Author: Huohuo, Vernacular Blockchain

As Bitcoin broke through the $100,000 mark, altcoins led by Ethereum began to launch, and the NFT track seemed to be beginning to rejuvenate.

On December 6, the floor price of NFT blue-chip project Pudgy Penguins rose by more than 20% within 24 hours, reaching a maximum of 22.2 ETH (currently about 27 ETH), briefly exceeding BAYC (22.1 ETH). Moreover, Pudgy Penguins has been among the top three in NFT market value since the beginning of this year.

From the "internal team strife" in early 2022, which caused the floor price to fall to 0.519 ETH, to now it has increased more than 50 times. What allowed Pudgy Penguins to get out of the trough and stand firmly in the ranks of NFT blue chips? The team behind it What did you do?

In fact, before November, the NFT market was in a very sluggish state. NFT sales in the second quarter of 2024 dropped by 45% compared with more than US$4.1 billion in the first quarter, about 2.28 billion US dollars. In the third quarter of 2024, the NFT market transaction volume fell by 50% to US$1.1 billion. However, after the overall recovery of the cryptocurrency market in November, the NFT market has also heated up, but it is not worth mentioning compared with the increase caused by Pudgy Penguins’ announcement to issue Token.

And as early as February 17 this year, according to Blur data, the floor price of Pudgy Penguins briefly exceeded that of BAYC. This is the first time in the history of BAYC since 2021 that it has been surpassed by other brands. The project was completed and surpassed. In addition, Pudgy Penguins has maintained a strong upward trend in the first quarter of this year, achieving a cumulative increase of several times.

On May 12, Pudgy Penguins’ Pudgy Toys series and the newly licensed Lil Pudgys are now on sale in the collectibles section of the Target store, the second largest retail store in the United States. Pudgy Toys will bring digital collectible characters, Transformed into a popular line of physical products that seamlessly blend the physical and digital worlds for consumers.

On July 10, Pudgy Penguins joined hands 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 a Google or Apple account) to log into virtual worlds. Additionally, the integration allows users to log into their accounts without the need for traditional passwords.

Subsequently on July 16, the mini-game Pixelverse announced that it would introduce the fat penguin character "Pudgy" into the game.Dogecoin community Doge and other popular elements of cryptocurrencies. This integration allows players to play characters from Pixelverse games. The Pudgy Penguins game will be officially released in 2025

So how did Pudgy Penguins develop to where it is today?

Pudgy Penguins is a series of colorful penguin avatars launched in July 2021, which means "love, sympathy and compassion". The vision is that the fat penguin image becomes a beacon of good mood and positivity for everyone . The total number was 8888, issued on Ethereum, and the Mint price was 0.03 ETH. It was sold out in less than 20 minutes after being issued. Although the price performance was mediocre in the few days after being sold out, it soon became popular in the "zoo" brought by BAYC at that time. Affected by the market situation, the price of Pudgy Penguins rose, up to a hundred times compared with the sale price.

Subsequently, the holders of Pudgy Penguin called themselves "The Huddle" (team) and "Pengus" (Penguin friends). Early holders can obtain exclusive experiences, related activities, and intellectual property rights of Pudgy Penguin. (IP) licensing opportunities and other benefits.

During the hot market at the time, Pudgy Penguins attracted celebrities such as NBA star Stephen Curry and Reddit co-founder Alexis Ohanian to purchase.

However, the project had a bumpy start due to problems with the initial founding team. Former founder Cole Villemain was accused of operating a scam, misusing funds, and discord between the team and the project's major investors, causing conflicts between them. , causing Fat Penguin to open high and move low, and soon lost market popularity.

In December 2021, the original operating director of Pudgy Penguins did not reach an agreement with the team on salary and responsibilities. Of course, due to dissatisfaction with the boss, he once threatened to "return Pudgy Penguins Fud" zero".

Then, in early January 2022, community members posted a long article accusing the Pudgy Penguins founding team of failing to do all the game production and recruiting developers they promised, and some wanted to "take away the money and run away." suspicion.

This caused extreme dissatisfaction in the community 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 an all-time low of 0.519 ETH.

Angry community demands change, Image source: x.com

The project was subsequently acquired in April 2022 by a new group led by Los Angeles entrepreneur Luca Schnetzler for $2.5 million.

Pudgy Penguins ushered in a turnaround after the acquisition by Luca Netz.

Luca quickly implemented new measures after taking over the project, including hiring a new COO, applying for the blue label of X and OpenSea, and launching official ins accounts and other Web2 and Web3 platforms. 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, and issuing soul-binding tokens. (Soulbound Token), establish an exclusive secondary trading market for Fat Penguin, sell exclusive peripheral clothing for Fat Penguin, 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 US$9 million in financing led by 1kx, and then soared in early 2024.

So in addition to media promotion, what other actions has the Pudgy Penguins team done to make Pudgy Penguins the leading NFT PFP after Crypto Punks and BAYC?

From taking over in April 2022 to early 2024, Pudgy Penguins has accumulated and accumulated through brand establishment, IP development, and online and offline cooperative marketing. The mutual cooperation lays the foundation for the highlight performance of Pudgy Penguins.

1) Focus on IP marketing to increase awareness

In April 2021, BAYC launched by Yuga Labs attracted a large number of holders with the help of the bull market and continuous Airdrop, enhancing community cohesion. However, with the sluggishness in the later stages of development, Luca learned lessons from it and realized that in a bear market, relying solely on Airdrop would be unsustainable for the project. For NFT projects to develop in the long term, sustainable revenue sources must be established.

Referring to the development experience of Web2, Luca realized that intellectual property (IP) has huge potential. For example, in the 24 years since 1996, Pokémon’s revenue was close to 100 billion US dollars, and he immediately adjusted his goal to Build Pudgy Penguins into a globally renowned Web3 brand.

Source: createandlearn.net

Before the acquisition, the initial teamThe Pudgy Penguins NFT series is already rich after all. Therefore, the ecology 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 social media, offline physical product sales and other channels.

First, use social media channels to gain exposure and increase visibility. Pudgy Penguins has more than 17,300 related GIFs on the animated GIF image search engine, with a cumulative view of 24.3 billion times.

Pudgy Penguins has 1.6 million followers on Instagram, with tens of thousands of likes per post. Pudgy Penguins has nearly 520,000 fans on TikTok, the overseas version of Douyin, with a total of 16.6 million likes, of which the first short video pinned to the top has been played nearly 17.7 million times.

Pudgy Penguins Tiktok account

From May to July 2024, Pudgy Penguins also launched the "#SaveThePenguins Challenge" activity, through Augmented reality (AR) filters for TikTok and Instagram raise awareness for penguin conservation and funds for environmental organizations.

Pudgy Penguins also participates in a series of online marketing and offline activities, such as Art Basel Miami, and cooperates 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 respectively to launch 3D models and penguin toys; in May of the same year, Luca released a book based on its knowledge Property rights to physical toys Pudgy Toys.

On December 11, 2023, Pudgy Penguins announced the game platform Pudgy World. The platform will launch brand-related heroic 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 better relationship with Pudgy Penguins NFT holders by sharing its success and commercial value with holders. Close connections and shared win-win values. He said that Pudgy Penguins planDesignated as the first franchise IP in the Web3 field, the company also launched the IP licensing platform OverpassIP to promote NFT authorization and materialization.

There are two licensing models for Pudgy Penguins: licensing the holder’s image to produce physical objects and sharing the profits, 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 games and cooperates with physical brands to realize product monetization. In 2023, Azuki launched the co-branding of the PBT protocol and Ambush, and is also exploring monetization paths that combine physical goods with digital experiences.

Luca chose IP derivatives. Since taking over Fat Penguin, he has been committed to IP licensing and product planning, such as the launch of physical dolls, plush dolls, decorative pins, etc. According to related reports, Pudgy Penguins physical toys have sold more than 750,000 physical toys in seven months and have been launched in 3,100 Walmart stores in the United States.

On May 13, Luca said more than one million Pudgy Penguin plush toys had been sold in the past 12 months.

In addition, the Pudgy Penguins brand has also expanded beyond the NFT field into printed comic books, collectible trading cards, berries, seasonal foods, board games, hoodies, hats, virtual goods, multimedia, etc. A trademark has been applied for.

According to news, 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 controversies during its development. In addition to the unfulfilled promises of the early founders and teams mentioned above, the community In addition to the decline in members’ trust in the team, there are two other points worth noting:

1) Centralization controversy

Although NFT projects usually promote decentralized governance, Pudgy Penguins The management change process is considered to be driven by a small number of people, which to some extent violates the original intention of decentralization. In addition, some community members have questioned the management methods of the new leadership team and are worried about the future development potential of the project. .

2) The speculative nature of NFT

Like other NFTs, the price of Pudgy Penguins fluctuates greatly. Some people believe that the project still relies more on market hype than real value creation. There is a lack of fit between the physical doll user audience and Web3IP.It is enough to promote the further development of Pudgy Penguins in Web3, and some users have reported that it is difficult to make profits 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, it is far from Pudgy Penguins’ lofty ideals There's still some way to go.

Due to various opportunities, Luce has allowed Pudgy Penguins to achieve relative success in this cryptocurrency winter through similar two-tier games and IP-centric models, but the NFT narrative has become slightly outdated. "Under the background of "Pudgy Penguins", it remains to be seen whether Pudgy Penguins can revitalize the tone of the industry and continue to develop.