punk holder’s thinking does seem in line with that of Noah Davis, who became the brand lead for CryptoPunks in June. “I WILL NOT F@#K WITH THE PUNKS,” Davis tweeted when announcing his move to head up the Punks brand.
Enshrined in Code
Another Punk holder, who goes by VALKO on Twitter, added it would be almost impossible for Yuga to turn on royalty fees for CryptoPunks. This is because the code for the marketplace’s 0% fees is part of the same smart contract as the tokens representing the Punks.
“[Yuga Labs] could shut down the (centralized) website hosting the marketplace front end,” VALKO told The Defiant. “But then Punks would just interact with the smart contract directly as they please.”
Crypto users have been known to turn to Etherscan to trigger transactions when websites go down.
With sentiment and technical limitations tilted against CryptoPunks adding fees the way Meebits has, Yuga will be forced to pursue other avenues to monetize the NFT brand.
At least the acquisition of CryptoPunks’ IP allowed the NFTs’ images to be included in Yuga’s Otherside video, previewing the company’s metaverse aspirations — Yuga may have to wait to build out its metaverse to fully realize the Punks’ potential.
Updated on Aug. 2 to report News on Tiffany & Co. NFT program.