# V1 Cryptopunks Wrapped By [Kilroy.eth](https://paragraph.com/@kilroy-2) · 2022-01-28 --- Cryptopunks were initially released in June 2017 by Larva Labs, as one of the first non-fungible tokens (NFTs) on the Ethereum blockchain. Comprising of 10,000 unique 24x24, pixel art characters that were generated algorithmically, with proof of ownership stored on the Ethereum blockchain. Since their inception, Cryptopunks have gained significant historical value and are highly desired by collectors. As of September 2023, the total trading volume for Cryptopunks NFTs stands at over 1 million ETH, valued at roughly $2.65B. Auction houses including Christies and Sotheby’s have led auctions for the digital assets, and several independent sales have surpassed $10M for a single Cryptopunk. Upon release, Larva Labs kept 1,000 for themselves, and anyone with an Ethereum wallet could “claim” one of 9,000 Cryptopunks for free from [this smart contract.](https://etherscan.io/token/0x6ba6f2207e343923ba692e5cae646fb0f566db8d) If you’re not familiar with the concept, smart contracts serve as the backbone of NFTs; every NFT relies on a well-designed and executed smart contract. Over one week elapsed before all 10,000 were claimed. However, shortly after their primary sale concluded, software developers Matt Hall and John Watkinson found a fatal flaw within the original smart contract. Since blockchain entries are permanent, this defect in the smart contract could not be altered or removed. If you’re interested, [This thread](https://twitter.com/0xfoobar/status/1374604091263905794?s=20) written by @Foobar, goes into full detail on how the original Cryptopunk smart contract was defective. For those of you less keen on reading, the thread can be summarized with this: _If a token holder attempted to sell the NFT, the buyer could receive the NFT and simultaneously withdraw the funds from the sale, leaving the seller with nothing._ To resolve this issue, Larva Labs created [a new smart contract](https://etherscan.io/token/0xb47e3cd837dDF8e4c57F05d70Ab865de6e193BBB) that fixed the defect and replicated the Cryptopunks collection, subsequently minting another 10,000 Cryptopunks which were sent to those who claimed CryptoPunk NFTs from the original smart contract. These Cryptopunks from the second version of the smart contract are the Cryptopunks that have billions of dollars in sales and are historically significant today. Since the resolution of the first smart contract’s fatal defect, the original Cryptopunks have sat in the wallets of those who claimed them in 2017, unable to be traded or sold on [Larva Labs’ secondary marketplace](https://larvalabs.com). [This video](https://www.youtube.com/watch?v=4cEmUTebNqM) explains the debate and reconciliation of the original smart contract, and provides confirmation as to the authenticity of Cryptopunks from the original smart contract. Fast forward to January 17, 2022, a new [smart contract wrapper](https://etherscan.io/token/0x282bdd42f4eb70e7a9d9f40c8fea0825b7f68c5d) was released that allowed holders of the original, now called “V1 Punks”, to transfer their V1 Punks to a separate smart contract that corrected this flaw. Although this smart contract is not affiliated with Larva Labs (or Yuga Labs), this allowed token holders to safely buy and sell V1 Punks on secondary marketplaces like OpenSea and LooksRare. If you’re interested in the exact definitions and implications of this development, good news, I’ll be explaining it below. **Wrapping** Wrapping is a fairly straight foward yet complex concept. Essentially, someone sends a token to a smart contract and this smart contract returns an equivalent but modified “wrapped token” to the user. A great of example of this can be seen with Wrapped Bitcoin (WBTC), which enables the use of Bitcoin on different networks. If you own Bitcoin, you can wrap it on the Bitcoin blockchain and receive Wrapped Bitcoin on a different blockchain. If you own WBTC, you can unwrap it and receive BTC on the Bitcoin blockchain. This is all to say, 1 BTC = 1 WBTC. [V1 Cryptopunks Wrapped](https://opensea.io/collection/official-v1-punks) can be unwrapped and the owner will receive the NFT from the original, but broken, smart contract deployed by Larva Labs. As of September 1, 2023, 4,014 V1 punks have been wrapped with the [V1 Cryptopunks Wrapped smart contract](https://etherscan.io/address/0x282bdd42f4eb70e7a9d9f40c8fea0825b7f68c5d). **What’s the catch?** Here’s the catch: The original Cryptopunks are historical artifacts, despite their flaws. V2 Cryptopunks are highly desirable due to their historical significance, yet V1 Punks are technically more historically significant based on their provenance (origin in time in which they were brought into existance). Many Cryptopunks from both smart contracts have been lost to misplaced or inactive wallets over the years. While there are 10,000 Cryptopunks recognized by Larva Labs (and Yuga Labs) today, many will never see the light of day. Wrapped V1 Cryptopunks could provide us with a more accurate count of the amount of wallets who originally claimed Cryptopunks in 2017, that are still active today. **V1 Punks are a scarce collection of the historically oldest Cryptopunks.** The smart contract that allows V1 Punks to be wrapped and traded is not officially endorsed by Larva Labs. In fact, shortly after _V1 Cryptopunks Wrapped_ gained traction in 2022, Larva Labs tweeted: ![](https://storage.googleapis.com/papyrus_images/2917123c84fed06473652b5ccc4498d58079e03742fec8826cfa2cd348624b05.png) Larva Labs admission that they retained “1,000 of them” speaks volumes. V1 Punks are legitimate Cryptopunks; they're just not the "official" ones. Drama unfolded when it was discovered that prior to this tweet, Larva Labs actually used the wrapper themselves and sold 210 ETH (+$700k) worth of V1 Punks. These sales occurred before their tweet stating that “they didn’t like them”. Once the blockchain records were scrutinized by token holders on both sides, Larva Labs faced criticism and later addressed the situation with the following statement on their Discord: ![](https://storage.googleapis.com/papyrus_images/337e4f8a59a1219a5c48e65f97f3c3d2648c8a09d5f58c0bd0b319cf995d3903.png) Unsurprisingly, Larva Labs' actions were not well received by their community. A month after the V1 Punks resurfaced thanks to the Wrapped CryptoPunks V1, and these events occurred, [Yuga Labs acquired the IP CryptoPunks and Meebits](https://larvalabs.com/blog/2022-3-11-18-0/yuga-labs-acquires-cryptopunks-and-meebits). Along with the acquisition of Larva Labs by Yuga Labs, 1,000 V1 Punks were transferred to wallets owned by Yuga Labs. **Author’s Conclusion:** This purpose of this article is not to claim that V1 Punks are superior or inferior to V2 Cryptopunks. What I am stating is that V1 Punks are unquestionably part of the Cryptopunk universe. While they may not be “official” Cryptopunks, V1 Punks are not not Cryptopunks. --- *Originally published on [Kilroy.eth](https://paragraph.com/@kilroy-2/v1-cryptopunks-wrapped)*