Written by: Luke, Mars Finance.

At 9 PM tonight, Pudgy Penguins finally made their move. Holders of Pudgy Penguins, Lil Pudgys, Rogs, and SBTs can claim the airdrop token PENGU, with a claim period set for 88 days. Users who purchased Pudgy Toys are also included in this airdrop, but they will have to wait until the Abstract mainnet launches next year to claim PENGU through LayerZero's bridging function. Specific details will be revealed with the launch of the Abstract mainnet in January next year.

The total supply and maximum supply of PENGU are both 88,888,888,888. Behind this seemingly pleasing 'eight' configuration, the distribution is also quite clever:

  • 25.9% is allocated to the Pudgy Penguins community, including diverse ecological members such as Lil Pudgys, PenguPins, and Pudgy Rods.

  • 24.12% is planned to expand to other communities, expecting to bring in 5 million new users to recruit for Pudgy Penguins.

  • 12.35% is used to create liquidity pairs for decentralized exchanges, ensuring that PENGU can 'dance lively' in the market.

  • 17.8% is allocated to the project team, with a 1-year cliff and a 3-year vesting period, while the lock-up mechanism enhances the team's willingness for 'long-term companionship'.

  • 11.48% is allocated for business development and marketing, shouldering the heavy responsibility of ecological development.

  • 0.35% was distributed to FTT holders, of which 4% is designated for public interest, continuing the Pudgy Penguins motto of 'spreading a good atmosphere'.

Currently, according to pre-market information from Whale Market over-the-counter trading, the floor price of PENGU is 0.044 USDT, combined with a total token supply of 88.88 billion, corresponding to a total market cap of $3.91 billion. Meanwhile, the floor prices of Pudgy Penguins and Lil Pudgys have surged to 32ETH ($128,796) and 3.78 ETH ($15,175) respectively, with market caps of $1.14 billion and $320 million, totaling $1.46 billion.

The question arises: After PENGU goes live, can this market cap hold steady? How will the value balance between NFTs and tokens tilt?

Value transmission - lessons from predecessors.

It's not new for NFT projects to issue tokens; the market has long witnessed the scripts of 'old players': during the last bull market, BAYC's ApeCoin shone brightly; earlier this year, the Runestone airdrop of DOG also made a spectacular debut. However, while history does not simply repeat itself, similar logic often unfolds again.

BAYC - Apecoin.

BAYC was absolutely in the limelight during the last bull market, with the parent company Yuga Labs acquiring CryptoPunks, becoming a giant in the PEP NFT space. At the same time, Yuga Labs auctioned 101 bored apes and 101 BAKC dogs at Sotheby's for $21 million. Celebrities including NBA player LaMelo Ball, NBA president Daryl Morey, DJ duo Bassjackers, DJ 3lau, as well as Chinese stars Chen Bolin, Wu Jianhao, and Yu Wenle, all used BAYC's works as their social media avatars. The celebrity effect ignited public interest in NFTs and BAYC; regardless of NFT ownership, everyone was willing to change their avatar to a monkey.

In March, Yuga Labs completed a $450 million seed round financing with a valuation of $4 billion, led by a16z and Animoca Brands. Game publisher Animoca Brands and Sound Ventures, both investors, announced their support for ApeCoin’s funding, and even Time magazine announced it would accept Apecoin for subscription fees.

Against this backdrop, Apecoin debuted with a market cap of $900 million, skyrocketing to a peak of $6.8 billion. BAYC experienced a brief halving drop after the snapshot, then quickly regrouped to achieve new highs. At its peak, the total market cap of BAYC + MAYC + Apecoin exceeded $10 billion.

However, after reaching the top, BAYC and Apecoin seem to have exhausted all their energy, following BTC into a slow bear market, where their value has only declined. The floor price of BAYC has dropped from $360,000 to a low of $20,000, while Apecoin's market cap once plummeted from $6.8 billion to $300 million, with a maximum drop of around 95%.

Currently, Apecoin has a market cap of $1.18 billion, BAYC has a market cap of $750 million, and MAYC has a market cap of $250 million.

Runestone - DOG.

Runestone was the most dazzling star project during the Bitcoin ecosystem boom earlier this year, with unique mechanisms and interactions with many projects, frequently creating wealth effects, and holding Runestone provided opportunities to receive airdrops from other Bitcoin ecosystem projects. Additionally, Runestone's founder Leonidas announced three rounds of token airdrops for Runestone. The floor price of Runestone reached a peak of $5,000 in April, corresponding to a market cap of $560 million. However, after the DOG rune airdrop ended, Runestone's market cap plummeted by 85%, maintaining at $8 million for a long time. The newly formed DOG had an initial market cap of $400 million, and after a brief correction, it soared to $1.1 billion.

With the decline in Bitcoin ecosystem enthusiasm, DOG also once fell back to a market cap of $180 million, which has now risen to $930 million.

It is not difficult to see that after NFT projects issue tokens, at least more than half of the value will be directly transferred to the token. The conversion ratio depends on two factors:

1. The social attributes of NFT itself.

2. The potential airdrop expectations for NFTs in the future.

BAYC itself possesses T0 level social attributes in the crypto space. Although its prominence is no longer as it once was, it remains an eternal classic. Therefore, the APE token will not steal BAYC's core value. In contrast, Runestone lacks social attributes, and the quiet state of the Bitcoin ecosystem also limits the actual value expectations of the airdrop. For this reason, the DOG token appears more valuable, while Runestone has almost become a discarded piece.

However, a similar plot has played out recently. Just last month, Animoca Brands strategically invested in the parent company of Pudgy Penguins, seemingly to replicate BAYC's successful model.

In fact, the valuation support for Igloo comes from the overall market cap of Pudgy Penguins. When Igloo first issued Pudgy Penguins, its initial price was only 0.03ETH, and even as the price of Pudgy Penguins soared, the founding team could not benefit significantly; their only income was the transaction fees during the process. In this case, how to provide an exit channel for Igloo's financing capital? The answer is clear: issuing tokens became the most direct way, and thus the launch of the PENGU token came into being. For the market, large holders can adjust the token value at any time; for the PENGU token itself, the founding team and investment institutions need to cash out, and NFT holders are also eager to realize their profits.

Having said all that, what should we do after Pudgy Penguins goes live?

1. Sell NFTs: The earlier you sell, the better the opportunity.

The NFT sell-off wave is almost a certainty. Once the airdrop is completed, the value of Pudgy Penguins' NFTs is expected to at least be halved, so the earlier you act, the higher the price. An anonymous analyst from the Azuki NFT series, Waleswoosh, pointed out on platform X: 'I believe the floor price of Pudgy Penguins post-airdrop will stabilize around 20 ETH. Those expecting it to drop to 10-15 ETH overlook the further support brought by the launch of the Abstract mainnet in January 2025.'

2. Potential swing opportunities for PENGU.

If PENGU repeats the historical scripts of APE and DOG, the best strategy is undoubtedly to sell when the FOMO sentiment is strongest on the day of launch, then wait for the first wave of natural correction after 2-5 days before picking up bargains.

It is worth noting that, given Yuga Labs' 'disappointing performance', the market's expectations for this round of PENGU are even higher. The combined market cap of PENGU, Pudgy Penguins, and Lil Pudgys is aiming for $10 billion, which is both a reasonable expectation and a noteworthy sell point.

If you missed the PENGU airdrop, what should you do?

1. Bottom-fishing other NFTs: Look for the next 'undervalued' potential stock.

If the PENGU airdrop goes smoothly, market sentiment will be further stimulated, which will have a positive ripple effect on other NFT projects with token issuance plans. Currently, Azuki and Doodles have market caps of less than $500 million, which clearly places them in an undervalued state compared to Pudgy Penguins which is in the token issuance phase. At this point, strategically positioning in NFTs with the highest expectations for token issuance may capture the next round of value explosion.

2. Continue to position in Pudgy Penguins: Prepare for the next big move.

In June this year, the parent company of Pudgy Penguins, Igloo, successfully acquired the on-chain creator economy platform Frame, planning to jointly create an L2 network called Abstract Chain designed for on-chain culture and community. Shortly after, Igloo completed $11 million in financing a month later, with investors including Founders Fund, Distributed Capital, 1kx, EVG, and Selini Capital.

Igloo plans to invest this funding into a new business, Cube Labs, which will be deeply involved in the development of the Abstract network. This blockchain, built on ZK technology, targets the largest on-chain cultural community in the world, aiming to provide a low-cost, fast, and secure trading experience through the ZK technology stack and EigenDA services.

Therefore, Pudgy Penguins still has a strong expectation for public chain airdrops. Once the post-airdrop NFT sell-off tide subsides, bottom-fishing Pudgy Penguins is not only a solid choice, but may also welcome a new explosive point in the future.

In conclusion.

At 9 PM tonight, PENGU will officially launch. In this airdrop storm, the market will always find its balance point. Whether choosing short-term arbitrage or long-term positioning, the one constant is: when the chess game of capital is rearranged, the next opportunity often hides in 'overlooked corners'. Wishing everyone a great time.