How did Pudgy Penguins become a blue-chip NFT project?

Author: Arjun Chand, Bankless; Translator: Deng Tong, Golden Finance

Penguins are quintessential terrestrial creatures. However, the Pudgy Penguin NFT series is not so restricted.

Pudgy holders have received thousands of dollars worth of airdrops from other projects. A strategic partnership with Walmart continues to pay dividends. With the launch of Abstract Chain (their own L2 roadmap), the atmosphere is perfect. Although things are not always like this.

Pudgy Penguins went through some tough times in early 2022. The reserve price fell sharply. The same NFT that demands a premium today sold for less than 1ETH in a little over a month.

Rumors of mismanagement of the founders' funds, rumors of quarrels between team members, and broken promises caused trouble. The situation looked grim, and the community called for a change in leadership.

Enter Luca Netz. On January 6, 2022, he took to Twitter (now X) to offer 750 ETH, or about $2.5 million, for Pudgy Penguins. By April 2022, it was official: Netz and his team took over Pudgy Penguins, acquiring the intellectual property and the right to royalties from secondary sales.

With a background in digital marketing and e-commerce, Luca excels at building consumer brands, which is exactly what Pudgy Penguins needed.

Today’s story is about how Pudgy Penguins turned things around and became a brand on Walmart shelves. It was a masterclass in brand building, unfolding right before our eyes.

How Pudgy Penguins Took Over the World

In a recent Bankless podcast, Luca shared that after he took over the project, he spent time chatting with members on the Pudgy Discord. He tried to understand what the community expected from the project’s roadmap, and what kind of brand they envisioned Pudgy Penguins to become.

These members are more than just people who have invested in the project; they are ambassadors of the brand. Luca has the support of the community around him, rallying them to achieve a great mission and build a foundation for the future, which is key.

There are many lessons learned about how Luca, the team, and the community approached various aspects of brand building.

Clear messaging and positioning

Once aligned with the community, the vision for Pudgy Penguins was set: Make Pudgy Penguins a globally known and loved brand - not just a cryptocurrency.

Luca’s vision was to break down barriers and create it, rather than waiting for mass adoption. He wanted to build an inclusive brand that would resonate with people in the cryptocurrency industry, but also be loved by children and all demographics. He saw this as a way to bring cryptocurrency to families - fostering a positive, passionate community with a cute penguin character at the center.

We’ve had plenty of mainstream adoption stories like NBA Top Shot, which brought NFTs to the masses by giving fans a new way to connect with their favorite players. We also had the spotlight a few years ago when celebrities went crazy for Bored Apes. But Pudgy Penguins is breaking new ground and taking it a step further, with Web3’s first real attempt to take crypto and NFTs global by building a brand with universal appeal.

Product Expansion

In May 2023, Pudgy Penguins expanded its brand into the physical world with the launch of Pudgy Toys. This new line includes plush toys, figurines, and other collectibles inspired by the digital series, available through its official website and major e-commerce platforms like Amazon.

In September 2023, Pudgy Penguins made a groundbreaking move. They were the first to announce a partnership with Walmart, and Pudgy Toys were available in 2,000 Walmart stores across the United States. 5 months later in April 2024, this number expanded to 3,1000 stores.

The importance of this moment in establishing Pudgy Penguins as a global brand cannot be underestimated. Pudgy Penguins creating physical toys will change the world's mindset about NFTs.

Until now, we have only seen NFTs as digital collectibles, which they are, but they can be so much more than that, and Pudgys proves that. Not only do Pudgy Penguins have the adorable pieces of art that everyone cherishes, they now have added value and real-world utility.

Pudgy Penguins as a brand isn’t just for the typical crypto bros. There are cute penguin toys for kids, adorable plush toys to give to your girlfriend on Valentine’s Day (this is obviously a joke, we know the crypto bros are all single), and figurines that your work buddy or your dad will love to have on their desk. This is a brand for everyone, with the cool benefits of web3 and blockchain at its core.

Pudgy Toys has created a new channel for people to be introduced to cryptocurrency. People can now walk into a Walmart store and pick up a Pudgy Toy off the shelf or add it to their cart on Amazon simply because it caught their eye.

This strategic move has proven to be extremely effective, with over a million plush toys sold within the first year of the retail launch. Demonstrating the appeal of Pudgy Penguins, the brand recently entered into a partnership with Lotte Group to expand its presence in South Korea and solidify its status as a global phenomenon.

But there’s more — these aren’t just toys. They’re the inspiration for NFT collectibles that come with a fun pass into the world of blockchain, where the new toys can come to life in a digital playground called Pudgy World.

Pudgy World is an engaging on-chain experience hosted on zkSync. It’s available to anyone who buys a Pudgy Toy from Walmart. By scanning a QR code, customers can enter Pudgy World, where they can collect digital traits and personalize their Pudgy character.

To further build the best on-chain experience, Igloo Inc., the parent company of Pudgy Penguins, has acquired Frame to develop Abstract Chain, a consumer-focused layer 2 blockchain built on Matter Labs’ ZK Stack.

This strategic move aims to leverage the Pudgy Penguins community, culture, and distribution to drive a consumer cryptocurrency revolution. To fuel this ambitious project, Igloo recently secured an $11 million investment led by Peter Thiel’s Founders Fund.

Just like that, through the simple act of buying a physical toy, Pudgy Penguins has cleverly introduced the general public to cryptocurrency. A small step for Pudgy Penguins, a giant leap for Web3.

Marketing and Content Distribution

Pudgy Penguin’s marketing and content are as inclusive as their products. From GIFs that even your grandma loves to share on WhatsApp, to Instagram clips that your friends will want to repost, there’s something for everyone. Pudgy Penguins is slowly but surely conquering the hearts of people around the world with their charm. Here’s a detailed explanation of how they’re doing it.

1) GIFs

The Pudgy team’s concerted effort to create and share GIFs and memes has paid off, with Pudgy Penguin GIFs now a common sight on the social media platform.

These GIFs cater to a wide audience, ranging from crypto-specific terms like “wen” to universally relatable scenes like penguins dancing, demonstrating the team’s understanding of crypto culture and broader public interests.

This strategy has been widely successful, with Pudgy Penguins GIFs and stickers on GIPHY having been viewed 15 billion times.

2) Instagram Marketing

Pudgy Penguins kicked off the first year of Instagram marketing in the crypto space. They rose to popularity organically on Instagram thanks to their fun and relatable posts featuring the adorable Pudgy Penguins. Today, they have over 1.3 million followers on Instagram.

Their content is relatable to everyone, and you’ll often find your friends engaging with their posts and videos without even realizing they’re interacting with the NFT brand. This approach has proven to be very effective.

3) Open Communication and Transparency

Luca has a YouTube channel where he posts regularly to keep subscribers updated on the team’s behind-the-scenes efforts to grow Pudgy Penguins.

In addition, Discord hosts bi-weekly “Inner Igloo” community calls. It provides a platform for the community to interact with Luca and the team (and vice versa).

All of these initiatives highlight the team’s commitment to transparency and community building. This goes a long way to maintaining a positive vibe in the community.

4) Industry Leaders as Organic Brand Ambassadors

Many great crypto teams often have someone on the leadership team use a Pudgy Penguin as a profile picture on social media. Not only do they own the NFT, they actually carry it around with them, anchoring their identity around it. It’s not for nothing that a Pudgy owner says “I am my penguin and my penguin is me.”

These people are in fact ambassadors for Pudgy Penguins. Their adoption of the brand not only validates the project, but it also elevates Pudgy Penguins to a status symbol in crypto.

The beauty of it is its authenticity; it’s not something you can recreate with clever marketing. It either happens organically or it doesn’t. It’s a testament to Pudgy Penguins’ ability to unite people and make them feel like they’re part of something big, embodying the true spirit of web3 as a collective.

It has become an aspirational symbol; owning a Pudgy Penguin means you’ve joined a club that houses the best in the industry. This sense of belonging strengthens the brand’s cultural impact and storytelling.

The above initiatives are just a few examples of the Pudgy Penguins team’s marketing prowess. They are well-versed in all forms of marketing across a variety of platforms, from Twitter to hosting top-notch real-life events.

Summary

Bold product expansion, creative marketing, a loyal community, and a CEO hell-bent on building Web3’s first breakout brand. Pudgy Penguins has the perfect combination to make it a globally recognizable brand.

We are witnessing a story unfolding - a glimpse of how Web3 and blockchain will eventually become accessible to the masses. And it’s gaining momentum. Pudgy Penguins is winning the hearts of people everywhere.

Looking ahead, the brand will take another step forward with the release of a mobile game in 2025. The game will allow players to interact with their Pudgy Penguins in entirely new ways, further deepening the connection between users and the brand.