A Cruel Winter. What Is Going On With Pudgy Penguins?

What is Pudgy Penguins NFT Collection?

Launched in July 2021, Pudgy Penguin is a series of 8,888 unique collectible penguins created as an ERC-721 standard token with proof of ownership stored on the Ethereum blockchain. The collection’s items were minted for 0.03 ETH each and sold out in less than 20 minutes, according to the project’s website.

Pudgy Penguins has burst in popularity since its debut, garnering more than 45,400 ETH (worth around $150 million) in sales on the leading NFT marketplace OpenSea. The project has also gained good publicity, being featured on prominent outlets including the New York Times, CNBC, and Bloomberg.

Further, in September 2021, the project even claimed that NBA star Stephen Curry, also known as Golden State Warrior and the greatest shooter in NBA history, has acquired a Pudgy Penguin.

Pudgy Penguin owners are revolting against the project’s founding team, dubbed 309Labs, which allegedly consists of four young, college students. The dissatisfied owners say the team has failed to deliver on its promises while accusing it of draining the project’s funds.

Twitter user @9x9x9eth, who claims to have spent nearly 600 ETH (around $2 million) on the collection and holds 242 Pudgy Penguins NFTs, first brought up the issue via a Twitter thread. There, he revealed that he had been initially offered 20% equity in the project for 4,000 ETH, which he rejected.

He added that more recently the Pudgy Penguins founder team returned to him and offered the entire project for 888 ETH. He said:

“Then I learned all ETH has been split, the company they want to sell have 0 ETH/USD in it and even they did 2 fundraising with NFT and promise of games/development, it’s all empty. They might invest some of the royalty back to hire some mods? tbh idk what is their plan?”

He further detailed that the project’s co-founder Cole Thereum, “promised a game, a token, an educational book on NFTs and more” to the community last September. “After a half year, they still have not yet set up the team, they are still in the stage of hiring,” he added.

Even before this big revelation, many users and community members had taken to Twitter to reveal their dissatisfaction. They particularly complained about the founder team’s reluctance to address concerns and a lack of transparency – all of which strengthened the perceived failure of the founders.

Meanwhile, in order to cut the funding team from earning a percentage in royalties from each NFT sale, Pudgy Penguin owners have started to wrap their NFTs. Called Wrapped Penguins, they are available as a free mint on Metadrop for current Penguin holders and would cut off all ties with the original founding team. As of January 10, nearly 5% of the supply had already been wrapped.

Buyout Offers to Pile Up

Notably, a number of NFT influencers have put forward buyout offers, agreeing to buy the project “as is.” For one, Mintable’s founder Zach Burks has offered to acquire the entire project for 750 ETH. Burks even promised to use Mintable’s extensive resources to rebuild the NFT project. He said:

“Mintable has a series of super super strong investors and connections, go do a quick google. Our thoughts on expanding Penguins into something massive: – Get pudgy a licensing deal with games, we have connections with extremely large multi-billion dollar game studios in Asia.”

There are also other interested investors in the NFT project. Last week, Luca Netz of Netz Capital claimed in a Twitter spaces event that his team was close to striking a deal to buy the project for 750 ETH. However, Pudgy Penguin’s founding team has not yet officially responded to these buyout offers.

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