The revival of meme coins on the ETH mainnet has brought excitement back to the Ethereum network. While everyone was caught up in the meme hype, it might have been easy to overlook the fact that over the past week, the ETH mainnet's NFTs have also experienced a significant rebound with almost no dip.

Compared to these quietly rebounding old blue-chip NFT series, there is a new project that has achieved a synergy between NFT players and meme players. Yesterday, this project briefly surpassed a $12 million market cap, making it one of the most-watched new projects on the ETH mainnet.

It is none other than Unipeg ($uPEG).

Will the "Coin and Image Integrated" Concept Rise Again?

uPEG easily evokes memories of the ERC-404 "Pandora's Box" that was once all the rage two years ago. Indeed, both of their total supplies consist of only 10,000 tokens, with each token corresponding to an image. The image and the coin are symbiotic; selling one token results in the destruction of the corresponding image.

However, uPEG is by no means a mere rehash of old ideas. In contrast to ERC-404, which leaned more towards an NFTfi/ERC standard-level experiment and innovation, the overall narrative logic of the uPEG project is very coherent.

Firstly, in terms of naming, Unipeg was the original name of Uniswap.

In July 2017, Hayden Adams found himself unemployed. At that time, he had little planned for the future until his friend Karl Floersch introduced him to smart contracts. Meanwhile, Ethereum founder Vitalik Buterin published an article on the possibility of creating AMMs on Ethereum.

Subsequently, Hayden Adams began developing Unipeg. Later, he formally met Vitalik. Vitalik read Unipeg's smart contract on his phone and advised Hayden to apply for a grant from the Ethereum Foundation, suggesting a rebrand to Uniswap.

Even in just the naming aspect, the author of uPEG, 0xhadrian.eth, has provided plenty of meme angles. Naming this new project Unipeg carries 3 main meanings:

- The content of the images is solely unicorns, Unipeg = Uni (unicorn) + JPEG (image)

- Paying Tribute to the Origin History of Uniswap

- The term "peg" itself also means "to hook," corresponding to the project directly generating images through custom logic implemented via Uniswap v4 hooks

Compared to ERC-404, Unipeg actually has substance. Although just looking at the image might leave everyone scratching their heads - why should this thing be worth over $600 based on just a picture?

Eternal On-Chain Artwork

Firstly, the image basis of uPEG is the same as CryptoPunks, both being 24x24 pixels. Adding the "unicorn" element to pay homage to Uniswap, it may initially come across as crude.

However, paying homage to CryptoPunks does not mean that 24x24 pixels suffice. The core historical value of CryptoPunks lies in digital objects, or rather cryptocurrency, which can serve as meaningful information carriers on-chain. It encompasses not just visual images but ownership, historical records, holders, and more. This information not only permanently exists on-chain but is also entirely verifiable, without any intermediaries.

uPEG is also a fully on-chain project. By using a custom Uniswap v4 hook, a unique 24x24-pixel collectible image is entirely rendered on-chain, without external storage or IPFS.

When a $uPEG transaction occurs, this custom Uniswap v4 hook generates a hash value. This hash value serves as input to the SVG renderer, which, based on this hash value, generates each feature of the unicorn - body, eyes, horn, hair, wings, tail, color, background.

This is the biggest difference from ERC-404. ERC-404 simply proves that image and coin can coexist, while uPEG signifies that every token transaction implies new minting and burning. Theoretically, the image cap of uPEG is 10,000, but it's highly unlikely for 10,000 holders to evenly hold 1 $uPEG each, so the actual number of images in existence is typically less than 10,000.

Furthermore, when a token is sold, the corresponding image of the original token ceases to exist, signifying its "death." However, if a new $uPEG is bought, a new image is minted, meaning its "birth." No one can retrieve the "dead" image because the time of each on-chain transaction, corresponding blocks, actors involved, and other related on-chain data are never consistent, and each new hash value used to generate a new image cannot be the same.

While the uPEG's supply will essentially always be less than 10,000, the total number of uPEGs that have ever existed can be infinite, as long as transactions of $uPEG are still ongoing. This is an endless creation where the creator is the smart contract code and every participant in the transactions.

This is the real reason why NFT enthusiasts are interested in this—uPEG is neither an NFT nor a meme coin to them; it is a theoretically eternal on-chain generative art creation. The beauty of generative art lies in the "sense of uniqueness created at a random moment" that can never be replicated. For example, the famous generative art NFT project Ringers by Dmitri Cherniak, with ID #879, is considered a holy grail by collectors because the generated appearance closely resembles a goose and is irreplicable.

Ringers #879 once sold for 1800 ETH (approximately $5.6 million) to the crypto hedge fund Three Arrows Capital, becoming one of the most expensive Art Blocks works on the market at the time

Conclusion

This project is the most old-school Ethereum-flavored independent project since the Space Dogs exploded the ETH mainnet scene, reminding us of the good old times when fresh gameplay, faith, and fun as transaction logic led to victory.

Of course, the rapid rise of uPEG in the past few days was not without the buying support from OpenSea CMO Adam Hollander and direct engagement from Uniswap team member @saintniko.

Furthermore, while the developer behind it remains relatively mysterious, the project is not over. Currently, the corresponding secondary market Peg2Peg is under development. As uPEG is not an image under the ERC-721 protocol, it cannot be traded on OpenSea and other NFT marketplaces at the moment.

Peg2Peg in development

Additionally, according to the author's vision:

“Over time, the distribution of holders will become more fragmented, and fewer people will hold a full $uPEG (owning a unicorn picture). The number of unicorns that can exist will also decrease.”

If the market introduces a rarity mechanism for the pictures, then some of the pictures selected by the market to be collected will circulate through Peg2Peg instead of being returned to the liquidity pool as tokens. This is a form of token burn and value appreciation achieved through the formation of culture and a collecting trend.

This may be one of the most interesting ways we have seen to address liquidity issues in the years following NFT development.

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