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PunkStrategy

PunkStrategy
09-06-25•punkstrategy.fun/•contract

Project Overview

PunkStrategy is an ERC20 token on Ethereum with a simple mechanism for buying and selling CryptoPunks while burning token supply, forever.

Mechanics

  • A token with a 10% buy/sell tax.
  • 8% of each trade is added to the Punk-buying pool.
  • 1% is distributed to FundingWorks NFT holders.
  • 1% is taken as rake for TokenWorks.
  • Fees from $PNKSTR trades accrue in the smart contract until enough has been accumulated to buy the floor Punk.
  • Anyone can trigger the ‘buyPunk' function, but this is usually deployed by a bot taking the arbitrage between our bid and the current floor.
  • The CryptoPunk is then listed for 20% higher than its purchase price.
  • If the protocol-owned Punk sells, all ETH is used to buy and burn $PNKSTR.

Backstory

  • NFTs have what most memecoins don’t: community, coupled with the knowledge that you actually own something special.
  • We wanted to explore NFT fractionalization and rally the stickiest community in NFTs: CryptoPunks.
  • As Punk holders ourselves, we believe they are one of the few assets that are a safe-haven to hold and will appreciate over time, along with Bitcoin and Ethereum.
  • We pitched the idea to a few friends (@Deeze, @andy, and @quasimatt) and most of them hated it, saying it was a worse version of NFTX/Fractional (two defunct fractionalization protocols).
  • We still felt the idea was strong enough to release, but unsure of how successful it would be. But we figured that if it managed to buy a single Punk, that momentum could be carried further.

The Launch

  • Stealth launched on Twitter
  • Launched on Ethereum with a custom Uniswap v4 hook.
  • Initial marketcap started out to ~$50k.
  • The token was sniped instantly, as it was launched by the TokenWorks wallet.
  • The 10% buy tax was always applied, and there was a 50% sell tax applied until the first Punk that was bought.
  • This allowed snipers to sell for a profit, but forced them to give most of it back to the protocol, resulting in a healthier token.
  • The first Punk was bought 2 days after launch, for 48.39e.
  • The 50% sell tax was dropped to 10% automatically after buying the Punk.

What Went Right

  • For previous projects, we shared details of launches in the TokenWorks Discord. We quickly learned there were advanced actors with the FundingWorks token that would snipe each launch. As a result of not revealing any upcoming information to the Discord, the token had fewer snipers moving forward.
  • There is always something to look forward to with the token, which makes it extremely unique. If there was a big buy, the price of the token has gone up! If there was a big sell, the price of the token has gone down, but the protocol is closer to buying another Punk. As long as there is a Punk held in the protocol, there is always something to rally behind in the future.
  • Almost all volume of the token flowed through the hook for the first few weeks.
  • At its initial peak, the token reached a marketcap of $300m with over $100m in volume.
  • Like all of our tokens, we refrain from overzealous marketing (which is all too common in crypto). We only post milestones and facts of how the protocol is operating. We firmly believe this is a breath of fresh air.
  • The community that has rallied around PunkStrategy is insanely strong, even though the token has ~10k holders. This may seem like a small amount compared to other tokens, but it’s important to note how organic the launch and overall token ecosystem has been. It’s extremely easy to boost stats of a token for pennies on Base / Solana, whereas on Mainnet, everything has a cost.
  • As of 1/12/26, 1944e of fees have been accumulated for the protocol. 43 Punks have been purchased, with four selling at a 20% markup, which burned 5% of the $PNKSTR supply.

What Went Wrong

  • Within the first week, we found two critical bugs.
  • The first bug was that the contract offered a 0.01e reward to whoever called buyPunk. Someone could theoretically deploy a custom contract to list a Punk for 1 wei, call buyPunk to claim the reward, then repurchase the Punk for 2 wei. This means the contract could effectively be drained of its ETH.
  • This was fixed by setting the reward to 0, making it unprofitable to perform the attack.
  • The second bug was more intricate. We forgot to withdraw the ETH from the CryptoPunks marketplace after a successful sale. This essentially would have locked the ETH in the Punks contract after it had sold, preventing the buy-and-burn of $PNKSTR.
  • This fix was much more complex. It consisted of deploying a wrapper contract which was set to the owner of the original PunkStrategy contract. We then set the reward on the original contract to 10000e, preventing the original buyPunk function from being called. On the new contract, the buyPunkAndRelist function will call the emergency transferEther function from the original contract, and use that ETH to buy the Punk and relist it. A function on the new contract, processPunkSale, is callable by anyone to withdraw the ETH and start the buy-and-burn of $PNKSTR in 1e increments, once per block. A reward is paid out to the caller, which incentivizes bots to push the mechanism along.
  • It’s quite difficult to enforce taxes on a token. It’s a trade-off that threatens the self-sovereignty of a user’s assets by restricting who they can transfer it to. The majority of fees still flow through the main hook (as that’s where the majority of the liquidity is), but future iterations of Strategy tokens use a system to ensure taxes are paid on each swap and routed through the hook.

Wrap-up

After a year of consistently shipping token concepts, PunkStrategy stood out as an unambiguous success. It was our most polished release to date, and this time, our most successful as well. We know this won’t always be the case (future duds are inevitable), but it was rewarding to see sustained effort finally pay off.

With the profit from the launch, we brought on another developer (@dievardump) to help us build out the same model for other projects. We felt as though people would fork the protocol anyway, so we released NFTStrategy in October 2025, as a way to let anyone launch a Strategy for their NFT collection. The platform became fully permissionless and allowed for public launches under the TokenStrategy branding in December. Some extremely successful Strategy tokens launched and bought hundreds of NFTs (Checks, Max Pain, Bored Apes, Cryptoadz, etc). Some tokens were adopted by their communities as their official token (Chimpers with ChimpStrategy, Good Vibes Club with VibeStrategy).

It’s been four months since we’ve launched PunkStrategy; it both feels like forever and just yesterday. The change from launching a project each month to tweaking one idea for an extended period was a welcome change, but we are itching to keep releasing new ideas.

PunkStrategy will be self-sustaining on its own, even if we keep pushing the envelope on what tokens can do. It will run forever, automated by bots, with or without the frontend. Everything is a balancing act, and we want to avoid cannibalizing our own golden goose while also retaining creative freedom. That being said, PunkStrategy is a self-marketing machine (we post each milestone as they are hit, with each new Punk purchase/sale). We don’t plan on doing anything to jeopardize the success of PunkStrategy, but believe it makes sense to continue iterating and creating in order to bring more people into the TokenWorks ecosystem.