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The Rise, Fall, and Redemption of Pudgy Penguins NFTs

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In the wide world of NFTs and crypto, volatility isn’t always just volatility — sometimes, rapid surges in the value of a digital asset may predict continued, sustainable growth. Following Pudgy Penguins’ August 2022 floor price surge of over 400 percent, the project has since seen its floor continue a steady increase. In a single week (from December 22 – 28), Pudgy Penguin’s floor price has risen over 65 percent, shooting up from 4.50 ETH to 6.92 ETH as of writing, according to data collected by CoinGecko.

Pudgy Penguins’ floor prices as of December 2022. Source: CoinGecko

And it’s not over yet — on December 27, four Pudgies sold for 40, 33, 27, and 25 ETH as part of a broader 175 ETH floor sweep that pushed the project into the 6 + ETH range.

What began as a price surge in August has evolved into what could be some serious and sustainable growth for the project. The rise comes at the tail end of a year that saw the Pudgy project itself sold off in a multi-million dollar deal that turned it over to new leadership just as trust with its founding team had faded. But what exactly happened to Pudgy Penguins that makes its recent redemption so powerful — and perhaps indicative of how bigger NFT projects need to be handled moving forward?

Wait, what exactly is a Pudgy Penguin?

During the NFT market’s animal-themed PFP project bull run in 2021, Pudgy Penguins quickly shook up the NFT ecosystem following the massive success of the Bored Ape Yacht Club. The project is a collection of, you guessed it, pudgy penguin avatars.

I want a Pudgy Penguin avatar, too! But how do I buy one?

First, you must decide where to buy them, with OpenSea and LooksRare being your two best options. Then you need to set up an account with Coinbase or Gemini, fill your account with crypto, and voila — you’re ready to purchase.

Source: OpenSea

Are there any left for me? How many Pudgy Penguins are there?

There are 8,888 — and the initial mint has long sold out. But thankfully, the secondary market on NFT marketplaces like OpenSea is quite active. Community support was so strong following its launch that one collector even shelled out a cool 225 ETH for their penguin in September of 2021, an amount worth nearly $1 million at the time.

Pudgy Penguin #6873 — the most expensive Pudgy Penguin sold thus far. Source: Pudgy Penguins

Unfortunately, while the Pudgy Penguins project showed great promise in the months after its launch, its momentum quickly evaporated.

Pudgy Penguins’ fall from grace

Perhaps the ultimate faux pas in the NFT space is the rug pull — when a project’s founders run off with funding that supporters contributed in good faith toward a project’s development. Even the slightest suspicion from a project’s community that its founders may do something of the sort can be enough to tank its value. That’s exactly what happened within the Pudgy Penguins community in late 2021 when they discovered that the founding team had emptied the project’s funds.

Whispers of a Pudgy Penguin rug pull

Some members of the larger NFT community weren’t surprised by this development, however, as ColeThereum — who created Pudgy Penguins — had been previously caught engaging in scam-adjacent behavior long before the launch of this PFP collection. Immediately after the project’s community caught wind of the founders’ recent — and past — behavior, several of its most prominent members took to social media to voice their concerns about the project’s future. Namely, 9x9x9 — who reportedly owned over 200 Pudgy Penguin NFTs by January 2022, released a barrage of tweets that openly criticized the founding team’s treatment of its community and its apparent desire to abandon ship.

Following speculation that they would succeed the Pudgy Penguins founders in leading the project, 9x9x9 publicly disclosed that they had rejected an offer to buy the IP to the collection outright for 888 ETH. Thankfully, 9x9x9’s desire to do right by the Pudgy Penguins community did not fall on deaf ears, as another community member took it upon themselves to right the ship.

New leadership leads to a comeback

In April of 2022, the Pudgy Penguins team closed a sale and handed off leadership of the project. The buyer? Luca Schnetzler, who picked up the collection for 750 ETH (roughly $2.5 million), having been a longtime fan of the project and its community. “Pudgy Penguins was my first PFP NFT, and I knew when I first bought it that Pudgy Penguins had the highest upside when it came to brand potential,” Schnetzler said while speaking to nft now. “When I saw other people bidding on Pudgy Penguins, I knew I had to step in. I’ve built multiple brands to nine figures in revenue over the last five years, and I felt like my skill set was the best to succeed at the job.”

What followed was what some members of the NFT community are dubbing “the greatest comeback story” that’s happened thus far in the space. In the four months since the acquisition, the project’s new leadership established the Pudgy Penguins IP as a force to be reckoned with. Whether in media or merchandising, the new management team has been hard at work giving the community new avenues to show their support for the project — in addition to finding ways to onboard new users into the rapidly growing community via a strong social media presence.

On top of this, Schnetzler has shown a deep understanding of the wider appeal of the Pudgy Penguins IP, dubbing it “a feel-good brand.” In service of this, Schnetzler has focused on rebranding efforts to unlock the IP’s ability to “uplift people and make their day a little easier.”

As the project continues to dip in and out of OpenSea’s top 10 volume chart list, fans of currently-troubled NFT projects may have new reasons to hope for a return to form for their supported projects. Hopefully, in the future, truly “dead” projects will become the exception and not the rule following a collapse.

“I think with the right team and IP, [Pudgy Penguins’ renewed success] can be replicated. I hope when it’s all said and done, people will look at what we did with Pudgy and will open the floodgates for top-tier Web2 talent to take this space seriously,” Schnetzler said. Let’s hope he’s right on the money.

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