Launched in June 2017 by Larva Labs, Cryptopunks were originally free for anyone with an Ethereum wallet to claim (+ gas). The Punks were a huge hit at launch and all of them were claimed incredibly fast. In the original Cryptopunks smart contract, there was a code error that caused Ethereum to be allocated to the buyer instead of the seller when a purchase was made. In other words, a buyer was immediately refunded for their purchase and was able to keep the Punk.
Not long after the bug was found a newer version of the Punks contract (Version 2, V2) was released and Punks were airdropped to this new contract. V1 Punk owners are now able to wrap their Punks into an ERC-721 contract (another kind of standardized smart contract) and patch over the bug. This recovery of the original Punks smart contract is a community led and rapidly growing phenomenon consisting of original Punk claimant's, NFT historians, digital archeologists and extremely talented developers. There is no clear leader and all important decisions are voted on by community members.
V1 Punks exist just as V2s do. This cannot be changed or undone since the V1 Punks are a permanent part of the blockchain. The new wrappers impart a slight change to the image in the form of a new background While this is a very modest change in the image, the core Punk remains the same.
While the V1 Punks still exist in their original form, so does the existing bug in the V1 contract so NEVER put an unwrapped V1 on sale as you will most likely lose it. V1 Punks are not a derivative but are in fact the “original/classic” Cryptopunks. This is verified on the Ethereum blockchain and is immutable.