Author: Huo Huo, Plain Language Blockchain
With Bitcoin breaking the $100,000 mark, altcoins led by Ethereum have begun to surge, and the NFT sector also seems to be experiencing a revival.
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 maintained a position in the top three of NFT market capitalization since the beginning of this year.
From the "internal strife" of early 2022 that caused the floor price to drop to 0.519 ETH, to now having increased by over 50 times, what has allowed Pudgy Penguins to emerge from its low point and stabilize as a blue-chip NFT? What has the team behind it done?
Navigating Bull and Bear Markets
In fact, before November, the NFT market was in a very sluggish state. The sales of NFTs in the second quarter of 2024 dropped by 45% compared to over $4.1 billion in the first quarter, amounting to about $2.28 billion, while the trading volume in the third quarter of 2024 fell by another 50% to $1.1 billion. However, after the overall recovery of the cryptocurrency market in November, the NFT market also saw some warming, but this was negligible compared to the surge caused by Pudgy Penguins announcing its Token.
As early as February 17 of this year, according to Blur data, the floor price of Pudgy Penguins briefly surpassed that of BAYC, marking the first time since 2021 that BAYC was overtaken by another project. Additionally, Pudgy Penguins maintained a strong upward trend throughout the first quarter of this year, achieving several times in growth.
On May 12, the Pudgy Toys series under Pudgy Penguins was launched in the collectibles section of Target, the second-largest retail store in the U.S. Pudgy Toys transformed digital collectible characters into a popular line of physical products, seamlessly merging the physical and digital worlds for consumers.
On July 10, Pudgy Penguins partnered with Web3 domain provider Unstoppable Domains, allowing users to access Pudgy World through their own .pudgy domain names. With this new integration, users no longer need to submit Web2-based credentials (such as Google or Apple accounts) to log into the virtual world. Furthermore, this integration allows users to log into their accounts without traditional passwords.
Then, on July 16, the mini-game Pixelverse announced it would introduce the Pudgy character "Pudgy" into the game, incorporating popular elements from other cryptocurrencies like Dogecoin. This integration allows players to take on roles in the Pixelverse game, with the Pudgy Penguins game set to officially launch in 2025.
So how did Pudgy Penguins develop step by step to where it is now?
A Rocky Start
Pudgy Penguins was launched in July 2021 as a series of colorful penguin avatars, symbolizing "love, compassion, and empathy," with the vision of the Pudgy Penguin image becoming a beacon of good mood and positivity for everyone. A total of 8,888 were issued on Ethereum, with a mint price of 0.03 ETH, selling out in less than 20 minutes after launch. Although the price performance was mediocre in the days following the sell-out, it quickly surged under the influence of the "zoo" market led by BAYC, with an increase of up to a hundred times compared to the launch price.
Subsequently, holders of Pudgy Penguins referred to themselves as "The Huddle" (team) and "Pengus" (penguin friends), with early holders gaining exclusive experiences, related events, intellectual property (IP) licensing opportunities, and other benefits.
In 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. The former founder, Cole Villemain, was accused of operating a scam, misusing funds, and conflicts between the team and major project holders, leading to a decline in Pudgy Penguins' market heat.
In December 2021, the original operator of Pudgy Penguins and the team failed to reach an agreement on salary and responsibilities, and due to dissatisfaction with the boss, he threatened to "Fud Pudgy Penguins to zero."
Then, in early January 2022, community members wrote long articles accusing the Pudgy Penguins founding team of failing to deliver on promises regarding game development, recruiting developers, and other matters, raising suspicions of wanting to "run away with the funds."
This led to extreme dissatisfaction within the community towards the Pudgy Penguins founding team, resulting in a vote on Discord to remove the founder in early 2022. Meanwhile, the floor price of Pudgy Penguins dropped to a historic low of 0.519 ETH.
Angry community demands change, image source: x.com
Subsequently, in April 2022, a new team led by Los Angeles entrepreneur Luca Schnetzler acquired the project for $2.5 million.
Pudgy Penguins experienced a turning point after Luca Netz's acquisition.
After taking over the project, Luca quickly implemented new measures, including hiring a new COO, applying for blue checks on X and OpenSea, and launching official accounts on Instagram and other Web2 and Web3 platforms. After the accounts were opened, Luca's team maintained a high level of activity on Twitter and Instagram, actively participating in various NFT events, including establishing a Pudgy Penguins yacht party in Miami, producing community-exclusive Pudgy Penguins toys, releasing soulbound tokens, creating a dedicated secondary trading market for Pudgy Penguins, and selling Pudgy Penguins-themed clothing, among other initiatives to enhance social media exposure.
It is evident that after the new team took over, Pudgy Penguins experienced a spiral increase in price over the following year. In May 2023, Pudgy Penguins completed a $9 million financing round led by 1kx, and then skyrocketed in early 2024.
So besides media promotion, what actions did the Pudgy Penguins team take to make Pudgy Penguins a leading NFT PFP after Crypto Punks and BAYC?
The Path to Growth
From the takeover in April 2022 to early 2024, Pudgy Penguins built a foundation for its outstanding performance through brand establishment, IP development, and online and offline collaborative marketing, with the interconnection of various elements.
1) Focusing on IP marketing to enhance visibility
In April 2021, Yuga Labs launched BAYC, which attracted a large number of holders through the bull market and continuous airdrops, enhancing community cohesion. However, as development slowed in the later stages, Luca learned from this experience and realized that relying solely on airdrops in a bear market is unsustainable for projects. For long-term development, NFT projects must establish sustainable revenue sources.
Drawing from Web2 development experiences, Luca recognized the immense potential of intellectual property (IP). For example, over a 24-year period starting in 1996, Pokémon generated nearly $100 billion in revenue, prompting him to adjust his goal to make Pudgy Penguins 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, and Luca believed that effective IP marketing would be one of Pudgy Penguins' most important core competitive advantages moving forward.
Pudgy Penguins implemented a series of targeted strategies to convey the brand concept and product information to the target audience through social media and sales of physical products.
First, leveraging social media channels to gain exposure and increase visibility. Pudgy Penguins has over 17,300 related GIFs on dynamic GIF image search engines, with a total view count of 24.3 billion.
Pudgy Penguins has 1.6 million followers on Instagram, with each post receiving tens of thousands of likes. On the overseas version of Douyin, TikTok, Pudgy Penguins has nearly 520,000 followers and a total of 16.6 million likes, with the pinned first video reaching nearly 17.7 million views.
Pudgy Penguins TikTok account
From May to July 2024, Pudgy Penguins also launched the "#SaveThePenguins Challenge" to raise awareness for penguin conservation through augmented reality (AR) filters on TikTok and Instagram, while also fundraising for environmental organizations.
Pudgy Penguins participated in a series of online marketing and offline events, such as the Miami Basel Art Fair and collaborations with other industries.
In 2022, Pudgy Penguins partnered with Green Kids Club to launch children's reading materials; in 2023, they collaborated with Hologram Labs and Retail Monster to release 3D models and penguin toys; in May of the same year, Luca launched physical toys called Pudgy Toys based on their intellectual property.
On December 11, 2023, Pudgy Penguins announced the gaming platform Pudgy World, which will introduce brand-related hero characters like Pudgy and Peaches to enhance player experience.
2) IP Licensing Enhances Community Cohesion
To deliver value to the community, Luca established a closer connection with Pudgy Penguins NFT holders by sharing his success and business value, promoting a shared win-win value concept. He stated that Pudgy Penguins aims to become the first franchised IP in the Web3 space, and the company has launched the IP licensing platform OverpassIP to promote NFT licensing and physicalization.
Pudgy Penguins has two licensing models: producing physical goods through holder image licensing and revenue sharing, or monetizing through social media exposure to enhance brand awareness.
3) Producing Physical Derivatives for Revenue Generation
The main revenue sources for IP include derivative sales, gaming, and film box office, with derivatives and gaming being key to monetization.
In this regard, Yuga Labs focuses its IP development on gaming and collaborates with physical brands to achieve product monetization. In 2023, Azuki launched the PBT protocol and collaborated with Ambush, also exploring monetization paths that combine physical products with digital experiences.
Luca, on the other hand, chose IP derivatives. Since taking over Pudgy Penguins, he has been dedicated to IP licensing and product planning, such as launching physical dolls, plush toys, and decorative pins. According to reports, Pudgy Penguins' physical toys sold over 750,000 units within seven months and are now available in 3,100 Walmart stores across the U.S.
On May 13, Luca stated that in the past 12 months, sales of Pudgy Penguin plush toys have exceeded one million units.
Additionally, the Pudgy Penguins brand has expanded beyond the NFT space, applying for trademarks in areas such as printed comic books, collectible trading cards, snacks, seasonal foods, board games, hoodies, 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 Pudgie World supported by zkSync.
Controversies and Risks
The Pudgy Penguins project has also sparked some controversies during its development. In addition to the unfulfilled promises of the early founders and team, which led to a decline in community trust, there are two other noteworthy points:
1) Centralization Controversy
Although NFT projects typically promote decentralized governance, the process of changing management rights in Pudgy Penguins is seen as driven by a few individuals, which somewhat contradicts the original intention of decentralization. Additionally, some community members have raised concerns about the management style of the new leadership team and worry about the project's future development potential.
2) Speculative Nature of NFTs
Like other NFTs, Pudgy Penguins experiences significant price volatility, with some believing the project relies more on market speculation rather than genuine value creation. The audience for physical dolls and Web3 IP lacks alignment, which is insufficient to drive Pudgy Penguins' further development in Web3. Some users have also reported difficulty in profiting from the secondary market after purchasing NFTs.
Conclusion
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 space. Currently, it seems there is still a long way to go before Pudgy Penguins achieves its lofty ideals.
Due to various opportunities, Luca has allowed Pudgy Penguins to achieve relative success during this cryptocurrency winter through a similar dual-layer gaming and IP-centric model. However, in the context of the NFT narrative appearing somewhat "outdated," whether Pudgy Penguins can revitalize the industry tone and continue to develop remains to be seen.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
