#348: Pudgy Penguins Announces $PENGU
š§ What happens when a leading NFT project launches a token
Last week during Art Basel the Pudgy Penguins team announced that they will be launching a token, PENGU.
I'll admit, I got chills watching this video, forcing my wife to watch it with me on our TV (she enjoyed itā¦I think?). Partially because Iām biased as I have a Pudgy Penguin, but also because there hasnāt been a top NFT project that dropped a token since APE from Yuga/Bored Ape Yacht Club back in March 2022 and the fact that Iāve been documenting their various efforts milestones including their GIF strategy, retail push, and transition from a mere digital pfp and collectible to an airdrop magnet.
What makes the PENGU token interesting?
Short lead time
Although rumors of a Pudgy Penguin token have floated around for years, the official announcement came on December 5th with the note that PENGU will be launching in 2024. Considering Iām writing this on December 10th and the token hasnāt launched yet, it will be at some point in the next 3 weeks.
Typically, airdrops tied to an asset or ecosystem have a significant amount of lead time (months or years), have strong hints at an eventual token launch, or announce a snapshot for qualified airdrop recipients. That wasnāt the case here.
As a result, the floor price of a Pudgy rose from ~16 ETH ($61k) to ~23 ETH ($83k) and Lil Pudgies (the second collection) went from ~1.7 ($6.5k) ETH to ~2.5 ETH ($9k) so far.
Positioning of the token
Is it a PENGU a memecoin, a utility token, or a culture coin?
It seems like itās a combination of all the above, and possibly more over time. For now, it is described as the āofficial coin of the Pudgy Penguinsā for a NFT collection that is positioning itself as āthe face of cryptoā.
Although claiming yourself as the face of crypto is obviously subjective, the Pudgy Penguins can back that statement up pretty well:
34B GIF views, at this point all of us have seen a Pudgy GIF before
1.6M Instagram followers, with cute and relatable content
522k Tiktok followers on the main account and 1.1M followers on the Pudgy Kindness account (will get to that later)
1.5 million Pudgy toys sold globally across retailers like Walmart, Target, and Amazon
For those outside of crypto, PENGU is a way for Pudgy Penguin fans to align themselves with the characters, brand, and IP in a way that wasnāt possible before that goes beyond purchasing toys or engaging with content.
This aligns well with my last post, describing crypto as a better version of stocks. In some ways, holding PENGU token is a way to become an owner or stakeholder in the Pudgy Penguins brand, just as buying a share in a company does the same.
For some itās an investment, for others itās a way to express fandom, or a combination of the two and more. On top of that, there may be more ways to utilize the token with future integrations or use cases as the brand grows.
Why Solana?
One point of confusion and early criticism about the PENGU token launch was that it would initially launch on Solana. Considering that Pudgy Penguins are on Ethereum and the parent company The Igloo, Inc. will be launching its own Ethereum layer 2 blockchain Abstract soon, why Solana?!
When it comes to distribution, the approach is prudent. During the Inner Igloo (a bi-weekly call for Pudgy NFT holders and during special occasions like this one), Luca shared the teamās thought process:
The Solana ecosystem hasnāt been exposed to the Pudgy ecosystem, so this is a great way to cross-pollinate and acquire more PENGU users/holders
Solana is known for memecoin trading, so a token like PENGU will likely be well-received
If timing worked out, PENGU would likely have launched on Abstract, but the blockchain isnāt ready for primetime yet and the token shouldnāt be a reason to rush the launch. There will be options to bridge PENGU to Abstract (and other chains?) in the future.
Tokenomics
When I think of the term ātokenomicsā, I typically imagine a 20-page whitepaper and a chart that looks something like this:
Pudgy Penguins shared their tokenomics in a refreshing and cute way that only they could do. Nothing wrong with the former and standard pie chart approach (and most should visualize their tokenomics in that fashion). Itās just that Pudgies are able to lean into their strengths and take a different visual direction because it complements their approach.
PENGU supply will be 88,888,888,888 (88.9 billion), which is a nod to the original collection of 8,888 Pudgies, along with a claim period of 88 days.
Two segments from the tokenomics stick out to me:
Other Communities
The other communities segment will receive ~24% of the PENGU, which rivals the ~26% that will be allocated to the Pudgy ecosystem holder community. This seems unfair at first glance, but the Pudgy community distribution will be across ~15k wallets, while the other communities distribution will be split across ~5M wallets.
This stands in contrast against 6th Man Venturesā analysis around token design and distribution, finding that widespread airdrops tend to perform poorly compared to those that focus on core users.
I would argue that PENGU may be an exception (bag bias alert šØ lol) noting that:
PENGU is positioned more as a memecoin or culture coin, compared to the tokens in the analysis which were mainly infra or defi
The analysis was published in May 2024 and looks at a basket of tokens that launched from late 2020 to late 2023. The landscape has shifted considerably in a market that is trending upwards and a friendlier regulatory environment.
Almost none of the tokens in the analysis (with the exception of APE), had a mainstream consumer audience
For these reasons, PENGU warrants a different lens for analysis and may buck that trend.
Although none of the āother communitiesā have been announced (and probably wonāt be until launch), speculation and hints have appeared. For example, two products with large mainstream reach have changed their PFPs: Phantom and Moonshot.
Both apps posted a branded Pudgy on Saturday morning within 8 minutes of each other. Coincidence? I think not š¤Ø
If Pudgy Penguins wants to become the face of crypto, exposure to the Phantom and Moonshot user base would certainly make sense.
Another set of communities that could be recipients of the PENGU airdrop would be those that have given airdrops or perks to the Pudgy community. Dozens of projects and ecosystems have shown love to the Pudgy community over the years, and PENGU may be a way to return the favor.
The last nugget related to token distribution that Luca mentioned during the Inner Igloo is that Pudgy Toy purchasers who scanned their toys and signed up for Pudgy World will also receive PENGU as another way to onboard a new audience and bring them onchain.
Public Good
The segment that piqued my interest the most was āPublic Goodā, which will receive 4% of the token supply.
When it comes to mainstream perceptions, crypto/web3 are still generally viewed as a mix of gambling, imaginary money, scams, and just plain confusing. It takes a mix of curiosity, patience, and openness to understand that crypto/web3 goes beyond those negative perceptions and is a lot of good things as well.
And one of those good things is the charity, which Pudgy Penguins is doing in their own way.
Going back to the Pudgy Kindness Tiktok account which has amassed 1.1M followers with only 11 videos. The account highlights the different content creators and their respective stories. For example, Bill from Fishing With āOh Dad!ā went from 1.3k subscribers to 1.5M thanks to a heartwarming Pudgy Kindess video that went viral 3 weeks ago.
With a token in play, efforts like Pudgy Kindness will kick it up a notch and Iām excited to see how it expands.
This type of effort doesnāt get the recognition it deserves because it doesnāt directly or immediately increase the token price or pump our bags. Instead, itās a longterm play that brings goodwill and has the potential to change perceptions about crypto, especially when itās coming from the face of crypto in the form of a cute fat flightless bird š§
Other Notes
Additional allocation for contributors and loyal members
The team will be allocating additional PENGU to community members who have SBTs (soulbound non-transferrable tokens) that are a way to recognize their contributions:
Pengu Influencer: spread Pudgy culture on social media
Lil Pudgy Big Impact: High impact Lil Pudgy holders
Safety Pin: Practicing safe wallet habits
Toy Enjoyer: Promoted Pudgy Toys on Youtube during the toys launch
1,000 Day Pengus Club: Held Pudgy for 1,000+ days
truePengu Ice: Pudgy holders who have a matching ID set of Big, Lil, and Rog, likely indicating you held the whole time
The SBTs themselves serve as a badge of honor, and now double as a bonus for token allocation.
CoinDeskās Most Influential 2024 Pudgified
Earlier today, CoinDesk released their Most Influential 2024 list of 50 people who defined the year in crypto with one twist.
The profile pictures on the list were all Pudgy Penguins. I have no idea how this came to be, but it happened and is another good example of the penguins winning mindshare ahead of the airdrop.
Expanding Cultural, Symbolic, Social, and Economic Capital
During Art Basel, Threadguy interviewed Luca on a livestream and he shared that "By the end of the year, the top NFT projects will all have coins.ā
Yat Siu, founder of Animoca Brands, expands on this by illustrating the lifecycle of NFTs and memecoins/tokens.
Communities can start on one side or the other, and the most successful eventually will expand into the side.
This point also agrees with the observation I shared last week regarding art as memecoins. Some start as a memecoin centered around an artist and their body of work, eventually expanding into NFTs, such as FWOG. Others start from the digital art side, and eventually expand into a memecoin, such as BOME.
With NFTs Yuga was a trailblazer, airdropping the APE to NFT holders in 2022, and the token is now a core part of ApeChain in addition to governance functions. With PENGU, weāre seeing a different flavor of this happen again and more communities will follow suit (Azuki and ANIME immediately come to mind).
Although some details on PENGU are sparse, weāre seeing a different type of playbook roll out that will become a source of inspiration for consumer crypto brands looking to appeal to both native and mainstream audiences.
For now, weāll have to sit back and enjoy the show.
See you Thursday!
