Written by: Mu Mu
Editor: Wen Dao
When the trading volume and floor price of well-known blue-chip NFTs such as BAYC, Moonbird, and Doodles both declined, Pudgy Penguins bucked the trend and became the "sales champion" of the NFT market on March 9.
Since the second half of 2023, the floor price of Pudgy Penguins has continued to rise, and it has set new historical highs many times in 2024. At the end of February, it broke through the 18 ETH mark, with a value of $59,000, showing strong market performance. CryptoSlam data shows that on March 9, Pudgy Penguins' 24-hour sales exceeded $4 million, temporarily leading CryptoPunks and BAYC, ranking first in the NFT sales list.
How did this "fat penguin" survive the bear market and become the new darling of blue chips?
Brand building and IP derivatives have been the key strategies for Pudgy Penguins' strong rise over the past year. By selling physical toys Pudgy Toys that match NFTs, the project achieved sales of $10 million in less than a year.
The sales of 750,000 Pudgy Toys not only expanded the brand awareness of Pudgy Penguins NFT beyond the Web3 market, but also gathered a group of offline traffic, which in turn provided growth momentum for NFT sales. Even Pudgy Penguins CEO Luca Netz had to admit that the large-scale adoption of NFT came from users' love for IP.
The successful operation of Pudgy Penguins has once again verified the effectiveness of transforming Web3 IP into the commodity market.
01 Floor price increased by 150% in one year
In 2014, the NFT project Pudgy Penguins finally had its moment of glory. In the Chinese market, it has a name that fits its image - Fat Penguin. Recently, this "fat penguin" has frequently challenged the throne of NFT sales, and its floor price and sales have repeatedly surpassed the two major NFT market leaders BAYC and CryptoPunks.
Pudgy Penguins NFT has 8,888 different penguin images
On March 9, Pudgy Penguins’ 24-hour sales exceeded $4 million, surpassing CryptoPunks and BAYC.
On February 17, Pudgy Penguins’ floor price surpassed BAYC, which has long been the top PFP NFT, for the first time. Blur data showed that on that day, BAYC’s floor price was 22.15 ETH (worth $59,800 at the time), and Pudgy Penguins’ floor price was 22.54 ETH (worth $60,900 at the time).
Although the advantage is slight, it is a phased result of Pudgy Penguins' continued growth in recent months.
According to Dune data, the floor price of Pudgy Penguins has increased several times in the past 90 days, far ahead of a number of blue-chip NFT series such as CryptoPunks, BAYC, MAYC, and Moonbirds. In contrast, the two "big brothers" BAYC and CryptoPunk have weak growth.
Blue chip NFT project floor price 90-day increase
In terms of market value performance, CryptoPunks and BAYC still rank first due to their accumulation in the last cycle. But if you look closely, BAYC has been on a downward trend since its peak in 2022, with its market value shrinking by nearly 300% to $580 million. Pudgy Penguins, on the other hand, has continued to climb during the same period and has accumulated $460 million.
Blue-chip NFT project market value trend
The continued growth has also put Pudgy Penguins on the hot list of the NFT market. In the ranking of NFT hot projects in the past 7 days and the past 30 days, "Fat Penguin" ranked first, and its brand power has greatly increased.
7-day/30-day NFT hot project rankings
On March 13, Coingecko data showed that the floor price of Pudgy Penguins was 13.1 ETH, equivalent to US$52,900, up 22% in the past 30 days and 150% in the past year; while the floor price of BAYC had fallen to 14.55 ETH, equivalent to US$58,700, down 35.2% in the past 30 days and 78.4% in the past year.
A recent acquisition by Yuga Labs, the parent company of BAYC, may be one of the reasons for the users’ selling. Last month, Yuga Labs acquired Moonbirds’ parent company PROOF, and the acquired assets included the team, intellectual property rights, and art portfolio. However, due to the poor reputation of the latter, Yuga Labs caused dissatisfaction in the community, and the price of BAYC began to fall sharply from then on.
Pudgy Penguins' strong growth poses challenges to blue chips such as BAYC.
02 "Fat Penguin" stumbles through "Bear" road
On Instagram, Pudgy Penguins has more than 1.33 million followers, and this number is still increasing. What did Pudgy Penguins do right to survive the bear market and rise against the trend?
In fact, this IP, which consists of 8,888 image-type NFTs, had a highlight moment when the NFT market was booming, but was abandoned by users due to trust issues during the operation process until it changed hands.
In July 2021, a group of college students founded the Pudgy Penguins project. A month later, it became popular due to an article by New York Times reporter Kevin Roose, and the floor price quickly exceeded 3 ETH. NBA superstar Stephen Curry also bought a "Penguin" for 3.5 ETH;#6873in the series also set a sales record of 225 ETH for Pudgy Penguins.
Unfortunately, the young founding team did not operate the business "with care" and caused many farces. For example, the blind box event was briefly removed from OpenSea due to users' criticism of lack of sincerity. The team's subsequent sale of NFTs also dampened the enthusiasm of community users, and Pudgy Penguins' performance began to decline.
In April 2022, Pudgy Penguins was finally sold for $2.5 million to Luca Netz, who has experience running e-commerce companies and is now the CEO of Pudgy Penguins.
Prior to taking over this project, Luca worked in several physical companies, did dropshipping business, served as CEO of a jewelry company, and used marketing methods to rescue a clothing company from trouble. In 2021, Luca became the Chief Marketing Officer of the toy gun company Gel Blaster, and after working there for a year, he acquired Pudgy Penguins.
With extensive marketing experience and a strong focus on brand building, Luca has given Pudgy Penguins a direction: to build a sustainable revenue source.
This is very different from the operation mode of the old NFT. Yuga Labs' success is inseparable from its continuous "nesting dolls" for BAYC in the crypto bull market, allowing holders to obtain a new series of airdrops, increasing user stickiness, and using the high price of BAYC to stimulate consumers who want to get airdrops to buy, which is indeed effective in the crypto bull market.
When Luca took over Pudgy Penguins, the bull market was already at its end, and the release of new dolls would only continue to dilute the value of the original NFT series. During the bull-bear transition period, Yuga Labs also realized this and began to shift the BAYC IP to Web3 game ecosystems such as Otherside to improve the usability of NFTs. At that time, Pudgy Penguins' IP was in a state of failure due to improper early operations, and its brand power had been greatly reduced.
Luca decided to rebuild the IP value of "Fat Penguin" "in a Web2 way".
After taking over Pudgy Penguins, Luca began to operate IP licensing and product planning. In May 2023, Pudgy Penguins began selling physical toys "Pudgy Toy" online after completing $9 million in fundraising.
PudgyToys toys designed based on NFT images
Pudgy Toy is designed based on the "Fat Penguin" NFT, and Luca's past work experience began to play a role. He pushed these toys directly into the market of the well-known supermarket brand Walmart.
At the end of September 2023, Pudgy Toy was available in 2,000 Walmart stores in the United States, expanding the brand of NFT IP Pudgy Penguins to a huge consumer market.
Luca Netz personally stood on various social platforms and media platforms at the time, “For only $20 and three minutes, Pudgy Toys can provide users with their first blockchain wallet and NFT. No other product can attract users as cheaply and effectively as our product. This is the Trojan Horse we are using to get people into Web3.”
It turns out that the IP-derived approach to Web2 users is very effective. In less than a year, the Pudgy Toys series has achieved sales of $10 million and sold more than 750,000 units.
Pudgy Penguins has also established a wide range of social media channels, not just offline. On Instagram, Pudgy Penguins has millions of fans, and each post has tens of thousands of likes. On TikTok, Pudgy Penguins has 250,000 fans, and the first pinned video has been played more than 13 million times.
Now that the traffic has arrived, the next step is how to convert it.
In order to establish a closer connection between NFT and its holders, Pudgy Penguins launched the IP licensing platform OverpassIP, allowing NFT holders to realize profits through authorization and cooperation with Web2 platforms or offline brands.
This is equivalent to revitalizing the Pudgy Penguins NFT series, giving early holders an incentive to establish a connection with the entity and amplifying the "Fat Penguin" IP through a wider market.
Recently, Pudgy Penguins has also been enriching its ecosystem and is about to launch its own branded Web3 game Pudgy World, which provides a narrative-driven open game for NFT holders and toy owners. Each fat penguin toy has a QR code, and users only need to scan the code to unlock NFT items in the game or achieve personalized customization.
The case of Pudgy Penguins once again proves that NFT is not just for hype in the Web3 market. If the brand is properly operated and the marketing methods keep up, NFT IP, like all entertainment IPs, can also accumulate value and continue to innovate and develop.
Unlike traditional IP, Web3 NFT IP has its own pricing market. The existence of NFT trading market will make the value of IP transparent. It is clear at a glance who is the hottest in NFT trading markets such as OpenSea and Blur. Blockchain records the ownership of NFT in an open and transparent manner, providing the best infrastructure for the circulation of IP.
It can be foreseen that with the successful counterattack of Pudgy Penguins, NFT will continue to evolve in 2024 and explore more diverse adoption scenarios.