Pudgy Penguins Review: The Good, The Bad, and The Ugly

Non-fungible tokens (NFTs) have taken the world by storm, and there is no sign of their popularity slowing down anytime soon. In 2021, NFTs began to see their mainstream adoption, which is growing further this year. 

NFTs are unique and non-interchangeable, which makes digital ownership provable by storing the metadata on the blockchain. This metadata is the link to the image of an image, which means the image itself is not stored on the blockchain due to it being costly. Instead, it is stored on an external storage platform like IPFS. 

When it comes to creating NFTs, there are tons of ways. You can either do it manually or through systems created by NFT marketplaces like OpenSea and Rarible. As the crypto world goes multichain, there are several options there as well, such as Ethereum, Solana, Polygon, and others. But of course, difficult blockchains have different trade-offs in terms of speed, cost, usage, and security.

For now, NFTs are primarily used for art and collectibles but have begun to see their use case in gaming, music, and sports collectibles. Due to their ability to verify ownership, NFTs are used to offer specific benefits as access passes. 

Currently, collectors are paying lots of money to buy crypto artwork. This speculation boom has led to digital artist Beeple selling his “Everydays - The First 5000 Days” for a massive $69 million at a Christie’s auction, making him the third-most-expensive living artist and further propelling this NFT mania.

Among NFTs, profile picture (PFP) NFTs are currently seeing particular attention as celebrities like Jay-Z, and Steve Aoki display their NFTs as profile pictures on Twitter. Even brands like Nike and Adidas have joined this pace, going deeper into the crypto collectible space. 

Pudgy Penguins is one such PFP NFT that has attracted the masses. But this NFT collection’s journey hasn’t been all steady incline; rather, it has experienced its own ups and downs.

What are Pudgy Penguins?

During the growing NFT trend in 2021, Pudgy Penguins was launched on July 22 and were sold out in less than 20 minutes. These cute, colorful, cartoon penguins are “located in the freezing cold, arctic region of the metaverse.”

There are only a limited number of 8,888 unique Pudgy Penguins available on the Ethereum blockchain. Each of these penguins is unique, meaning no two penguins are exactly alike. These Pudgy Penguins are randomly generated from over 150 hand-drawn traits such as bowl cuts, a mohawk, glasses, hats, and scarves.

While every Pudgy Penguin has unique traits, some attributes are rarer than others. For instance, only 58 Pudgy Penguins have a crown. These traits can be seen under “properties” on OpenSea or at a third-party tool such as Rarity Tool.

Among these penguins, there are five that were created by the artist and do not have randomly generated traits which makes them the rarest. These rare Pudgy Penguins include traits like a banana suit, a shark costume, a pineapple suit, and a ghost costume. One of the rarest penguins is facing the opposite direction of all other Penguins.

In August, the most expensive Pudgy Penguin #6873 was sold for 150 WETH and then put on sale for 1,000 ETH. It was the only left-facing penguin in the collection, which sent its value skywards. 

Reddit co-founder Alexis Ohanian also joined the community as he purchased a pudgy penguin and posted about it on Twitter which helped this collection gain traction. When the New York Times covered the Pudgy Penguins’ story, its numbers grew even more. Since then, it has also featured on CNBC and Bloomberg.

Currently, 4,433 owners hold these 8,888 Pudgy Penguins NFTs. In the Pudgy Penguin universe, owners are referred to as Hurdlers. Their floor price, the lowest it is available in the market for, is currently sitting at 1.239 ETH, up from 0.03 ETH it was minted at. 

In terms of overall sales volume, Pudgy Penguins has done a total of $155 million, according to CryptoSlam.

There are also 22,222 Lil Pudgys, each of which is a unique collectible NFT randomly generated from 400 traits. Every Pudgy penguin holder was given a Lil Pudgy while others can be minted by anybody. So far, 18,723 Lil Pudgys have been claimed or minted.

The Troubles

The Pudgy Penguin NFT project was created by a group of people, including Ecko, Jonan, Cole, Straker XP, Wybo, Mr. Tubby Hiro, and Micah. These founding team members receive a small percentage in royalties from each NFT sale and will continue to have their pockets filled as long as trading volume persists.

Pudgy Penguin was hit with a controversy when one of its founders Cole Thereum was found to have a not-so-pristine history. Cole reportedly ran a business called eBoy Outlet, which was flooded with negative reviews with customers saying they never received their orders, refunds, or even responses to their complaints. 

As Cole got heat for his past behavior, he went on to admit that he used to be a paid NFT project shill but added that he regrets those ventures. While this didn’t help raise confidence in the project, the community was quick to take action and keep the chubby and flightless Antarctic creatures alive.

Revival: Community Strength

Today, there are tons of NFT projects available in the market with a new one popping up every other day. So, when looking to buy an NFT as an investment asset, you would want to evaluate the project on several factors like the founding team, their ability to execute and deliver on the roadmap. 

The viability of an NFT project depends on more than just looks. Art is subjective anyway and in crypto during the current manic phase, it’s more about flipping NFTs for profits than just aesthetics. The strength of a project’s community could actually be the most important thing about an NFT. 

NFTs derive their value largely from their communities, and only those with strong communities may be able to withstand bearish periods. Communities even in some cases have even managed to revive projects when the founding team has failed. Pudgy Penguins is one of the most recent examples of this.

In early January 2022, Pudgy Penguins voted out its founders after they failed to deliver on their goals and drained the treasury of funds. And the community is arguing for the decentralization of the entire project. 

A Twitter user and Pudgy Penguins owner @9x9x9eth, who has publicly stated that he has spent nearly 600 ETH on the collection and holds 242 Pudgy Penguins NFTs, including a rare ‘banana” penguin, told a media publication that co-founder Cole Thereum “promised a game, a token, an educational book on NFTs and more” to the community last September.

But even “after a half year, they still have not yet set up the team, they are still in the stage of hiring.” 9x9x9 then published a Twitter thread claiming the founders were looking to abandon the project and offered to sell him the NFT project for 888 ETH (about $2.8 million), an offer he turned down.

The news sent the floor price of the Pudgy Penguin to 1.7 ETH, from about 0.6 ETH, at the time.

Battle for Control

Given Pudgy Penguins’ strong community, others in the crypto space were eager to help the project out as well.

The project has received buyout offers as high as 750 ETH from the likes of Mintable co-founder Zach Burks, Netz Capital’s Luca Netz, and NFT collector @beaniemax. But of course, not everyone is in the favor of a buyout. 

Other prominent stakeholders in the market also floated the idea of migrating the Pudgy Penguin community to a new project called Wrapped Penguins, which are available as a free mint on the NFT platform Metadrop for current holders. 

Wrapped Penguins aims to sever all ties with the original founding team and instead create a parallel community and implement the decentralized autonomous organization (DAO) framework.

Wrapping an asset allows the owners of a token to hold an identical “wrapped” token, such as in Wrapped Ethereum (WETH) and Wrapped Bitcoin (WBTC). A wrapper is a smart contract that takes an asset and issues a parallel one. 

Through this method, the Pudgy Penguins NFT holders get to hold an identical “wrapped” penguin. The Wrapped Penguins project also assured that the holders will also be able to unwrap their token into the original NFT at any time. Pudgy Penguins “could be the first pure decentralized PFP project ever,” 9x9x9 told CoinDesk.

How to Buy Pudgy Penguins?

If you want to buy the NFT, OpenSea is the largest marketplace in terms of transaction volume. Before going further, you will need to set up a crypto wallet like MetaMask, the most commonly used wallet for Ethereum. Once you’ve set up your crypto wallet, fund it with some ETH, the native asset of Ethereum blockchain, and make sure it is enough to cover the cost of the NFT as well as gas fees, which depend on the network usage.

Now you are ready to buy some Pudgy Penguins. To get started, go to OpenSea and search for your NFT. Once you have found the one that you would like to purchase, click on the NFT, which will provide all the details about it. 

Then, click the “Buy Now” button or “Make Offer” for the NFT you are interested in. Now, OpenSea will show you the cost of the NFT, including the fees. After you make the purchase, make sure to approve the transactions in your Metamask wallet. 

Conclusion

NFTs are constantly gaining mainstream adoption for the right reasons. Besides making digital ownership provable, NFTs are creating new monetization models and distribution channels for creators. Additionally, it is giving us new ways to form communities with like-minded people.

NFTs are giving both creators and users a greater degree of distribution control over their assets. And while its current implementation is limited and isn’t perfect, NFTs have a vast scope with their future use cases that can cover everything from finance, gaming, ticketing, academic certifications, IP, real estate, and any physical assets.

We’re simply at the first innings of the rise of NFTs, and the future may look completely different from what we are seeing today. 

Already, we have started to see their application in DeFi protocols and their fractionalization that helps increase the liquidity of the space as well as allowing smaller players to get a share in a valuable asset.

With metaverse gaining traction as well, popular NFT collections may start to become highly prized assets in this virtual world. In the physical world, meanwhile, NFTs can be used by brands, celebrities, and influencers to promote their products, granting access to limited offers and exclusive events.

For now, profile picture projects (PFP) are enjoying the most uptrend, such as Yuga Labs’ Bored Ape Yacht Club, Larva Labs’ CryptoPunks, and Pudgy Penguins, which drove the NFT boom in NFT sales last year. 

Even Twitter joined in as it announced that Twitter Blue subscribers on iOS devices will be able to verify their PFP NFT, which will be clearly distinguishable, appearing as hexagons rather than the circular regular profile photos across the social app. Reddit is also working on a similar feature, “testing the ability to use NFTs as profile pictures (avatars) and verify ownership.”

The biggest perk of owning a Pudgy Penguin, much like any other PFP NFT, is flaunting it as your profile photo and making yourself part of the crowd.