A $2.5M sale on Pudgy Pens NFT Collection

 

The Pudgy Penguins non-fungible token (NFT) project is under new leadership after the close of a long-awaited 750 ETH ($2.5 million) sale.

An entrepreneurial group headed by a Pudgy Penguins holder. Luca Netz will buy control of the project, along with royalties, from the original four co-founders of the project, according to people involved with the deal. Netz will be the new leader of “The Huddle,” along with his collaborator Cameron Moulène and several other stakeholders.

Control of the project will allow the buyers’ group to launch a token and conduct airdrops to other holders of the NFT series, as well as other rights.

The deal comes as the Pudgy Penguins community ousted their founding team in a contentious Discord vote in January. Since then, holders of the cute flightless digital birds have been waiting for word on the project’s uncertain future.

“This deal’s taken way longer than I thought,” said Netz, who last spoke with CoinDesk in January, when a preliminary deal was struck between Netz and the prior founding team.

Friday’s Pudgy Penguin trading spiked over NFT Marketplace OpenSea, as deal closing rumors swirled. The floor price of a Pudgy Penguin jumped as high as 2.5 ETH after trading bounced between 0.7 and 1.4 ETH the past few weeks. The cheapest penguin available was listed at 2.2ETH as of press time.

Netz planned to officially announce the close of the sale on social media late Saturday, and added that the deal was “100% not an April Fool’s joke” in an interview with CoinDesk on Friday; hence his decision to wait until after April 1 to go public.

“Everything is aligned to make this one of the most prevalent projects of all time,” said Netz, who declined to comment on specific roadmap items, but hinted at least one retail partnership.

Leadership changes

Launched in July 2021, the Pudgy Penguins has become one of the most popular NFT collections, with over 49,000 ether in trading volume (about $171 million in today’s ether prices) on the NFT marketplace OpenSea.

It was featured on a New York Times column last summer detailing the NFT phenomenon, and currently touts celebrities such as NBA All-Star Steph Curry and rapper Tory Lanez among its holders.

“Penguins were my first NFT purchase,” Netz told CoinDesk. He says he was drawn to the collection because the digital penguins – donning accessories from wizard hats to bowties – “emit joy.” Netz purchased his first penguin for about 0.1 ETH last summer.

“It’s an interesting emotion to feel when looking at an NFT project,” said Netz. “The collections that evoke emotion are the most powerful.”

“They were so darn cute and everyone loved them,” said Twitter user JoeyMooose of the project’s initial reception. JoeyMooose is the proud owner of a Pudgy Penguin wearing a green mohawk. coined the collection’s popular rallying cry, “I am my penguin and my penguin is me” during an emotional Pudgy Penguins Twitter Spaces event.

Netz, who built a successful drop-shipping business before dabbling in NFTs, says he will head up the project’s marketing efforts and turn the Pudgy Penguins into “a brand that’s known both in and outside of the NFT world.”

When asked about a possible Pudgy Penguin toy, Netz responded, “It would be fiscally irresponsible if I didn’t do that.”

Wen $PENGU Token?

Rumours circulated Friday that the long-awaited Pudgy Penguins token would soon be revealed, fueling penguin buying frenzy.

Twitter user said that “speculative fervor has begun to emerge around NFT floor when there’s an expectation of tokenization,” even though it’s sometimes just rumored,” GiganticRebirth an influential member of Pudgy Penguins who holds the rare Ghost Penguin. “Tokenization reinforces the thesis NFTs will be yield-bearing assets.”

Such a move would follow in the footsteps of Yuga Labs’ Bored Ape Yacht Club, which launched its ApeCoin ($APE) token earlier this month.

Netz denied the rumors but promised a token that “respected the law” would eventually come.

“If [Bored Ape Yacht Club] did it, we will do it,” Netz told CoinDesk on Friday. “But it’s not something I want to tackle now.”

Penguin coup

Pudgy Penguin holders, who collectively refer to themselves as “The Huddle” and “Pengus,” have faced a tumultuous couple of months after their initial slingshot to fame.

With many “accidental” de-listings on OpenSea and declining sales so far this year, the desire for competent leadership has been long-awaited.

Multiple sources have claimed that the original Pudgy Penguins founding committee made lofty promises about the community, including the creation of a children’s book and a token. They also promised a metaverse game with penguin images. None of these projects were ever realized.

Other profile photo projects, such as Bored Ape Yacht Club or Cool Cats, have seen their prices rise last fall, disappointing many Pudgy Penguins NFT holders.

Co-founder of Pudgy Penguins Cole Thereum did not respond to repeated requests for comment via Twitter message.

Tensions rose to the surface last Christmas Day after tensions were intensified by a highly anticipated airdrop that revealed NFTs of fishing-rods, which were initially misspelled as “rogs.”

“That was the rod that broke the camel’s back,” said Twitter user ActuallyAgents a Pudgy Penguins community manger, said that many penguin-holders had anticipated a game at the unveiling. “Imagine if you were a kid waking up on Christmas and your grandma got you a PlayStation2 game, but you didn’t own a PlayStation2.”

The pseudonymous Twitter user was discovered in January 9x9x9 (and holder of the rare Banana Penguin) dropped a thread alleging the Pudgy Penguin founders drained the project’s treasury of funds and offered to sell the project’s shell to him for 888 ETH.

The Pengu community was shocked by the revelations, leading to the disastrous Discord vote that ended with the ousting of the founders. The floor price of a Pudgy Penguin dropped to 0.5ETH.

Barbarians at an igloo

The vote marked the project’s subsequent descent into chaos, as competing bids, a white knight offer and a grassroots effort to fork the community all played out on social media.

The bidding war began in January with Luca Net. offering 750 ETH to purchase the penguins. Other public competitors were offered by Mintable founder Zach Burks, and NFT influencer BeanieMaxi.

The pseudonymous trader GiganticRebirth offered a matching 750 ETH to Thereum and the founders to “wait for a more suitable buyer,” a suggestion that went unheeded.

Another trader pseudonymous, another Twitter user Vincent Van Dough, who heads up the Three Arrows Capital offshoot Starry Night Capital, announced he would be “wrapping” his 50+ penguins in an effort to cut off royalty payments to the original founders and jumpstart the formation of a community-owned decentralized autonomous organization (DAO).

“Wrapping” refers to a smart contract that takes an asset and issues a parallel asset. The idea behind wrapping is that it would allow penguin-holders to keep the aesthetics of their NFT, but also sever all ties with the original Pudgy Penguins ERC-721 contracts. You can also convert wrapped penguins back to their original form at any point.

“We saw this as a perfect opportunity to build a tool that would give the community some leverage,” said Metadrop co-founder Psyopcop during a Discord call with CoinDesk.

Metadrop is a NFT platform that released the code for the wrapperThis has been used in other NFT communities during turmoil.

Even for those penguin owners who chose not to opt in, the threat turned the smart contract into an exercise in nuclear politics. “They like having it as an option,” said Metadrop’s loomdart. “Just having it gives the community leverage.”

On Saturday, data were available from Nansen showed a supply of 560 wrapped penguins, or approximately 6% of the total project.

“I think Wrapped Penguins is a really interesting experiment that allows community members to opt out of the status quo,” said Alex SvanevikNansen’s CEO, is also a Pudgy Penguin holder. “You could argue it’s a community fork of the original NFT collection.”

Adding to the drama, Van Dough also challenged Mintable’s Burks to make a “legit offer” on his rare Shark Penguin, saying he would get out of the way and cease the “wrapping” efforts.

“The vibes are just terrible right now,” said JoeyMooose at the time. “It hurts that people are playing this like a game of chess.”

“Too much drama, I can’t keep up,” echoed 9x9x9, who has since shifted his focus onto his OpenDAO project.

Many times, the owners of rare and valuable penguins have outsized influence in the Pudgy Community.

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Rare penguins (clockwise, from top): 9x9x9’s Banana Penguin (purchased for 100 ETH); Vincent Van Dough’s Shark Penguin (purchased for 69 ETH); GiganticRebirth’s Ghost Penguin (purchased for 100 ETH). OpenSea Images

The ‘Huddle’ moves forward

The Pudgy Penguins now want to begin a new chapter, as the Netz leadership team assumes control.

“I’m extremely optimistic and confident in Luca and the team he’s assembled,” Twitter user ActuallyAgents the new regime will keep a leader position for.

“Aside from their great business track record, the philosophy of compassion and inclusivity he wants to bring to the penguins is something the space really needs.”

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