The news hit the NFT world like a digital asteroid: Yuga Labs, the behemoth behind Bored Ape Yacht Club, is offloading CryptoPunks to the Infinite Node Foundation, a non-profit. At first blush, that seems nearly altruistic, a nod to saving art. But dig just a little bit deeper, and a much more alarming picture comes to light. Is this really the national epitome of a good social action? Or is it, instead, a legacy of leadership that has built a thoughtful exit strategy into his administration? So what does this all mean for the NFT ecosystem’s foundation and its future? Most importantly, it directly hurts the creators who rely on valuable royalties.

Royalties Are Vital, Are They Dying?

Let's be blunt: the NFT market isn't exactly booming right now. Trading volumes are down across the board, floor prices are tanking, and that shiny new veneer of outrageous overnight wealth has mostly worn off. Data doesn't lie. Take a peek at the blockchain, and you’ll find that royalty payments are getting smaller and smaller. So, what gives with Yuga Labs, a company awash in Ape-related cash, suddenly becoming so interested in donating a flagship project.

The answer, I fear, is found in the unsexy yet no less important province of royalties. For a majority of digital artists—many of whom live in emerging economies such as South Asia—secondary sale commissions are critical to their survival. These short commissions are the lifeblood of their careers. I've seen firsthand how these artists struggle to navigate broken royalty structures, often facing exploitation and a lack of legal recourse.

This sale sets a dangerous precedent. That a blue-chip project like CryptoPunks can freely be gifted to a non-profit illustrates the outrageousness of this commercialization. What does that tell us about the long-term viability of NFT royalties moving forward?

The deal’s terms are a closely-guarded secret, but there’s an interesting suggestion that future tax write-off for Yuga Labs might be involved. You don’t have to be a financial wizard to feel it! The Infinite Node Foundation supports indigenous, culturally significant NFTs through their collecting practices. Then, they’ll feature this amazing collection at their new exhibition space in downtown Palo Alto. Everyone wins, right?

Except for the artists. The small-time creators who bought into the promise of decentralized ownership and fair compensation. Because it truly is them who we are leaving behind.

Decentralization: Dream or Deception?

The NFT space has allowed for this because it was created on the principles of decentralization and democratized ownership. CryptoPunks specifically, after all, stood for a revival and rejection of the traditional art world, its gatekeepers, and opaque practices. Still, here we are, watching the ownership rights of a significant NFT project being handed over to a non-profit organization with unknown financial supporters. How decentralized is that?

This action further entrenches the very power imbalances they are now moving to address in the NFT marketplace. In the middle, large corporations such as Yuga Labs control and winners take all individual creators are ever more push. Continue reading… And, as you might imagine, I can’t help but draw parallels with the conventional art world. Just a handful of galleries and auction houses have the ability to control the market. Or are we just duplicating the same flawed system in data-driven format?

The Infinite Node Foundation is dedicated to preserving the legacy of CryptoPunks. Others have criticized whether this goal is really so altruistic, or if it’s a cover-up. So is this project meant to bring the NFTs experience to more scholars and curators? Or is it about sanitizing the brand and managing the narrative? So is this true preservation in action, or just a really smart corporate rebranding ploy?

Social Good or Financial Maneuver?

Having acquired all 10k punks, the Infinite Node Foundation’s goal is to make their exhibits in museums. Great! How does that help artists in any way? They work exceedingly hard to pour their heart and soul into new, innovative NFT projects. And how does it excite and inspire the next generation of digital makers?

I am calling out Yuga Labs here. And we’re led to believe that it’s all in service of the greater good. But is it? Or, alternatively, is it simply a duplicitous approach to offloading a depreciating asset while retaining intellectual property licensing rights. First, how can we believe that a billion-dollar company has decided on its own to embrace the cause of social good? It’s easy not to believe their motives. Or is this simply a tax write-off in the shape of philanthropy?

This whole situation reeks of hypocrisy. Environmental impact aside, NFTs have the potential to change the art world forever and give the power back to creators. In reality, a market increasingly controlled by a handful of deep-pocketed, well-connected players is prioritizing profit over principle.

The CryptoPunks sale isn’t an isolated transaction. It’s a sign of a broader malaise within the NFT ecosystem. This should serve as a wake-up call for everyone. It’s time to reconsider our priorities and earnestly defend a more equitable and sustainable future for all digital creators! It’s time to require transparency, advocates! We need to stand up for creator royalties and against this dangerous, concentrated power by a few.

Otherwise, the NFT dream will fade away into the ether, a cautionary tale of hype and disillusionment. And that, dear readers, would be a shame.