(Bloomberg) -- Pudgy Penguins, a once hugely successful NFT project that got blown off course by drama that included the ousting of its founders, is attempting a comeback. Hopes are high in the newly energized community -- but in today’s crowded, up-and-down market for nonfungible tokens, it will take more than that to ensure a revival.
The cherubic collection of NFTs sporting crowns, hats and bow ties was red-hot when released last summer, with $13.6 million worth of the cartoon creatures trading per day by mid-August as popularity soared, according to NonFungible. Then prices and demand collapsed in the fall as Pudgy Penguins holders grew dissatisfied with the way the founding team was developing the project. The virtual community eventually voted to expel the founders, leading them to put the project up for sale.
Now Pudgy Penguins have new owners. On April 1, the project was purchased for 750 Ether (about $2.4 million at current prices) by a group of mostly anonymous buyers. Leading the team is a self-proclaimed high-school dropout, ecommerce entrepreneur and social influencer who goes by the name of Luca Netz. Another owner who confirmed his involvement is Drew Koven, co-managing director of LDR Ventures. Koven was vice president of Guess? Jeans, president of ecommerce for Steve Madden and chief marketing officer of toy brand Melissa & Doug before going into venture capital and advising on startups, according to his bio page on LDR’s website.
The group’s 58,900-strong Twitter account is leaving tantalizing hints of airdrops, or giveaways of digital goods, with the owners vowing a “new roadmap.” In an interview, Netz revealed ambitions for Pudgy Penguins-brand toys at Walmart, as well as branded clothes, games and a dance party on a Miami yacht. So far it is only talk, but there appear to be believers. In the last week, the floor price of Pudgy Penguins jumped 170%, per tracker DappRadar. On April 5, daily sales of Pudgy Penguins spiked to $2.95 million, before declining to around $709,500 on April 7, according to NonFungible.
With new NFT collections debuting daily, a revival may be easier said than done. The market has been in steep decline since January, with trading volume on the world’s biggest NFT marketplace, OpenSea, down 67% in the past 30 days, according to DappRadar. One in three NFT collections has essentially expired, with little or no trading activity, per tracker Nansen.
“This could turn into something big,” said Aaron Brown, a crypto investor who writes for Bloomberg Opinion. “You have a strong NFT with a solid fan base, now apparently controlled by some of its biggest fans. If it brings aboard the right mix of technologists and evangelists, it might expand into related ventures and become big in the metaverse. But it could as easily fail and be forgotten.”
The new team’s vision seems to be taking a page from the playbook of Yuga Labs and its successful Bored Ape Yacht Club NFT community. Yuga had struck a deal for a BAYC-related game with Animoca Brands, has held real-life parties and is hinting at more branding deals. An associated ApeCoin has a $3 billion market value, while Yuga recently raised $450 million in a funding round led by Andreessen Horowitz.
Pudgy Penguins’ floor price of less than $8,000 is a fraction of the $360,000 floor price for a Bored Ape, according to DappRadar. But that’s what the community hopes will change.
“We definitely pull inspiration from” Yuga, Netz said in an interview. Netz, who gave his age as 23, says he owns 14 penguins himself.
The project’s new and expanding team of 20 is already planning a raffle for 100 penguin owners to come to a yacht party on May 7 in Miami, Netz said.
“I want to have fun, I want to create a place for people to laugh and dance,” Netz said.
Where a few months ago curse words and despair ruled, the penguins’ 21,100-member-strong Discord channel is now buzzing with optimism about Netz’s plans.
“He has a lot of great plans and the community is excited for this to grow into something bigger than it’s ever been,” Maddie Spring, an owner of a Pudgy Penguin, said in a message. “The community is still very hopeful for the future.”
Whether this new push will lead to a full revival of Pudgy Penguins remains to be seen. Hope -- and hype -- are no guarantee of success.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
