The NFT world is split over CryptoPunks creator’s Hollywood deal

You can’t go anywhere on Twitter these days without encountering a CryptoPunk. And if the suits have their way, you’ll be seeing a lot more of the pixel art NFT characters all over — perhaps even on the big screen.

United Talent Agency (UTA), one of Hollywood’s biggest agencies, announced this week it has signed the rights to represent CryptoPunks, plus fellow NFT characters Meebits and Autoglyphs, all of which are creations of Larva Labs.

CryptoPunks was one of the first examples of broadly recognizable art collectibles to be tied to NFTs. Launched in 2017 and initially given away for free, they’re now worth a collective $3 billion. It’s little wonder then that UTA has recognized the potential for non-NFT spinoffs using the pixelated punk characters.

“I remember the first time I saw CryptoPunks and just thought, ‘I want one,’” Lesley Silverman, head of UTA Digital Assets, tells Input. “They have these unique characteristics where you feel compelled to own one and learn more. That to me is the sign of something really exciting and sparkly.”

So her company, which represents everyone from former Beach Boy Brian Wilson to Nobel prizewinner Malala Yousafzai, decided to partner with Larva Labs to develop its intellectual property (IP).

“Our plans are to think about this intellectual property in the way we’ve thought about intellectual property across the board for many years as an industry — which is to help this unique IP cross over into the broader media landscape,” she says. “It could be anything,” Silverman adds, though she highlights the potential of movies, video games, and global licensing opportunities. (Larva Labs did not respond to Input’s request for comment.)

It’s a significant moment for a technology barely understood by most of the population — though Paris Hilton has done a good job at explaining what they are to laypeople recently. It also comes just over a week since Visa (yes, the credit card company) bought its own CryptoPunk. But seeking profit — and what’s perceived as selling out — has split the NFT world.

Investors have already called it the beginning of the end of the NFT boom, raising concerns that the economic benefits from commercializing the IP don’t trickle down to those who bought CryptoPunks, but instead to their original developers. (“That’s something I can’t comment on today, but it’s a watch-and-see,” says Silverman when asked directly about the issue. However, she adds, “I do believe very much in the ethos of rising tides floats all boats — especially when it comes to a community.”)

Others have equated the move to “selling your soul to the devil.” Generally, those who see the deal as a bad move consider it a cheapening of a vibrant new medium for art.

“What is happening now is the commercialization that comes from the amazing bubble we have right now in cryptocurrencies,” says Andres Guadamuz, senior lecturer in intellectual property law at the U.K.’s University of Sussex, who has been investigating the cryptocurrency space for a decade. Cryptocurrencies are used to purchase the NFTs, and NFTs are seen as a way for newly rich cryptocurrency barons to spend their spoils. “A lot of people just started jumping on the bandwagon,” he says.

Guadamuz believes there are two key uses of NFTs — and while they may on the surface seem to share the same concepts of collectability and a love of art, they couldn’t be further apart. “We’re starting to see what NFTs may be good for, which is to give artists access to markets and marketplaces they otherwise may not have,” he says. Those who have previously struggled to find an audience for their work now can, thanks to the interest in art-based NFTs.

“The moves we make are very much going to be with the community in mind.”

But there is a separate bubble in collectibles, which Guadamuz believes are churned out solely for people to make money on, rather than for their artistic merit. “I don’t consider that to be art,” he says matter-of-factly. “It’s art in the same sense that Magic: The Gathering or Pokémon cards are art. There is an artistic expression there, but it’s very limited.”

That represents a shift in the art NFT space, where non-fungible tokens now are treated by purchasers as assets first, and art second. With this mindset, there are bound to follow some compromises. “We’re going to get Cryptopunks: The Movie,” Guadamuz speculates. “We have The Emoji Movie and The Angry Birds Movie. CryptoPunks: The Movie isn’t so farfetched.”

Silverman is keen to allay people’s fears. “It’s a very engaged community of collectors who hold CryptoPunks and feel identified with the punks they own,” she says. She acknowledges and respects the worries some CryptoPunk owners have. “To me, that’s an indication there’s excitement and skepticism, and all of that is understandable,” she says. “People are going to have to watch and see. The moves we make are very much going to be with the community in mind.”

What’s authentic?

Capitalism, of course, tends to ruin everything. The current situation with NFTs has parallels with the early days of online video. O.G. YouTubers were hobbyists who created content for the love of it. Then, as sponsorship money began to enter the space in the mid-2000s and becoming a creator became a vocation, others began joining the world with more commercial goals in mind.

Among school kids, being a YouTuber is now seen as a more attractive career choice than being an astronaut. And being a digital content creator is just the foundation point for a broad-based brand that spans different media. Ryan Kaji, the nine-year-old face of Ryan’s World, has developed his IP in collaboration with company pocket.watch to encompass everything from bed sheets to his own animated TV show.

Ty Duperron, chief operating officer of Tafi, which worked with Coca-Cola to develop virtual wearables for the soft drink company’s first-ever NFT, previously worked with Canadian creator management company BroadbandTV, one of the major players of the early YouTube boom. He says he can see “an interesting connection” between the two worlds but reckons there is a fundamental difference.

“I don’t know if it’ll end up quite like YouTube,” he says. “YouTube ended up being a very small competitive space very quickly. And I think one of the things that NFTs have as an advantage is we're still scratching the surface on that early adoption.” But in the same way that digital video creators now conceive of their branding as a launchpad for IP on and off the platforms they choose to make their living on, there are now conscious decisions to develop artwork or collectibles tied to NFTs that have a life beyond the small but growing space.

“Why does authenticity mean that you can’t make any money out of your work?”

UTA already has launched two dozen NFT projects on behalf of the agency’s clients and has been involved in brokering a number of digital assets deals. In July, UTA signed on as an advisor for Notables, an NFT sales platform, and in August partnered with Rally, a platform that mints new crypto tokens. “What’s so exciting to me is this is a space where IP is being originated in the ways we think about IP being originated in a story or a news article or a book,” says Silverman.

The change was already underway before the UTA–Larva Labs deal. “What we’re seeing now is people owning a part or a portion of a burgeoning entertainment IP brand,” says Zoe Scaman, founder of London-based strategy studio Bodacious. She points to Deadheads, an NFT line specifically set up with the intention of becoming an animated series. Deadhead owners, of which Scaman is one, will get to share in the profits from any Deadheads IP. “Imagine if you owned a character within the Marvel Comic Universe before it got catapulted to the success that it has been with Disney,” says Scaman. “I don’t necessarily think it’s a bad thing.

“We’ve had this kind of false tradeoff in our minds for such a long time around the starving artist being the authentic artist, and the artist who gets paid being the sellout,” she continues. “I just think it’s a false dichotomy. Why does authenticity mean that you can’t make any money out of your work? And why is making money out of your work making you into a bad person, or someone that's not necessarily giving back in some capacity?”

Yet until the point that NFTs’ ubiquity as media brands is established, Tafi’s Duperron admits there might be a bit of a bumpy ride as the NFT world adjusts to the new interlopers — and the interlopers try to figure out exactly where the boundaries are between their commercially driven goals and the appetite of the hobbyist market.

“I think you’re going to see really thoughtful, forward-thinking, paradigm-shifting creators’ projects.”

Duperron says he fears the “prescriptive” demands of a big company’s marketing team trying to foist their brand guidelines on a cultural space where creativity bubbles up from the bottom. “That’s where you lose that authenticity, and then you’re not going to get cool shit, you’re not going to get stuff that resonates with this audience, and you’re going to fall flat,” he says.

Whether any “cool shit” emerges from the UTA–Larva Labs deal remains to be seen, of course. Silverman, for one, says she’s excited to watch how things evolve. “I think you’re going to see really thoughtful, forward-thinking, paradigm-shifting creators’ projects [that] are going to maintain value over the long term,” she says. “We are long on this space.”