Author | Huohuo
Produced by | Blocktalk
As Bitcoin broke the $100,000 mark, competing coins surged, and the NFT track also seemed to be starting to recover.
On December 6, the floor price of the NFT blue-chip project Pudgy Penguins rose over 20% within 24 hours, reaching a peak of 22.2 ETH (currently about 27 ETH), briefly surpassing BAYC (22.1 ETH). Moreover, Pudgy Penguins has mostly remained in the top three NFT market cap rankings since the beginning of this year.
From the 'team infighting' at the beginning of 2022 to the floor price dropping to 0.519 ETH, and now rising over 50 times, what has allowed 'Pudgy Penguins' to emerge from the low point and secure its place among NFT blue chips? What has the team behind it done?
01, Through the Bull and Bear Market.
In fact, before November of this year, the NFT market was in a very sluggish state. In the second quarter of 2024, the sales volume of NFTs dropped by 45% compared to over $4.1 billion in the first quarter, amounting to about $2.28 billion, while the NFT market transaction volume fell by another 50% to $1.1 billion in the third quarter. However, after the overall recovery of the cryptocurrency market in November, the NFT market also warmed up, but it pales in comparison to the increase caused by Pudgy Penguins' announcement of a token.
Furthermore, as early as February 17 of this year, according to Blur data, the floor price of Pudgy Penguins briefly surpassed that of BAYC (Bored Apes), marking the first time since 2021 that BAYC has been overtaken by another project. Additionally, Pudgy Penguins maintained a strong upward trend throughout the first quarter of this year, achieving several-fold increases.
On May 12, the Pudgy Toys series under Pudgy Penguins has now been launched in the collectibles section of Target, the second-largest retailer in the U.S., with the newly licensed Lil Pudgys. Pudgy Toys transforms digital collectible characters into popular physical product lines, seamlessly merging the physical and digital worlds for consumers.
On July 10, Pudgy Penguins collaborated with Web3 domain provider Unstoppable Domains, allowing users to access Pudgy World through their own '.pudgy' domains. With this new integration, users will no longer need to submit Web2-based credentials (such as Google or Apple accounts) to log into the virtual world. Additionally, this integration allows users to log into their accounts without traditional passwords.
Subsequently, on July 16, the mini-game Pixelverse announced that it would introduce the pudgy penguin character 'Pudgy' into the game, integrating with other cryptocurrencies like Dogecoin. This integration allows players to play as characters in the Pixelverse game, which will officially launch in 2025.
So how did Pudgy Penguins develop step by step to where it is now?
02, Unfavorable Start.
Pudgy Penguins is a series of colorful penguin avatars launched in July 2021, symbolizing "love, compassion, and empathy". The vision is for the image of the pudgy penguin to become a beacon of good mood and positivity for everyone. A total of 8,888 pieces were issued on Ethereum, with a minting price of 0.03 ETH. It sold out in less than 20 minutes after release. Although the price performance was mediocre in the days following the sellout, it quickly rose under the influence of the 'zoo' trend initiated by BAYC, with price increases reaching hundreds of times compared to the release price.
Subsequently, Pudgy Penguin holders referred to themselves as "The Huddle" (team) and "Pengus" (penguin friends). Early holders can enjoy exclusive experiences, related events, intellectual property (IP) licensing opportunities, and other benefits.
During the hot market at that time, Pudgy Penguins attracted celebrities such as NBA star Stephen Curry and Reddit co-founder Alexis Ohanian to purchase.
However, due to issues with the initial founding team, the project faced a rocky start. Former founder Cole Villemain was accused of operating scams, misusing funds, and conflicts between the team and major project holders, leading to a decline in interest in Pudgy Penguins.
In December 2021, the original operator of Pudgy Penguins and the team failed to reach an agreement on salary and responsibilities. Due to dissatisfaction with the boss, he had threatened to 'FUD Pudgy Penguins to zero.'
Then, in early January 2022, community members wrote lengthy posts accusing the Pudgy Penguins founding team of failing to deliver on promised game development and recruitment of developers, raising suspicions of 'running away with funds.'
This triggered extreme dissatisfaction within the community towards the Pudgy Penguins founding team, leading to a vote in early 2022 to remove the founders on Discord. At the same time, the floor price of Pudgy Penguins also dropped to an all-time low of 0.519 ETH.
The enraged community demands change, image source: x.com
In April 2022, a new team led by Los Angeles entrepreneur Luca Schnetzler acquired the project for $2.5 million.
Pudgy Penguins saw a turnaround after Luca Netz's acquisition.
After Luca took over the project, he quickly implemented new measures, including hiring a new COO, applying for blue checkmarks on X and OpenSea, and launching an official Instagram account among other Web2 and Web3 platforms. After opening the account, the Luca team maintained high activity on Twitter and Instagram, actively participated in various NFT events, including establishing a Pudgy Penguins yacht party in Miami, producing community-exclusive Pudgy Penguins toys, launching Soulbound Tokens, creating an exclusive secondary trading market for Pudgy Penguins, and selling Pudgy Penguins-themed merchandise to increase media exposure.
It can be seen that after the new team took over, Pudgy Penguins' price showed a spiraling upward trend in the following year. In May 2023, Pudgy Penguins completed a $9 million financing led by 1kx, followed by a sharp rise at the beginning of 2024.
So besides media promotion, what else has the Pudgy Penguins team done to make Pudgy Penguins a top NFT PFP after Crypto Punks and BAYC?
03, The Growth Journey.
Since taking over in April 2022 until early 2024, Pudgy Penguins has laid the foundation for its brilliant performance through brand building, IP development, and online and offline collaborative marketing, with mutual cooperation in various aspects.
1) Focus on IP marketing to enhance visibility.
In April 2021, Yuga Labs' BAYC attracted a large number of holders and enhanced community cohesion through the bull market and continuous airdrops. However, as development slowed in the later stages, Luca learned from this experience, realizing that relying solely on airdrops in a bear market is not sustainable for projects. For NFT projects to develop long-term, sustainable revenue sources must be established.
Referring to Web2 development experiences, Luca realized that intellectual property (IP) has enormous potential. For example, over 24 years since 1996, Pokémon's revenue has approached $100 billion. He then adjusted his goal to build Pudgy Penguins into a globally recognized Web3 brand.
Source: createandlearn.net
Before the acquisition, the initial team had already enriched the Pudgy Penguins NFT series. Therefore, the ecosystem was relatively complete. Luca believed that the key competitive advantage of Pudgy Penguins lay in effective IP marketing.
Pudgy Penguins has implemented a series of targeted strategies, using social media, offline physical product sales, and other channels to communicate the brand philosophy and product messages of Pudgy Penguins to the target audience.
First, using social media channels to gain exposure and increase awareness. Pudgy Penguins has over 17,300 related GIFs on dynamic GIF search engines, with a total view count reaching 24.3 billion.
Pudgy Penguins has 1.6 million followers on Instagram, with tens of thousands of likes on each post. Pudgy Penguins has nearly 520,000 followers on TikTok, with a total of 16.6 million likes, among which the top pinned video has nearly 17.7 million views.
Pudgy Penguins TikTok account
From May to July 2024, Pudgy Penguins also launched the '#SaveThePenguins Challenge' campaign, using TikTok and Instagram's augmented reality (AR) filters to raise awareness for penguin protection and fundraise for environmental protection organizations.
Pudgy Penguins also participated in a series of online marketing and offline activities, such as the Miami Basel Art Fair and collaborations with other industries.
In 2022, Pudgy Penguins collaborated with Green Kids Club to launch children's reading materials; in 2023, they partnered with Hologram Labs and Retail Monster to launch 3D models and penguin toys; in May of the same year, Luca released Pudgy Toys, a physical toy based on its intellectual property.
On December 11, 2023, Pudgy Penguins announced the gaming platform Pudgy World, which will launch brand-related hero characters like Pudgy and Peaches to enhance player experience.
2) IP licensing enhances community cohesion.
To convey value to the community, Luca established closer connections and a shared win-win value concept with Pudgy Penguins NFT holders by sharing its success and business value. He stated that Pudgy Penguins became the first franchised IP in the Web3 domain, and the company also launched the IP licensing platform OverpassIP to promote NFT licensing and physicalization.
Pudgy Penguins' licensing model has two types: producing physical items through holders' image rights and sharing profits, or enhancing brand awareness and monetization through social media exposure.
3) Produce physical derivative products for revenue generation.
The main sources of income for IP include sales of derivative products, games, and film and television box office revenue, with derivative products and games being the key monetization avenues.
In this regard, Yuga Labs' IP development focuses on gaming direction and collaborates with physical brands for product monetization. In 2023, Azuki launched the PBT protocol and collaborated with Ambush, exploring paths to monetize by combining physical products with digital experiences.
Luca chose IP derivatives, and since taking over Pudgy Penguins, he has focused on IP licensing and product planning, such as the launch of physical dolls, plush toys, decorative pins, and more. According to reports, Pudgy Penguins' physical toys sold over 750,000 units within seven months and have entered 3,100 Walmart stores in the United States.
On May 13, Luca stated that in the past 12 months, sales of Pudgy Penguin plush toys had exceeded one million units.
In addition, the Pudgy Penguins brand has also expanded beyond the NFT realm, applying for trademarks in fields such as printed comic books, collectible trading cards, premium fruits, seasonal foods, board games, T-shirts, hats, virtual goods, and multimedia.
Reports indicate that the Pudgy Penguins team also plans to launch two arcade games and the Pudgie World game, with support from zkSync for Pudgie World.
04, Controversies and Risks.
The Pudgy Penguins project has also sparked some controversies during its development process. Apart from the early founders and team's unfulfilled promises mentioned above, leading to a decline in community trust, there are also two other noteworthy points:
1) Centralization Controversy
Although NFT projects typically promote decentralized governance, the process of changing management in Pudgy Penguins was seen as driven by a few individuals, which somewhat contradicts the original intention of decentralization. Additionally, some community members have questioned the management style of the new leadership team and expressed concerns about the future development potential of the project.
2) Speculative nature of NFTs.
Like other NFTs, Pudgy Penguins' prices fluctuate greatly. Some believe the project relies more on market speculation rather than true value creation. The audience for physical dolls and Web3 IP lacks compatibility, which is insufficient to drive Pudgy Penguins' further development in Web3. Additionally, some users have reported difficulties in profiting in the secondary market after purchasing NFTs.
05, Summary
Pudgy Penguins aims to create the world's first great web3 IP company and become one of the first globally recognized brands and IPs in the NFT field. Currently, there is still some distance to go to achieve Pudgy Penguins' ambitious ideals.
Due to various opportunities, Luca enabled Pudgy Penguins to achieve relative success during this cryptocurrency winter through similar dual-layer games and an IP-centered model. However, in the context of a somewhat 'outdated' NFT narrative, whether Pudgy Penguins can revitalize the industry tone and continue to develop remains to be seen.
(The above content is excerpted and reprinted with permission from partner PANews, original link | Source: Blocktalk)
Statement: The article only represents the author's personal views and opinions, not the views and positions of Blockcast. All content and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and trades, and the author and Blockcast will not bear any responsibility for the direct or indirect losses caused by investors' trading.
"After the bull and bear market, the floor price of 'Pudgy Penguins' has reached a new high. Is the NFT market about to revive?" This article was first published on (Blockcast).
