Bloomberg: Even in the metaverse, not all identities are equal
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Bloomberg: Even in the metaverse, not all identities are equal
The complexity of the real world begins to seep into the metaverse, where identity is both a reflection of and a determinant for social capital.
Navigating Web3 tides with focused insightsBy Misyrlena Egkolfopoulou, Akayla Gardner
Translated by Yangz
The complexities of the real world are beginning to seep into the virtual stage of the Metaverse, where identity both reflects and determines social capital.
Price disparities based on race, gender, and skin tone among digital avatars are evident in CryptoPunks, a popular NFT collection—contradicting the utopian and egalitarian ideals championed by the world closely tied to cryptocurrency, decentralized finance, blockchain, and non-fungible tokens.
According to participants and observers in the space, part of this price gap stems from the lack of diversity among investors who favor these status symbols—a demographic dominated by men and white individuals. Female Punks and those with darker skin tones tend to sell for less than their male or lighter-skinned counterparts.
CryptoPunk investors argue that this pricing disparity isn't driven by personal bias or racism, but rather by the fact that current high-paying buyers—who largely resemble one another—are simply not bidding as aggressively on avatars that don't look like them.
"If you look at the blockchain space, it’s essentially skewed toward white males," said Tony Herrera, a California-based immigration activist who owns 60 CryptoPunks. "If one Punk is dark and another is light, the lighter one will be more desirable."
Tony Herrera
To understand how identity functions in the virtual world, consider the case of Richerd Chan. The Vancouver-based engineer and entrepreneur wanted to solidify his reputation as a crypto pioneer and thus purchased a digital avatar.
The JPEG file reportedly cost him over $80,000—or 45 ETH in cryptocurrency—making it Chan’s single largest expense ever. He spent two weeks searching for the perfect online persona. On March 31, he clicked “buy” on this pixelated image: a medium-skinned male wearing 3D glasses and smoking a cigarette.
"It felt like a very natural self-expression," said 37-year-old Chan. "The 3D glasses make it stand out, and even though I don’t smoke in real life, it gives it an edgy feel." As an Asian man, Chan appreciated the slightly darker skin tone in the image. "I identify with it."
Chan wasn’t joking about its value. In October, he turned down an offer of $9.5 million from another online enthusiast for the avatar. Chan said the proposal was bizarre, but his digital identity is not for sale.
This year alone, Chan has reportedly spent 143 ETH—now worth over $600,000—on four pixelated avatars, all from the CryptoPunks collection. For him, owning a CryptoPunk signifies OG status in the crypto world, or proof of the ability to pay a steep price to join an increasingly exclusive club.
In this digital realm, the value of social capital encoded in your pixels varies according to different attributes. At the top tier of expensive NFT avatars, prices fluctuate based on accessories, hairstyles, clothing, and skin color. In short, not all Punks are created equal.
Investors say uniqueness and scarcity are key drivers of CryptoPunks’ and similar NFTs’ prices in the free market for digital goods. For example, out of the 10,000 existing CryptoPunks, only nine are “Aliens.” Recently, Sotheby’s auctioned one Alien for nearly $12 million. Additionally, the 24 Apes and 88 Zombies in the collection command higher prices than typical Punks due to their relative rarity.
By gender, there are 6,039 male Punks and 3,840 female ones, with fewer female Punks circulating. According to DeGenData, since August, 2,124 male CryptoPunks have been sold with a median minimum sale price of 99 ETH. During the same period, 1,165 female CryptoPunks were sold, with a median minimum sale price of 95 ETH.
Moreover, data shows that since NFTs exploded into the mainstream in August, average weekly minimum sale prices for medium- and dark-skinned CryptoPunks have consistently trailed those of lighter-skinned Punks—and similarly, female Punks have priced lower than male ones.
Male Punks Price Statistics
Since August, weekly average minimum sale prices for darker-skinned male CryptoPunks have lagged behind their lighter-skinned counterparts.
Source: DeGenData; data based on lowest prices without adjustments for features that may drive additional value
Meebits—a similar avatar NFT resembling 3D Lego figures—shows a similar pricing trend. Listings show that on OpenSea, the digital asset marketplace, most low-priced characters are designed to resemble Black people. In May, Herrera expressed frustration on Twitter that the cheapest Meebits were all Black-skinned. He called on fans to collectively buy more Black NFTs to boost their prices. Herrera now believes the trend isn't rooted in racial bias but simply reflects lower purchase volumes.
"You can buy anything you want, as long as you have the budget for it," Herrera said. "People of color will become limited editions."
Herrera once owned over 100 CryptoPunks, starting when they cost less than $10. In 2017, savvy crypto fans could claim them for free when CryptoPunks first launched. By January this year, some were being bought at what's now considered a modest price—just a few thousand dollars.
Now, entering this corner of the cryptocurrency world requires tens of thousands of dollars, sometimes millions. Amid surging interest from companies including Visa and Christie’s, CryptoPunks prices skyrocketed. As of December 1, owners had listed NFTs for sale ranging from nearly $400,000 to $24 billion. The highest recorded sale exceeded $7 million.
John Watkinson, co-founder of Larva Labs, the company behind CryptoPunks, said he aimed to create a diverse cast of characters appealing to a broad base of collectors. "We’re frustrated by the pricing differences across race and gender in CryptoPunks," Watkinson said. "Unfortunately, because the market is purely decentralized, we have no levers to directly influence it."
Natalia Karayaneva, founder of real estate firm Propy Inc., bought a mohawk-wearing female CryptoPunk in March on her fiancé’s recommendation. She recently sold the Punk for around $150,000—triple her purchase price.
"There aren’t many women in senior positions within the crypto community who can afford these high-priced CryptoPunks," Karayaneva noted, observing that female Punks typically trade below male ones.
Gender Dynamics
Over recent months, female CryptoPunks have traded at a discount compared to male ones.
Beyond rarity, certain traits push Punks to the top of the price charts. Hoodies, 3D glasses, VR goggles, headbands, top hats, and beanies are features investors are willing to pay a premium for. Most Punks have two or three traits, and generally, the more traits a character has, the higher its price. Among the fixed set of 10,000 collectibles, only one CryptoPunk has seven traits: cigarette, earring, mole, buck teeth, classic sunglasses, top hat, and mustache. It is widely regarded as the most valuable CryptoPunk.
The wide range of available traits allows investors to creatively adopt Metaverse personas with characteristics entirely different from their “real” identities.
According to NFT investor Nick Kneuper, the high price of each CryptoPunk means most buyers must choose carefully, often selecting an avatar that best represents them. He regrets selling three of his own Punks in August. More importantly, Kneuper says even those who can afford multiple Punks may hesitate to pick one that doesn’t align with their racial identity.
"Some might worry that if they’re white but use a Black Punk as their avatar, they could be accused of digital blackface," Kneuper said.
Female Punks Price Statistics
Since August, weekly average minimum sale prices for darker-skinned female CryptoPunks have trailed their lighter-skinned counterparts.
Longtime crypto bull and billionaire Mike Novogratz tweeted that he was “bothered” by real-world racial biases creeping into the Metaverse, stepping into this particular debate. On November 9, Novogratz’s tweet sparked a wave of responses about what is—and isn’t—acceptable in the Metaverse.
The tweet came days after Galaxy Digital Holdings Ltd., Novogratz’s cryptocurrency firm, purchased Punk 8466—a Black-skinned male wearing an eye patch, headband, and beard. According to Larva Labs, the Punk sold on October 30 for 98.50 ETH ($421,543). A spokesperson for Galaxy Digital declined to comment on the company’s decision to acquire a Black-skinned Punk.
Black NFT investors are engaging in the conversation through purchases. Web Smith, founder of media company 2PM Inc., said: “As more Black investors enter this space, I believe change is happening, and these dynamics will shift. You’ll see many high-net-worth individuals representing broader American diversity enter the market, and six months from now, we won’t be having this conversation anymore.”
Ameer Suhayb Carter
One such individual is Ameer Suhayb Carter, a user experience designer who founded Crypto Cookout, a majority-Black collective. This 450-member club jointly purchased two CryptoPunks using a model known as fractional ownership, making every member a partial owner of both Punks.
"We didn’t intentionally create this imbalanced market," Carter said. "But we’ve seen that things associated with Blackness may or may not be considered cool—so we’re taking action until they are."
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