The Pudgy Penguins collection is made up of an adorable and vibrant community that combines the charm of these beloved flightless birds with the power of blockchain technology. Pudgy Penguins have captured the hearts of collectors across the world. Let’s delve into the story of how they transformed from rags to riches.
Fall From Grace
Born in July of 2021, Pudgy Penguins are a collection of 8,888 NFTs. These penguins represent love, empathy, and compassion for all people. The Pudgy Penguins were a very successful collection in its early stages, as it was considered a “blue chip” by most standards. There was a considerable amount of hype because who doesn’t love an adorable penguin? But trouble started to brew within the community.
Hefty promises were made based off of an insane hype cycle in NFTs. These unfulfilled promises left a rift of epic proportions between Pudgy holders and the founding team. Eventually, a pattern of questionable ethics caused the original founders of Pudgy’s to be pushed out by the community. The controversies only made the community stronger, as one specific leader rose to the top. Enter Luca Netz.
Luca Netz to the Rescue
Frustrated holders and a lack of inspirational leadership led to the Pudgy Penguins being in disarray. The community pushed out the unfit leadership and the void was filled by a man with an impressive background. So let’s talk about Luca.
Who is Luca?
On dGEN’s morning show, Coffee with Captain (hosted by Chris and Steve), we had the opportunity to speak with Luca about his background. He has an extensive background in entrepreneurship, despite having to drop out of high school to help his mom support the family. He spoke of being “essentially homeless” and sleeping in living rooms. So what changed?
Netz got his start with a tech startup known as “Ring”. “I basically watched that company grow from nothing, to him barely being able to pay the bills,” Netz said. This startup would eventually be acquired by Amazon for $1 billion dollars! Yes, that same Ring doorbell you see everywhere. He would go on to be involved with multiple startups, eventually becoming “more financially free than I could ever imagine”. Not only did Netz gain invaluable business experience through his ventures, but he also became well capitalized to explore interests of his own.
The Pudgy Purchase
Luca was a collector of physical goods, art, and collectibles even before he was in NFTs. When he started to trade NFTs, he was drawn in like many of us in the NFT space today. “My first PFP actually that I ever purchased was a Pudgy Penguin,” said Netz. The reason he chose the Pudgys was because of the narrative of the PFP (picture for proof) as a digital identity. His thesis was that the PFP with the broadest stroke of appeal would have the highest upside.
“I [was] looking for the most universal IP and to me Pudgy Penguins is that.” As time went on, Netz became frustrated with how the project was being run and said, “I can keep complaining about it or I can step up to the plate and fix it myself.”
In April of 2022, Luca Netz purchased the Pudgy Penguins collection for 750 ETH (approximately $2.5 million). This event in and of itself led to an increase in sales and floor price. The Pudgys rose from the depths of sub 1 ETH to the above 3 ETH. The collection would cool back off in June of 2022, following the month after Terra’s collapse, with some purchases reaching the sub 1 ETH level. However, to enter Pudgy’s main collection today is a far cry from those sub 1 ETH levels back in June.
Currently there are three collections within the Pudgy Ecosystem. The first collection is of course the 8,888 OG Pudgy Penguins, sometimes called big Pudgys. The second collection is a much larger collection of 21,100 called Lil Pudgys. It’s important to note there is no difference between the two as far as utility, but Lil Pudgys just aren’t the first edition.
The third collection was somewhat of a meme called Pudgy Rods. In fact Luca said, “Rods at the core are one of the greatest memes on the blockchain.” Beyond that he has positioned them for long term benefit with Pudgy or Lil Pudgys. So if you plan on being a long term holder, it’s probably a good idea to grab a Pudgy Rod paired with your penguin.
Content creation and social media marketing are crucial in brand development. Especially when a lot of brands are competing for attention. The Pudgys have invaded content in a variety of ways. Stepping outside of Twitter, Pudgys have a presence on both Instagram, TikTok, and a fun website. This gives the brand access to a much wider audience.
In addition to popping socials, the Pudgy GIF game is elite. There have been multiple stories of NFT users seeing their non-NFT friends use a Pudgy GIF simply because it’s cute. This fits perfectly with the brand’s ethos of spreading positivity and joy to as many people as possible.
Intellectual Property Building
Luca is not shy when talking about the strength of the Pudgy intellectual property (IP). It’s why he bought Pudgy Penguins in the first place. In fact he stated:
“Cute IP has the highest addressable market. It’s the thing that people gravitate to the most. It’s not an opinion, it’s a fact and Pudgy Penguins is the number one cute IP on the blockchain. And we want to bring people into the space. Rather than educating them through info products and trying to get me on as many podiums as possible, I want them to get into an interactive, sticky experience that makes them fall in love with the character, that makes them fall in love with the brand, and ultimately that’s what we’re building Pudgy World to be.”
That’s a bold statement, but it shows he has conviction. Tapping into IP is something very few brands have had wide scale success with. In fact, Pudgys have been diligently working on licensing deals for their holders. One of the core problems for Pudgy holders, and the NFT space in general, was fearing that Pudgy’s scaling wouldn’t provide any benefit to their NFT.
In July of 2022, the project started accepting licensing applications from NFT holders for the recent toy drop on May 18th, 2023. “Licensing is the lowest hanging fruit, in terms of utility, in the entire space,” said Netz. The only issue was it took about a month to license the 16 NFTs from holders, so doing this at scale would be very difficult. What could be the solution?
Luca believes mass licensing can be achieved through content production. The initiative to solve mass licensing is called Project Overpass and it’s coming very soon! What will that look like percentage wise for holders? That is still to be determined. Netz did say, “At a minimum I can say it’s more than the .5% that 99% of NFT holders pay when they trade the NFT. As long as we can beat that, I feel like it’s a good deal.”
Pudgy Toys & Merchandise
On May 18th, the Pudgy Penguins Twitter shared a video highlighting the highly anticipated toy drop. Releasing Pudgy Toys was one of Luca’s main initiatives, which they accomplished with the help of toy manufacturing company, PMI Toys. Pudgy Penguins made a massive splash on Amazon, selling over $500,000 worth of physical toys over the first few days.
Why create a toy? Each Pudgy Toy comes with a digital experience linked to Pudgy World, which includes a birth certificate that unlocks a unique trait box from season 1 of Pudgy World. Not only does this softly introduce the masses to web3, but it provides an alternative source of revenue for the company.
More importantly, Luca wants the Pudgy Toys to be above the rest stating, “When you buy a Pudgy Penguin for $20 vs buying another toy for $20, I would argue you get more out of your $20 Pudgy Penguin than the toy next to it.” Though there have been some manufacturing and/or delivery issues, the Pudgy Toys launch is widely considered a success and win for the web3 space.
Let’s not forget that the Pudgys also have their own merchandise. There are hoodies, glasses, prints, and more than can be discovered here. Holders can even utilize their Pudgy Penguin or Lil Pudgys on the items! With a variety of styles and messaging, there is something for everyone.
One of the key pain points with NFTs is revenue. Initially, one of the biggest sources of revenue (outside of mint funds) for projects were royalty payments. Project royalties have drastically decreased since 2022, so new sources of income must be developed for companies wanting to exist long term.
“The problem in the NFT space today is monetary gains are accrued through ponzinomics. Through imaginary things created out of thin air and overspeculation. If we want NFTs to win, this can not be the driving factor for monetary gain.”Luca Netz, CEO of Pudgy Penguins
Increasing supply without appropriate demand has been the biggest killer of all NFT projects. Pudgys have succeeded in increasing revenue without increasing supply, a feat the majority of NFT projects have failed at. Let’s not forget the company also just closed a $9 million dollar seed round, led by 1kx.
Building Community Igloos
Community is an overused term within the NFT space, but the Pudgy’s have always embodied community at the heart of their brand. Over time, more penguin lovers have joined, providing a more diversified community. This led to the creation of clubs formed around different passions and interests. Some of the more active clubs include Pengu Princesses, Pudgy Gaming, and Pudgy Fitness. There are even clubs based upon various regions. Any Pudgy can find a club here.
Even if you aren’t in a specific club, there are many community-led events posted to a calendar and on various social media platforms. Holders of Pudgy Penguins, Lil Pudgys, and Pudgy Rods can create events on a decentralized calendar. This is a perfect way to stay informed on Pudgy’s as a member with so many events throughout the web3 space.
Long Live Pudgy Penguins
Why do the Pudgy community have so much love for Luca? He listens, he’s done everything he said he would, and there’s a mutual respect between CEO and community. When holders message him, he responds to the best of his ability. The company holds biweekly meetings with the community to keep everyone up to date. Luca was even seen personally connecting with Pudgy Asia on a Twitter space because he wants to make sure they’re in the loop.
One of the biggest failures Luca has seen from leadership has been due to massive egos and he actively fights against that. No doubt his humble beginnings help play a major role in his ability to relate with holders.
There’s really only one question left. Who isn’t rooting for Luca and the Pudgy Penguins after seeing what they’re trying to build? This project personifies web3 and leans into the ethos, not tries to rearrange it. Plan for Pudgy Penguins to be around for a long, long time.