Author: Huo Huo, Vernacular Blockchain
As Bitcoin broke through the $100,000 mark, altcoins led by Ethereum began to start, and the NFT track also seemed to be rejuvenating.
On December 6, the floor price of the NFT blue chip project Pudgy Penguins rose by more than 20% in 24 hours, reaching a maximum of 22.2 ETH (now about 27ETH), and briefly exceeded BAYC (22.1 ETH). Moreover, Pudgy Penguins has been firmly in the top three of NFT market value since the beginning of this year.
From the "team internal strife" in early 2022, which caused the floor price to fall to 0.519ETH, to the current increase of more than 50 times, what made the fat penguin Pudgy Penguins come out of the trough and stand firm in the ranks of NFT blue chips? What did the team behind it do?
In fact, before November, the NFT market was in a very depressed state. In the second quarter of 2024, NFT sales fell by 45% to about US$2.28 billion compared with more than US$4.1 billion in the first quarter. In the third quarter of 2024, NFT market transactions fell by 50% to US$1.1 billion. However, after the overall recovery of the cryptocurrency market in November, the NFT market also heated up, but it was not worth mentioning compared with the increase caused by Pudgy Penguins' announcement of the issuance of Tokens.
And as early as February 17 this year, according to Blur data, Pudgy Penguins (Fat Penguin) floor price briefly exceeded BAYC (Boring Ape), which was the first time in history that BAYC was overtaken by other projects since 2021. In addition, Pudgy Penguins has maintained a strong upward trend in the first quarter of this year, with a cumulative increase of several times.
On May 12, Pudgy Penguins' Pudgy Toys series and the newly authorized Lil Pudgys are now available in the collectibles area of Target, the second largest retail store in the United States.Pudgy Toys transforms digital collectible characters into popular physical product series, seamlessly integrating the physical and digital worlds for consumers.
On July 10, Pudgy Penguins teamed up with Web3 domain name provider Unstoppable Domains to allow users to access Pudgy World through their own .pudgy domain name.With the new integration, users will no longer need to submit Web2-based credentials (such as Google or Apple accounts) to log in to the virtual world. In addition, the integration allows users to log in to their accounts without traditional passwords.
Then on July 16, the mini-game Pixelverse announced that it would introduce the fat penguin character "Pudgy" into the game, joining the popular elements of other cryptocurrencies such as the Dogecoin community. The integration allows players to play as characters in the Pixelverse game, and the Pudgy Penguins game will be officially released in 2025
So how did Pudgy Penguins develop step by step to the present?
Pudgy Penguins is a series of colorful penguin avatars launched in July 2021, which means "love, compassion and mercy". The vision is that the fat penguin image will become a beacon of good mood and positivity for everyone. A total of 8,888 Pudgy Penguins were issued on Ethereum, with a mint price of 0.03 ETH. They were sold out in less than 20 minutes after they were issued. Although the price was flat in the days after they were sold out, the price of Pudgy Penguins soon rose under the influence of the "zoo" market brought about by BAYC at the time, and the increase was 100 times compared with the launch price.
Afterwards, the holders of Pudgy Penguin called themselves "The Huddle" (team) and "Pengus" (penguin friends). Early holders could get exclusive experiences of fat penguins, related activities, intellectual property (IP) licensing opportunities and other benefits.
In the hot market at the time, Pudgy Penguins attracted celebrities such as NBA star Stephen Curry and Reddit co-founder Alexis Ohanian to buy them.
However, due to problems with the initial founding team, the project had a bumpy start. Former founder Cole Villemain was accused of operating a scam, abusing funds, and the discord between the team and the project's big investors caused conflicts between them, causing Fat Penguin to open high and close low, and soon lost its market popularity.
In December 2021, the original Pudgy Penguins operating manager and the team failed to reach an agreement on salary and responsibilities. Of course, due to dissatisfaction with his boss, he once threatened to "restore Pudgy Penguins to zero."
Then, in early January 2022, community members sent a long article accusing the Pudgy Penguins founding team of not doing what they promised, such as making games and recruiting developers, and suspected of wanting to "run away with the money."
This caused the community to be extremely dissatisfied with the Pudgy Penguins founding team, so much so that the founder was voted out in Discord in early 2022. At the same time, the floor price of Pudgy Penguins also fell to a historical low of 0.519 ETH.
The angry community demanded change, image source: x.com
Then in April 2022, a new team led by Los Angeles entrepreneur Luca Schnetzler acquired the project for $2.5 million.
Pudgy Penguins ushered in a turnaround after Luca Netz's acquisition.
After taking over the project, Luca quickly launched new measures, including hiring a new COO, applying for X and OpenSea's blue labels, launching Web2 and Web3 platforms such as the official Instagram account. After the account was opened, the Luca team remained highly active on Twitter and Instagram, and actively participated in various NFT activities, including establishing a Fat Penguin yacht party in Miami, producing community-exclusive Fat Penguin toys, releasing Soulbound Tokens, establishing a Fat Penguin-exclusive secondary trading market, selling Fat Penguin-exclusive peripheral clothing, etc., to increase social media exposure.
It can be seen that after the new team took over, the price of Pudgy Penguins spiraled upward in the next year. In May 2023, Pudgy Penguins completed a $9 million financing led by 1kx, and then soared all the way in early 2024.
In addition to media publicity, what other actions did the Pudgy Penguins team take to make Pudgy Penguins the top NFT PFP after Crypto Punks and BAYC?
From taking over in April 2022 to the beginning of 2024, Pudgy Penguins through the accumulation and precipitation of brand establishment, IP development, and online and offline cooperative marketing, the mutual cooperation of various links laid the foundation for Pudgy Penguins's highlight performance.
1) Focus on IP marketing to increase visibility
In April 2021, Yuga Labs launched BAYC, which attracted a large number of holders with the help of the bull market and continuous Airdrop, enhancing community cohesion. However, with the lack of strength in the later stages of development, Luca learned lessons and realized that in a bear market, relying solely on Airdrop is difficult for the project to sustain. For NFT projects to develop in the long term, they must establish sustainable sources of income.
Referring to the development experience of Web2, Luca realized that intellectual property (IP) has great potential. For example, in the 24 years since 1996, Pokémon's revenue has reached nearly $100 billion. He then adjusted his goal to make Pudgy Penguins a world-renowned Web3 brand.
Source: createandlearn.net
Before the acquisition, the initial team had already enriched the Pudgy Penguins NFT series. Therefore, the ecosystem is relatively complete. Luca believes that doing a good job in IP marketing is one of the most important core competitive advantages of Pudgy Penguins.
Pudgy Penguins has adopted a series of targeted strategies to convey Pudgy Penguins' brand concept and product information to the target audience through channels such as social media and offline physical product sales.
First, use social media channels to gain exposure and increase visibility. Pudgy Penguins has more than 17,300 related GIFs on the dynamic GIF image search engine, with a cumulative number of views of up to 24.3 billion times.
Pudgy Penguins has 1.6 million followers on Instagram, with tens of thousands of likes for each post. Pudgy Penguins has nearly 520,000 followers on TikTok, the overseas version of Douyin, with a cumulative likes of 16.6 million, of which the first pinned video has been played nearly 17.7 million times.
Pudgy Penguins Tiktok Account
From May to July 2024, Pudgy Penguins also launched the "#SaveThePenguins Challenge" campaign,using augmented reality (AR) filters on TikTok and Instagram to raise awareness of penguin protection and raise funds 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 cooperated with other industries.
In 2022, Pudgy Penguins cooperated with Green Kids Club to launch children's books; in 2023, it cooperated with Hologram Labs and Retail Monster to launch 3D models and penguin toys respectively; in May of the same year, Luca released the physical toy Pudgy Toys based on its intellectual property rights.
On December 11, 2023, Pudgy Penguins announced the game platform Pudgy World, which will launch brand-related hero characters such as Pudgy and Peaches to enhance the player experience.
2) IP licensing enhances community cohesion
In order to deliver value to the community, Luca has established a closer connection and a shared win-win value concept with Pudgy Penguins NFT holders by sharing its success and commercial value with holders.He said that Pudgy Penguins plans to become the first franchise IP in the Web3 field, and the company has also launched an IP licensing platform OverpassIP to promote NFT licensing and physicalization.
Pudgy Penguins has two licensing models: producing physical objects through the holder's image authorization and sharing, or increasing brand awareness through social media exposure.
3) Produce physical derivatives to generate income
The main sources of income for IP include derivative sales, games and film and television box office, among which derivatives and games are the key to monetization.
In this regard, Yuga Labs' IP development focuses on the game direction and cooperates with physical brands to realize commodity monetization. In 2023, Azuki launched the PBT agreement and Ambush's joint name, and is also exploring the realization path of combining physical goods with digital experiences.
Luca chose IP derivatives. Starting from taking over the fat penguin, he is committed to IP licensing and product planning,such as the launch of physical dolls, plush dolls, decorative pins, etc. According to relevant reports, Pudgy Penguins' physical toys sold more than 750,000 physical toys in seven months and have entered 3,100 Walmart stores in the United States. 
On May 13, Luca said that in the past 12 months, the sales of Pudgy Penguin plush toys have exceeded one million.
In addition, the Pudgy Penguins brand has expanded beyond the NFT field, applying for trademarks in the fields of printed comic books, collectible trading cards, fruit, seasonal food, board games, hoodies, hats, virtual goods, multimedia, etc.
According to reports, the Pudgy Penguins team will also plan to launch two arcade games and the Pudgie World game, of which Pudgie World is supported by zkSync.
The Pudgy Penguins project has also caused some controversy during its development. In addition to the unfulfilled promises of the early founders and team mentioned above, which led to a decline in community members' trust in the team, the following two points are worth noting:
1) Centralization Controversy
Although NFT projects generally promote decentralized governance, the management change process of Pudgy Penguins is considered to be driven by a minority of people, which to some extent goes against the original intention of decentralization. In addition, some community members have questioned the management style of the new leadership team and are worried about the future development potential of the project.
2) NFT speculation
Like other NFTs, the price of Pudgy Penguins fluctuates greatly. Some people believe that the project still relies more on market speculation than real value creation. The lack of fit between the user audience of physical dolls and Web3IP is not enough to promote the further development of Pudgy Penguins in Web3. Some users also reported that it is difficult to make a profit in the secondary market after purchasing NFT.
Pudgy Penguins' goal is 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. At present, there is still a long way to go to achieve Pudgy Penguins' lofty ideal.
Due to various opportunities, Luce has allowed Pudgy Penguins to achieve relative success in this cryptocurrency winter through similar two-layer games and IP-centric models. However, in the context of the slightly "outdated" NFT narrative, whether Pudgy Penguins can revive the industry's tone and continue to develop remains to be seen.
Originally developed as a method to create token equivalents on Bitcoin, the Inscriptions process involves embedding data, such as text, images, videos, into each satoshi, the smallest denomination of BTC.
BrianChina's regulatory stance on cryptocurrency trading and mining has remained stringent since 2019. This move has prompted a shift towards other blockchain-based technologies within the country's borders. While cryptocurrencies face a ban, Chinese businesses are exploring alternative blockchain platforms to harness the potential of Web3 applications.
JoyX's CTO confirms plans to introduce Dogecoin payments, aligning with Musk's broader vision.
AlexRipple's approval in Ireland facilitates global expansion, enabling the provision of digital asset services and establishing a strategic foothold in the broader European market.
Hui XinJudge denies Bankman-Fried's request for sentencing delay; maintains March 28, 2024 date.
KikyoThis marks the first transaction in the domain of cross-border digital yuan (e-CNY) payments in the precious metals market.
BrianRamp Network (RAMP), a financial technology company, is facilitating access to The Open Network (TON) blockchain ecosystem for millions of Telegram users. This integration enables an easy entry into the world of Web3 for Telegram's massive user base.
JoySanctioned Russian, Mikhail Klyukin, stirs controversy with £15M crypto share sale via Copper, sparking legal scrutiny and regulatory concerns.
Hui XinX experiences a global outage, affecting user feeds.
KikyoPositioned as the "1st community-owned ZK Layer 2," ZKFair leverages on Polygon's Cloud Development Kit (CDK) and Celestia DA's ZK-L2, with technical support from Lumoz RaaS.
Brian