Web3's Most Successful CTO: Pudgy's Community Rescue

A few days ago, I tweeted about preparing to buy a Pudgy Penguin NFT. Many friends asked why. Isn't the NFT hype long over? Why spend so much money on one now?

Most Chinese-speaking users probably first heard of Pudgy Penguins because of the $PENGU airdrop in 2024. That airdrop was incredibly generous, you could even call it a "universal distribution." Even if you didn't hold a Pudgy Penguin NFT, just being an early trader on Solana might have netted you hundreds of dollars worth of $PENGU.

What was truly astounding, however, was for the Pudgy Penguin NFT holders themselves. Just before the airdrop, the NFT floor price skyrocketed to over 30 ETH. Each Pudgy Penguin NFT could claim roughly 1.7 million tokens, and each Lil Pudgy about 188,000 tokens. At the token price then, one large penguin corresponded to tens of thousands of dollars, peaking at over $100,000. A single Lil Pudgy was worth over $10,000 at its peak. For on-chain veterans like @wenxue600, who held many, calculating by their holdings, receiving a multi-million dollar airdrop wasn't an exaggeration.

But most people who received the airdrop didn't know the story behind it.

$PENGU isn't just a Meme Token that appeared out of nowhere. The Pudgy Penguins behind it once nearly perished during the craziest era of NFTs.

In 2022, the Pudgy Penguins floor price once dropped to about 0.5 ETH, and the community even voted to oust the founders. Four years later, it's in 3,100 Walmart stores across the US, collaborated with Manchester City and the NHL, launched a payment card connected to the Visa network, and set a 2026 revenue target of $120 million.

This might be the most incredible comeback story in Web3.

So, how did Pudgy Penguins survive? The story begins in 2021, when 8,888 Pudgy Penguins were minted at 0.03 ETH, selling out in less than 20 minutes. Less than a month after launch, The New York Times published a feature on it. Back then, almost no one doubted it would become the next blue-chip NFT.

But what truly made Pudgy special wasn't how it took off, but how it later crashed and then managed to climb back up.

By the end of 2021, the promised games, tokens, and ecosystem had yet to materialize. The "Mystery Egg" event ended up revealing fishing rods, which led the community to dub them "Rogs," sarcastically implying the project was a rug pull.

The more serious issue was a crisis of trust. The original team was accused of draining the treasury and trying to sell the project before exiting. By January 2022, holders initiated a vote on Discord demanding the removal of founder Cole. For the first time, an NFT community voted out its founder, acting like shareholders.

But removing the founder didn't guarantee the project's survival. At its lowest, the Pudgy floor price dropped to around 0.5 ETH. The community was fractured, the treasury was nearly empty, and some holders were even using Wrapped Penguins to bypass the original team's royalties. The penguin wasn't just "facing difficulties"; it was on the brink of extinction.

The turning point came in April 2022 when @LucaNetz purchased the IP and operational rights of Pudgy Penguins for 750 ETH (roughly $2.5 million at the time). This transaction is often hailed as Web3's most successful CTO (Community Takeover).

But the reality after taking over wasn't a fairy tale; in fact, it was quite brutal. Luca later recalled that when the team took over, the treasury was nearly empty. Then the NFT bubble burst: trading volume plummeted 95%, ETH dropped about 80%, and the royalty model collapsed. At its most difficult point, 80% of the team members went without salaries for 11 consecutive months.

Pudgy's turnaround wasn't simply about changing management and boosting the NFT floor price. What they did right was stop treating the NFT price as the product and instead started treating the character behind the NFT as a genuine consumer IP.

In 2023, Pudgy Toys began appearing on Amazon and Walmart's marketplace. Within a year, the products were stocked in 3,100 Walmart stores across the US. Each toy includes a QR code that guides ordinary consumers (who might know nothing about wallets or NFTs) into the Pudgy World. Interestingly, these physical toys feature penguin designs owned by community holders, and qualified NFT holders can earn IP licensing royalties.

In other words, NFT holders weren't just buying a picture; they could participate in the creation and distribution of brand value. This was the crucial step Pudgy took from OpenSea to Walmart.

Looking at 2026, Pudgy's roadmap looks less and less like a traditional NFT project:

• Partnered with the NHL to host an offline event at the 2026 Winter Classic.
• Launched co-branded collectibles and merchandise with Manchester City, expanding after an initial collaboration.
• Launched the Pengu Card, connected to the Visa payment network, supporting Apple Pay and Google Pay, covering approximately 150 million merchants globally. The virtual card quickly garnered 100,000 registrations.
• Launched the free web game Pudgy World, giving a real use case to the digital content unlocked by scanning the QR code on physical toys.
• The Vibes TCG (Trading Card Game) has sold over 4 million cards cumulative.

The CEO set a 2026 revenue target of $120 million and has publicly expressed a desire to push for the company's IPO before 2027. Looking at the entire roadmap, the strategy is clear. NFTs provided the first holders and evangelists. Toys brought the brand into ordinary homes. Social media and Memes ensured continuous spread of the penguin image. Games, cards, and payment products constantly added use cases. $PENGU lowered the barrier to entry from an expensive NFT to a much larger internet community.

The reason the NFT bubble burst is that most NFT projects ultimately died trying to answer "what to do after selling the pictures." Pudgy almost died there too, but it survived. It stopped relying on the next wave of buyers at higher prices and started answering a more important question: Can this penguin become a brand that people genuinely like, buy from, and use?

So, I want to buy a Pudgy Penguin NFT, not just because its price has gone up recently. Back then, even though I didn't hold the NFT, just by being an active user on the Solana chain, I also received thousands of dollars worth of $PENGU airdrop. Now, buying a NFT as a souvenir, treating it as a membership credential for this IP and community, seems like a good choice to me.

Recently, I also noticed that the Chinese Pudgy Penguins community @PudgyChina is being restarted. When the market is booming, everyone talks about prices. It is during a bear market that it's more suitable for seriously building a community. If you are interested, you can also follow: @PudgyChina @pudgypenguins @LucaNetz