Table of Contents
- Key Takeaways
- 1. A Stone Dropped Into a Still NFT Lake
- 1.1 Sweep of 62 Cryptopunk NFTs
- 1.2 Why CryptoPunks, and Why Now? The Return of the OGs and the Rise of New Giants
- 2. The Infrastructure Value of the NFT Boom
- 2.1 The NFT Boom and the “Ultra Sound Money” Vision
- 2.2 Proven Impact Through Historical Data
- 3. The Crocodile and the Plover Bird: Ethereum and the NFT Boom
- 3.1 Will the Plover Bird Fly Again?
- 3.2 Can Past Dynamics Still Apply Today?
- 3.3 Awaiting the Next Plover Birds
- 4. Resource
Researcher
Related Projects
Key Takeaways
The NFT market is regaining attention through events like CryptoPunks sweeps, Pudgy Penguins expansion, and the emergence of Moonbirds. This movement directly drives on-chain activity on the Ethereum network, promoting $ETH burning and reinforcing Ethereum’s deflationary structure.
This trend is being fueled by the physical IP integration and financialization of NFTs, as well as rising $ETH prices that are stimulating investor sentiment. Although the spread of L2s has slightly altered the mainnet burn dynamics, the strong $ETH burning effect remains intact.
NFTs were one of the catalysts that moved the Ethereum economy, and now sectors like GameFi, SocialFi, and RWA show potential to follow. We are currently at the starting point of a symbiotic rise where Ethereum’s value grows alongside NFTs.
1. A Stone Dropped Into a Still NFT Lake
1.1 Sweep of 62 Cryptopunk NFTs
On July 21, 2025, a quiet yet unusual event occurred on the Ethereum network. A “sweep” — an aggressive investment strategy where an investor buys up many of the cheapest NFTs in a specific collection — took place, this time targeting CryptoPunk NFTs.
The wallet behind the sweep, whose owner remains anonymous, purchased a staggering 62 CryptoPunks in rapid succession, amounting to millions of dollars at the time. According to Etherscan, the CryptoPunks were quickly funneled into a single wallet from various sellers. As a result, the floor price of CryptoPunks surged to over 46 ETH — approximately $175,000.
This massive purchase reignited excitement in the long-dormant NFT community. Speculation swirled around the identity of the buyer and the motives behind the acquisition. But more importantly, it served as a powerful signal that market sentiment might be shifting from “fear” back to “greed.”
1.2 Why CryptoPunks, and Why Now? The Return of the OGs and the Rise of New Giants
Source: opensea.io
What makes the recent CryptoPunk sweep particularly noteworthy isn’t just the spotlight on a single project — it signals a broader shift across the NFT market. We’re witnessing the simultaneous resurgence of “OG” (Original Gangster) projects alongside the rise of new powerhouses, breathing new life into a market that had long been stagnant.
1.2.1 CryptoPunks
Source: cryptopunks.app
The return of OG projects like CryptoPunks instills a strong sense of trust in the market. Created by Larva Labs in 2017 to explore blockchain-based ownership, CryptoPunks are the origin of the PFP (Profile Picture) NFT movement and remain a living piece of digital history. The 10,000 algorithmically generated 24x24 pixel portraits were among the first NFTs to prove the concept of true digital ownership on Ethereum.
Despite having no built-in utility, CryptoPunks hold unmatched value as digital assets. Their rarity — defined by traits like aliens, apes, and zombies — helped establish how scarcity can directly translate into asset value within the NFT market. Today, CryptoPunks are more than just a trend; they’ve become iconic digital blue-chip assets that retain value over time.
1.2.2 Bored Ape Yacht Club (BAYC)
Source: boredapeyachtclub.com
Another iconic OG project that can’t be overlooked is Bored Ape Yacht Club (BAYC). Launched in 2021, BAYC redefined NFTs — not as mere digital images, but as a fusion of community and brand. It fundamentally shifted the paradigm of what an NFT could be.
The most innovative aspect of BAYC was its full transfer of commercial IP rights to holders. This meant that holders weren’t just collectors — they became business partners who could build with the BAYC brand.
Built on this IP model, BAYC developed a powerful and exclusive community, offering holder-only parties, limited-edition merchandise, and more. The project expanded its ecosystem through airdrops like the Bored Ape Kennel Club (BAKC), Mutant Ape Yacht Club (MAYC), and the launch of its native token, $APE. These moves rewarded long-term holders and helped transform BAYC from an NFT collection into a full-blown cultural phenomenon — and arguably the most successful Web3-native brand to date.
1.2.3 Pudgy Penguins
Meanwhile, new contenders are also rising fast — most notably Pudgy Penguins, which, as of July 21, 2025, are trading at a 16.6 ETH floor price on OpenSea. Pudgy Penguins is a remarkable comeback story: once teetering on the brink of bankruptcy, it was revived through community strength and propelled into the spotlight by a differentiated IP strategy aimed at mass adoption.
Under the leadership of CEO Luca Netz, the adorable penguin characters were transformed into physical plush toys sold at Walmart, dubbed "Pudgy Toys." This move introduced the brand to everyday consumers unfamiliar with NFTs, becoming one of the most successful examples of bridging Web3 with the real world — and significantly amplifying Pudgy Penguins’ brand equity.
Source: Luca Netz X
Building on this success, holders now display strong conviction and long-term belief in the project’s potential. Through the "Overpass" platform, they can license their penguin IP to generate direct revenue. Additionally, the ecosystem token $PENGU is being positioned for broader financial integration, with a spot ETF application filed with the CBOE, signaling potential entry into traditional finance.
Tied into the Pudgy World metaverse and the broader blockchain ecosystem Abstract, Pudgy Penguins is increasingly seen not as a fleeting trend, but as a sustainable and scalable digital IP empire in the making.
1.2.4 Moonbirds
Source: Moonbirds X
Another project drawing renewed attention is Moonbirds. Launched by PROOF, the brainchild of renowned tech entrepreneur Kevin Rose, Moonbirds made a strong debut in the NFT space. One of its standout early features was “Nesting” — a mechanism that rewarded holders with greater benefits the longer they held their NFTs, incentivizing long-term ownership and rapidly propelling Moonbirds to blue-chip status. Many holders believed in PROOF’s vision and the long-term value of its ecosystem.
Source: Orange Cap Games X
However, the project faced several turning points. A controversial move came when Moonbirds announced a CC0 license, releasing its IP into the public domain — causing confusion and division within the community. In February 2024, the project was acquired by Yuga Labs, but by June 2025, it was sold again — this time to Orange Cap Games, a studio that had grown with Yuga’s backing.
What’s fueling Moonbirds’ resurgence today is the fact that Orange Cap Games was also behind the TCG (Trading Card Game) development of Pudgy Penguins, one of the most acclaimed revival stories in the NFT space. Investors are now betting that Orange Cap will bring the same success formula to Moonbirds, applying its proven IP expansion know-how.
In other words, holders are hopeful that Moonbirds will benefit from the ecosystem expansion driven by Abstract, much like Pudgy Penguins did. This renewed belief — that Moonbirds could ride the same growth trajectory — is one of the strongest forces behind its recent price momentum and resurgence in hype.
2. The Infrastructure Value of the NFT Boom
The NFT market is stirring again — from the large-scale CryptoPunk sweep to the Moonbirds revival buzz and Pudgy Penguins’ real-world expansion. More important than the return of NFT meta itself is the infrastructural implication: a renewed opportunity for Ethereum to benefit directly and meaningfully at the protocol level.
2.1 The NFT Boom and the “Ultra Sound Money” Vision
The NFT ecosystem inherently revolves around on-chain activity. Every mint, trade, bid, and cancellation triggers transactions on the Ethereum blockchain, consuming gas fees. Central to this mechanism is EIP-1559, introduced in August 2021. This proposal split fees into a base fee and a priority fee, with the base fee being fully burned. As a result, Ethereum is evolving into a deflationary asset — the more it's used, the scarcer it becomes.
Source: ultrasound.money
While Bitcoin is capped in supply and branded as “Sound Money,” Ethereum — post-EIP-1559 — promotes its vision of "Ultra Sound Money." The idea is simple: increased network usage leads to more ETH burned, which enhances scarcity and value simultaneously.
Source: ultrasound.money
NFTs are the most direct activators of this burn mechanism. According to data from ultrasound.money, after EIP-1559, the NFT marketplace OpenSea ranks second only to ETH transfers in cumulative ETH burned by a single dApp — over 230,000 ETH have been burned via OpenSea. This underscores how NFT activity plays a catalytic role in realizing Ethereum’s value-preservation narrative.
In this model, NFTs function beyond content; they act as economic operators that activate Ethereum’s on-chain economic engine. The NFT boom, therefore, isn’t just a cultural or speculative event — it becomes a direct, infrastructural mechanism that powers Ethereum’s deflationary structure, underpins ETH's market value, and gives tangible form to its role as a store of value.
2.2 Proven Impact Through Historical Data
Source: Nansen X
The theoretical potential of NFTs as catalysts for Ethereum’s value has already been proven in practice, most notably during the "NFT Summer" of mid-2021. That period saw explosive interest in pioneering collections like CryptoPunks and Bored Ape Yacht Club (BAYC). NFT activity surged to unprecedented levels — coinciding with the rollout of EIP-1559, one of Ethereum’s most significant upgrades.
Source: Coin Metrics | The Rise of NFTs
NFT marketplace OpenSea rapidly became the hub of the Ethereum ecosystem. With millions minting, buying, and selling NFTs, OpenSea-generated transactions consumed a large portion of Ethereum’s total gas fees. According to blockchain analytics platform nansen.ai, as of September 2021, OpenSea rivaled Uniswap as one of the highest gas-consuming applications on Ethereum, far outpacing many DeFi protocols.
At the same time, Coin Metrics reported that NFT-related transactions made up as much as 16% of all Ethereum activity — a powerful quantification of how deeply NFTs impacted the network.
Source: Ohtersidemeta X
Then in May 2022, Yuga Labs’ mint event for its metaverse project "Otherside" provided another dramatic example. Tens of thousands of users competed simultaneously for limited assets, pushing gas fees to extreme levels. Some users paid thousands of dollars in gas for a single transaction. In just one day, over 70,000 ETH — more than $200 million at the time — was burned, delivering Ethereum a rare moment of true deflation.
These historical precedents clearly show that NFT activity can materially reshape Ethereum’s economic structure. The subtle heat now returning to the NFT market — rising transaction volumes and the return of OG projects — could signal the beginning of a new cycle, one where ETH’s infrastructure-level value is elevated once again.
3. The Crocodile and the Plover Bird: Ethereum and the NFT Boom
The recovery of the NFT market has clearly demonstrated its positive value impact on Ethereum. The relationship between the two can be likened to that of a crocodile and a plover bird: the plover (NFTs) operates atop the safety and strength of the crocodile (Ethereum), and in return, it contributes to the ecosystem by burning ETH supply, thereby increasing Ethereum’s inherent value.
This analogy underscores a key point — NFTs are not simply freeloading passengers on Ethereum’s infrastructure. Rather, they can act as genuine, symbiotic partners, helping to power and sustain Ethereum’s long-term economic model.
3.1 Will the Plover Bird Fly Again?
Here lies the core question: Will the NFT boom return? While it may not take the form of the unchecked speculative mania of the past, there are increasingly strong signals that the NFT market could be poised for a meaningful rebound:
Market Maturity and Learning: In 2021, many NFT projects relied heavily on hype and memes. Today, the landscape has evolved. Projects like Pudgy Penguins are proving that NFTs can successfully expand into physical IP and brand ecosystems. The market has internalized the idea that "NFTs are brands," and is further maturing with the rise of professional platforms like Blur, as well as NFT financialization tools like derivatives, lending protocols, and liquidity pools.
Macro Cycles Favoring High-Beta Assets: With Bitcoin spot ETFs approved, fresh capital has entered the crypto space. Historically, Ethereum and its ecosystem have been the primary beneficiaries of post-Bitcoin flows. Within Ethereum, NFTs offer the highest volatility and return potential, making them a natural target for investors willing to take on higher risk in pursuit of outsized gains.
Rising ETH Price as a Catalyst: A rising ETH price acts as a powerful stimulant for the NFT market. As ETH appreciates, investor portfolios swell, increasing their capacity and willingness to take risk. This pattern was evident during the 2021 NFT boom, where ETH was on an uptrend, and users spent directly from their ETH holdings to mint or purchase NFTs.
Moreover, since most NFTs are denominated in ETH, price appreciation creates a “price illusion” — NFTs appear cheaper in fiat terms, even if their ETH value remains constant. This often prompts impulse decisions: “ETH is up — maybe I’ll grab an NFT too.” The result is a virtuous cycle: greater purchasing power + improved sentiment + pricing illusion = reignited NFT momentum.
Of course, skepticism remains. Burned investors from previous cycles remain cautious, and the space is still crowded with low-quality, rushed projects. But this time, key fundamentals have changed: the infrastructure is more mature, and multiple success playbooks have been proven. NFTs are no longer a fleeting trend — they are becoming an integrated part of a structured and evolving ecosystem.
3.2 Can Past Dynamics Still Apply Today?
Even if the NFT boom returns, can Ethereum still enjoy the same massive burn effects as before? This question leads us directly to the rise of Layer 2 (L2) solutions.
Take the 2022 "Otherside" minting event, for example. At that time, nearly all transactions occurred on Ethereum’s Layer 1 (L1). The result: record-high gas fees and one of the largest single-day ETH burns in history. But the current landscape has shifted. A significant portion of user activity and project deployment has migrated to L2s such as Arbitrum, Optimism (OP), and Base, reducing direct gas consumption on the L1.
However, that doesn’t necessarily mean Ethereum’s value accrual through ETH burning is diminishing:
Blue-Chip NFTs Remain on L1: Collections like CryptoPunks and BAYC still conduct their high-value trades on Ethereum mainnet due to its superior security and decentralization. Each of these large transactions still generates high gas usage and thus contributes meaningfully to ETH burn.
L2s Don't Replace L1 — They Feed It: Layer 2 networks compress and batch their data and ultimately settle it on Layer 1. As usage across L2s scales, competition among rollups intensifies — leading to increased L1 activity and higher gas fees. This results in more consistent and structural ETH burn over time, rather than just short-term spikes.
In essence, Ethereum’s burn model is evolving into a hybrid structure:
“explosive short-term spikes + long-term structural burn.”
While the mechanism may have changed, it’s too early to say that total ETH burn will decline. Instead, the system is maturing — aligning Ethereum’s long-term deflationary vision with a more scalable and layered ecosystem.
3.3 Awaiting the Next Plover Birds
NFTs have proven to be effective symbiotic partners to Ethereum — much like plover birds to crocodiles — directly activating the ETH burn mechanism and helping to reinforce the value of the network. But NFTs may not be the end of this story. In fact, they could simply be the first signal of a new wave of high-impact applications poised to fuel Ethereum’s next chapter.
There are already several strong contenders for the next “plover bird”:
GameFi: In GameFi ecosystems, every user action — from item crafting to combat results — can be recorded on-chain, leading to recurring gas usage rather than isolated minting events. If the on-chain gaming meta returns, it could act as a sustained engine for ETH burning and network activity.
SocialFi: Platforms like Farcaster are pioneering on-chain social interactions. Imagine a world where hundreds of millions of people "like" posts — each click a microtransaction, each microtransaction burning ETH. This vision turns everyday social activity into economic fuel for Ethereum.
Source: etherscan.io
RWA: Real-world asset (RWA) tokenization is perhaps the most reliable and scalable ETH burn driver on the horizon. Stablecoins like USDT and USDC already account for a significant share of ETH burned — just through transfers. If real estate, bonds, or equities are brought on-chain at scale, they could anchor a persistent and structural burn mechanism, deeply embedding Ethereum into the global financial system.
In conclusion, the sweep of 62 CryptoPunks wasn’t just a headline event — it was a signal that the mutualistic cycle between NFTs and Ethereum is once again coming to life. NFTs are laying the groundwork, but it’s GameFi, SocialFi, and RWA that may be the next generation of plover birds, ready to elevate Ethereum’s value and utility even further. We may not be witnessing a repeat of a passing trend — we may be standing at the start of a new structural era, one where digital ownership becomes a defining pillar of Ethereum’s long-term value proposition.
4. Resource
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