Regular art and digital art face a similar hurdle: insufficient liquidity.
A new contract rolled out by Ark.Gallery hopes to inject some fluid in the CryptoPunk market by letting people place blind bids backed by ether (ETH), called bounties, for the increasingly in-demand digital collectibles.
Launched Friday, the bounties give CryptoPunk owners the option to instantly cash out by accepting any of the live bids, as opposed to listing their product and waiting on bids in a marketplace. On the buyer side, instead of placing bids on multiple collectibles (thereby locking up more ETH) users can place a bounty on “any punk” and wait for an owner to accept it.
One of the first blockchain-enabled art projects, CryptoPunks were built by Larva Labs and debuted in June 2017. Each of the 10,000 punks are unique characters and are sorted by traits such as male, female, alien, spots/no spots, etc.
Some of these traits – like punks with beanies or zombie punks – are quite rare and tend to be more expensive.
The collection relies on Ethereum-based non-fungible tokens (NFTs) but predates the ERC-721 token standard that most NFTs currently use, perhaps adding to the CryptoPunks allure.
While this was a hiccup encountered in listing the punks on third-party marketplaces, it changed when the “wrapped punks” smart contract was launched by Ark.Gallery, a decentralized autonomous organization (DAO) for shared NFT ownership.
The smart contract lets owners “wrap” their punk tokens into the ERC-721 standard. Put simply, wrapping the punks makes them more easily swappable. This allows owners to officially list their punks on popular marketplaces like OpenSea and Rarible, which in turn has driven up prices.
So much so that Larva Labs tweeted a thread explaining sales of 1,100 ETH (approximately $387,451) during the second week of September.
On Saturday, a wrapped punk with rare traits (combination of zombie and beanie) sold for 185 ETH (roughly $65,062) on the Nifty marketplace.
Ark.Gallery charges a fee of 2.5% on every closed deal “so that the liquidity provider does not have to pay anything extra,” Roberto Ceresia, founder of Ark.Gallery, said in an email.
The platform’s history of “bounties” shows that a total of 26 have been executed as of Tuesday afternoon, at an average price of 3.64 ETH ($1,238). According to Ceresia, the early numbers were encouraging and he expects them to grow as the platform adds bounties for other collections including Autoglyphs.
“I think that they do have a wall of liquidity that is there, ready to be spent. It’s a great solution for asset owners,” said Ceresia, referring to the bounties.
While currently under development, Ark.Gallery’s main platform is geared toward shared ownership of digital collectibles. The platform allows people to own a fraction of a token that might otherwise be prohibitively expensive for many users.
Fractional owners of the NFT also get voting rights on sale offers and, if successful, the proceeds are distributed proportionally.
