PunkStrategy - slightly sophisticated ponzi

TLDR

• ◆NFTs move in bursts - sustained demand is rare, but CryptoPunks remain the blue-chip anchor, holding relative value vs ETH/SOL.
• ◆PunkStrategy ($PNKSTR) financializes NFTs via a reflexive flywheel: a 10% trade tax funds Punk floor buys, relisting, and token buybacks/burns.
• ◆Expansion via NFTStrategy extends the model to other collections, adding royalties for creators while funneling volume back to PNKSTR.
• ◆Valuation is compelling - current FDV/Revenue ~0.6× vs comparable projects at 4×; potential upside capped around $200–500M FDV (10–20% of CP market cap).
• ◆Key risk: the flywheel depends entirely on trading volume - if activity stalls, revenue and burns collapse. Still, early traction and OG NFT capital suggest there’s speculative room to run.

Core Thesis

• ◆NFTs will not have a sustained bid and only gain attention in spurts and/or via novel mechanisms that either bring attention to a new meta or add the speculative element to NFT trading
• ◆CryptoPunks (proxy for blue chip NFTs) have actually kept up in terms of performance relative to majors (outperforming ETH/SOL while just about underperforming BTC) over a 1Y time horizon - implies there is clearly some floor here and/or some bid

• ◆Do not see CPs reaching previous cycle highs but maybe there might be some plays around it/other blue chips that can work or atleast get the OG NFT capital to be deployed
• ◆This is where PunkStrategy comes in
• ◆PunkStrategy ($PNKSTR) is an experimental on-chain flywheel designed to financialize NFTs, starting with CryptoPunks. It turns NFT collections into “perpetual NFT machines” by linking an ERC-20 strategy token with automated NFT floor buying, relisting, and token buyback/burn mechanics.
• ◆i.e. it a pretty typical flywheel based ponzi just with a mix of speculation (meme) and NFTs

How It Works

• ◆The team launched a memecoin called PNKSTR as the core of the flywheel
• ◆Each $PNKSTR DEX trade incurs a 10% tax.
  • ◆8% goes to treasury → used to buy floor CryptoPunks.
  • ◆1% to TokenWorks supporters.
  • ◆1% to TokenWorks team.
• ◆NFT Loop:
  1. ◆Treasury buys a floor Punk.
  2. ◆Punk is relisted at 1.2× purchase price.
  3. ◆When sold, proceeds buy back and burn $PNKSTR.
• ◆Dual Effect:
  • ◆Supports Punk floor with consistent buy pressure.
  • ◆Deflates $PNKSTR supply, raising scarcity.

Expansion: NFTStrategy

• ◆The model has been generalized and any collection can issue its own “strategy token.”
• ◆The team has launched 8 other strategy tokens
• ◆Same mechanics (10% tax), with two tweaks:
  • ◆1% of fees go directly to the NFT collection’s creator (honoring royalties).
  • ◆1% of fees used to buy/burn $PNKSTR, linking all strategies back to the original ecosystem.
• ◆There has been traction with Punkstrategy currently holding 18 CPs and buying back/burning 3% of the total PNKSTR supply.

• ◆The token has been seeing a gradual pickup in daily volumes (i.e. the core trigger for the flywheel) with 7d daily average volumes at around ~$5m (~$2b ann.). Obviously limited amount of data to annualize but you get the gist -there is atleast initial tractionSource: Dune
• ◆The protocol is also currently averaging ~$400k in daily revenue (i.e. the 8% cut + the 1% that PNKSTR gets from other strategy tokens)Source: Dune

Valuation

• ◆From a FDV/Revenue perspective, this thing is cheap. Like really cheap and is trading at around 0.6.
• ◆I don’t have any good relative comps here but let’s take the current CP market cap as proxy for how big we think this can grow.
  • ◆CP’s current mcap is $2b
  • ◆At its peak it was around $4b
  • ◆Assuming a 10% of this range, implies a range of around $200m to $400m FDV for PNKSTR
  • ◆Why 10%? just from a FDV/rev perspective, a ratio of 4 (which is where something like a PUMP or CARDS trades), we end up with a FDV of just over $500m - and hence, seems like a decent enough anchor.
• ◆There are a couple of concerns here:
  • ◆This is slightly sophisticated ponzi flywheel - hence why i think the upside is capped. Once that flywheel fails, its hard to pick it back up again.
  • ◆I don’t think this will have enough mainstream attraction to justify a run above $500m FDV. Again - taking the recent example of CARDS (which coincidentally peaked at around 10% of pokemon’s TCG mcap), it needed a big narrative push to get to over $500m FDV. Hence, again, why i think the upside might be capped
  • ◆But, on the other hand, there is clearly OG NFT money being involved in this trade, with Opensea also openly acknowledging the tokens, which gives me hope that the thesis still stands - its something new within the NFT space while still focusing on collections that have broadly performed well relative to the majors.

KPIs

• ◆PNKSTR daily trading volume
• ◆Daily revenue
• ◆Current FDV/ann. Revenue ratio.
• ◆Relative valuation:
  • ◆PNKSTR FDV vs. CryptoPunks FDV.

Takeaways

• ◆PNKSTR is primarily a speculative token - a bet on CryptoPunks’ continued cultural dominance and liquidity.
• ◆Its innovation lies in merging meme-coin mechanics with NFT floor-support and creator royalties.
• ◆Sustainability hinges on ongoing trading volume; without it, the flywheel breaks.
• ◆Upside can be capped but there is enough substance to take a punt here