NFTs are not merely speculative tools, but IP assets that can create actual commercial value.

Written by: c4lvin, Four Pillars

Translated by: Saoirse, Foresight News

Editor’s Note: As a typical example of the transition from speculative attributes to tangible business in the Web3 field, this article systematically presents the complete evolution of Pudgy Penguins (this NFT project) from the crisis of founder turnover to the construction of a global IP ecosystem. It deeply analyzes the strategic restructuring path after Luca Netz's acquisition, covering core development nodes such as breakthroughs in physical toy commercialization, the establishment of the PENGU token economic system, and compliance exploration in traditional financial markets. Through a composite model of "NFT asset confirmation + brand IP operation + blockchain technology infrastructure," it reveals the innovative paradigm of digital asset commercialization.

The following is the translated content, with appropriate reductions and adjustments based on the original text.

Core Summary

• After experiencing a founder dismissal crisis in 2022, Pudgy Penguins underwent a significant transformation under Luca Netz's acquisition, gaining brand influence through social media strategies and collaborations, and successfully expanding into the physical toy business.

• Pudgy Penguins subsequently issued the PENGU token, becoming the fourth largest cryptocurrency by market capitalization globally and the largest meme coin issued in the past three years; it expanded into comprehensive entertainment IP through games and children's content such as "Pengu Clash" and "Pudgy Party," and accelerated globalization through collaborations with Asian companies like Lotte and LINE FRIENDS.

• Pudgy Penguins became the first NFT project to enter the traditional financial market, applying for a mixed ETF of NFTs and tokens through Canary Capital, with plans to initiate an IPO soon; it continuously proves that NFTs can create actual commercial value as IP assets, rather than being mere speculative tools, and is committed to achieving large-scale applications in Web3.

Pudgy Penguins NFT: Origins and Early Development

Project Launch and the "Great Blizzard" Crisis

Source: The New York Times

In July 2021, the NFT series "Pudgy Penguins," created by four college students including Cole Villemain, was officially launched. 8,888 unique generated Pudgy Penguins NFTs sold out in 19 minutes at a price of 0.03 ETH each, attracting celebrity purchases and gaining attention from mainstream media such as The New York Times.

In December 2021, Pudgy Penguins launched the Lil Pudgys series, which included 22,222 "Little Penguins," distributing one for free to each Pudgy Penguins NFT holder, with the remaining 13,334 successfully sold, further expanding the community size.

However, hidden dangers began to emerge behind the initial prosperity of the project: the original team had promised to launch video games, NFT educational books, and a "mystery egg" incubated for Christmas 2021, but most were unfulfilled. The ultimately hatched "fishing rod NFT" was mislabelled as "Rogs" (it should have been "Rods"), disappointing holders who were looking forward to new penguin characters, leading to an outburst of community dissatisfaction. In January 2022, the community voted to dismiss the founder, marking this period as the darkest "Great Blizzard" in the project's history.

Luca Netz Takes Over

In April 2022, the floor price of Pudgy Penguins NFTs fell below 1 ETH, and the community was on the verge of dissolution. Serial entrepreneur Luca Netz, who had accumulated wealth through various businesses, proposed a buyout. Before the acquisition, Luca had already achieved a net profit of $6 million in five months through the Pudgy Penguins IP, ultimately acquiring the project for $2.5 million.

Source: EO Youtube

Luca Netz's growth and entrepreneurial background are unique: he faced a difficult childhood, moving over 30 times with his single mother in nine years, dropping out of school at 16 to work, with his first job packing products at the then 25-employee startup Ring Doorbell. Within two years, Ring Doorbell expanded to over 500 employees and was later acquired by Amazon for $1 billion, allowing Luca to witness the complete business development cycle for the first time.

Afterward, Luca ventured into online brokerage sales and achieved success through a model of "importing goods from China for distribution in the U.S.," selling his first company to a competitor at the age of 19 and becoming a millionaire. In 2019, he founded a venture capital firm, Netz Capital, leveraging his Instagram marketing experience; in 2020, he joined the clothing brand Von Dutch and helped revitalize it, later serving as Chief Marketing Officer for toy company Gel Blaster, achieving $100 million in revenue within 14 months. With his experience as a serial entrepreneur, Luca pushed the struggling Pudgy Penguins to restart.

Recovery Begins

After the acquisition, Luca Netz and his team quickly advanced the restructuring of the business and community:

• Business Level: They recruited industry advisors covering both Web2 and Web3 fields to promote project planning; in July 2022, they collaborated with major toy distributor PMI Toys to launch Pudgy Penguins IP dolls and figurines, creating a Web3 IP business model—using NFT holders' IP authorization to share a portion of physical toy sales revenue with holders, enhancing community cohesion.

• Brand Communication: Immediately after the acquisition, they uploaded Pudgy Penguins GIFs to GIPHY on a large scale, creating short character videos through the Instagram account. Within six months, the total views of GIFs exceeded 1 billion, and Instagram followers surpassed 100,000, establishing initial brand awareness.

• Industry Collaboration: In November 2022, they collaborated with Sotheby’s, the world's largest auction house, to auction 10 Pudgy Penguins NFTs, issuing soulbound tokens (SBT) to buyers. This collaboration marked Sotheby’s first foray into the crypto space, with auction items including NFTs from former founder Cole Villemain, enhancing public attention on Pudgy Penguins and becoming a landmark event for the community.

Source: Sotheby’s

Physical Products and Brand Collaborations: Opening Market Breakthroughs

Building Brand Influence

One of Pudgy Penguins' core strategies for upgrading from an NFT project to a global IP is to strengthen brand power through social media and penetration into the Web2 industry:

Social Media Communication

Luca Netz integrated his past business experience into Pudgy Penguins' social media strategy: after the acquisition in April 2022, the team uploaded Pudgy Penguins GIFs on GIPHY on a large scale, achieving over 1 billion views within six months, with even non-NFT holders starting to use the GIFs in daily communication; Instagram short video content attracted Gen Z and millennials, with followers surpassing 100,000 within six months post-acquisition, and expected to exceed 1 million by the end of 2024, with high sharing rates further expanding brand exposure.

Penetrating the Web2 IP Industry

To promote brand mainstreaming, Pudgy Penguins actively participated in Web2 IP industry events, positioning itself as "content that can participate in licensing and pop culture competition," rather than merely a digital asset:

• In June 2023, they appeared at the "Licensing Expo 2023" in Las Vegas—this expo is the largest licensing industry event globally, with top IPs like Disney and Pokémon participating. Pudgy Penguins presented NFT IP as licensable content for the first time, establishing connections with Web2 companies.

• In July 2023, they set up a booth at the largest pop culture event in the U.S., the "San Diego Comic-Con" (SDCC 2023), becoming the first Web3 brand with an official booth. This event attracts over 100,000 attendees annually, and this appearance not only provided brand exposure but also marked the penetration of Web3 innovation into the traditional entertainment industry.

With its cute character design and community-oriented philosophy, Pudgy Penguins aligns well with the mass appeal of Web2, breaking through IP licensing barriers through the aforementioned events, laying the foundation for subsequent brand collaborations, and gradually stepping out of the limitations of Web3 to integrate into the Web2 ecosystem.

Brand Collaboration Layout

Source: Pudgy Penguins

Pudgy Penguins' brand collaborations exhibit systematic expansion:

• Toys and Retail: In July 2022, a partnership with toy manufacturer PMI laid the foundation for physical toy production; in February 2023, a distribution collaboration with retail company Retail Monster established a global toy sales network, with products entering major chain supermarkets like Walmart and Target, becoming a typical case of an NFT project expanding into the physical economy.

• Food Industry: In November 2022, a collaboration with Kellogg launched cereal packaging, making it the first NFT project to partner with a mass consumer brand; in 2024, a limited edition Pudgy Penguins cookie was co-launched with high-end cookie brand Last Crumb, targeting both young consumers and the premium market.

• Technology and Digital: In early 2023, a partnership with Hologram Labs developed 3D modeling and AR/VR content for Pudgy Penguins characters, laying the groundwork for the metaverse; in February 2024, a collaboration with Unstoppable Domains launched the ".pudgy" domain service, supporting community members in building websites, sending and receiving cryptocurrency in the Web3 ecosystem, and establishing digital identities.

• Fashion and Lifestyle: In early 2024, a collaboration with high-end phone case brand Velvet Caviar launched Pudgy Penguins designed phone cases, expanding IP reach through everyday accessories and further positioning as a trendy lifestyle brand.

• Entertainment Industry: In June 2023, a partnership with Hollywood's major talent agency WME opened up expansion possibilities in film, television, music, and other multimedia fields, pushing the brand beyond NFT boundaries towards a global comprehensive IP transformation.

Success of the Physical Toy Business

When Luca Netz acquired Pudgy Penguins in mid-2022, the crypto market was facing a crisis: the Terra Luna incident triggered a market crash, NFT trading volume dropped by 95%, the royalty system failed, and Ethereum's price fell by 80%. Luca had to invest additional funds from his own pocket, exceeding the initial acquisition price. However, against this backdrop, Pudgy Penguins' brand power drove an explosion in the physical toy business:

Source: @ST_McFly

In May 2023, the "Pudgy Toys," developed based on community authorization, launched on Amazon, achieving over $500,000 in sales during the first weekend, with sales exceeding 1 million units and revenue surpassing $10 million within 12 months, ranking first in multiple categories on Amazon; in September 2023, the toys entered 2,000 stores of one of the largest retailers in the U.S., Walmart, and were rated as "Best Summer Toy of 2023" by Toy Insider.

In February 2024, the collaboration with Walmart further expanded, adding 1,100 stores, covering 3,100 Walmart locations nationwide, and simultaneously launching Walmart-exclusive products—five collectible figurines and 25 "Lil Pudgy Mystery Igloos."

Subsequently, Pudgy Toys continued to expand retail channels: in October 2023, they entered the UK toy retailer Smyths; in May 2024, they entered Target stores in the U.S. and Australia's largest supermarket chain, Big W; in June 2025, they entered 2,000 Walgreens pharmacies; and in February 2025, they partnered with Basic Fun to introduce products to amusement parks across the U.S.

A notable feature of Pudgy Toys is that they naturally guide buyers into the Web3 environment: each toy comes with a QR code that, when scanned, unlocks character traits and collectibles in the zkSync-driven online open-world game "Pudgy World." Users can play or customize penguin characters in this game. As of January 2025, about 20% of toy buyers entered the on-chain environment through "Pudgy World," with over 160,000 users. To date, over 10,000 stores worldwide have sold more than 10 million Pudgy Toys.

The success of the physical toy business has provided Pudgy Penguins with stable revenue, laying the foundation for future development.

Expansion Signals: PENGU Token Issuance and Abstract Mainnet Launch

PENGU Token Issuance

On December 17, 2024, Pudgy Penguins announced the issuance of the official token PENGU, with the core goal of breaking through the existing community size limitations and building a "global community of billions."

Over the past three years, Pudgy Penguins has achieved significant results in the Web2 space: over 50 billion social media exposures, 1.5 million toys sold in over 10,000 stores worldwide, and millions of social media followers. However, due to the limited supply of 8,888 NFTs and 22,222 Lil Pudgys, community expansion faced bottlenecks. The issuance of PENGU aims to break this limitation, creating a "social currency" that allows more people to recognize and participate in the development of Pudgy Penguins.

Although Pudgy Penguins is an Ethereum-based NFT project, the team decided to issue PENGU on the Solana chain to reach more users.

Source: Pudgy Penguins

The token distribution of PENGU focuses on "expanding ecological participation": with a total supply of 88.88 billion tokens, 25.9% (approximately 23 billion tokens) are allocated to the community. Based on the market value at the time, this airdrop scale reached $1.5 billion, making it one of the largest airdrops in crypto history.

Notably, about 24% of the total airdrop was allocated to on-chain ecological contributors not directly associated with Pudgy Penguins, including active on-chain users from Ethereum and Solana, mainstream NFT project holders, and the broader crypto community. Ultimately, over 6 million wallets became eligible to claim PENGU, resulting in a breakthrough expansion of the community size.

After PENGU officially launched on December 17, 2024, the market reacted strongly: the initial market cap was $2.5 billion, peaking at $3.5 billion; within a week, there were over 500,000 on-chain holders; within a month of launch, it became the fourth largest meme coin globally, following DOGE, SHIB, and PEPE, and the highest market cap meme coin issued in the past three years.

Source: Pudgy Penguins

PENGU was listed on exchanges worldwide, lowering the investment threshold.

Abstract Mainnet Launch

Source: Pudgy Penguins

While preparing for the issuance of PENGU, the Pudgy Penguins team launched a new initiative—developing the Ethereum Layer 2 chain "Abstract," aimed at addressing user experience pain points in existing blockchains and promoting blockchain mainstreaming. To achieve this goal, the team secured investment from Founders Fund, a venture capital firm that has invested in Stripe and SpaceX, and acquired the NFT-specific chain Frame to enhance technical capabilities.

The core difference of Abstract lies in its positioning as a "consumer-grade blockchain": while most blockchains focus on technical integrity or decentralization concepts, Abstract focuses on providing everyday digital experiences in gaming, social networking, and entertainment. Its key innovation is an account abstraction-based wallet system—users can log in and create wallets directly using Google or Apple accounts, and the wallets can be used across multiple applications, covering both existing crypto users and new Web2 users, aiming to eliminate the core barriers to blockchain mainstreaming.

Currently, the Abstract ecosystem has developed to a scale relatively independent of the Pudgy Penguins team, while also becoming the infrastructure for Pudgy Penguins' brand expansion: PENGU is used for tipping on the Abstract portal, and Pudgy Penguins' self-developed games (mentioned later) are also integrated into this chain, with the potential to bring the large-scale Web2 community accumulated by Pudgy Penguins into Web3 in the future.

Current Status of Pudgy Penguins: Moving Towards a Top Global IP

Accelerating Global Layout

Deepening Brand Collaborations

In 2025, Pudgy Penguins will transform into a "global lifestyle brand" through cross-industry collaborations, shifting the focus of partnerships from "brand exposure" to "integrating into daily life":

• Entertainment and Toys: In early 2025, a collaboration with Basic Fun launched a theme park toy line; a partnership with PEZ introduced Pudgy Penguins-themed candies and candy boxes, incorporating global IPs like Pokémon and Disney into the PEZ product line, marking Pudgy Penguins as a mainstream character brand; a collaboration with the classic American slush brand ICEE created custom ICEE character skins for the game "Pudgy Party," enriching offline activities and brand experiences.

• Sports Sector: In September 2024, a partnership with Spanish Segunda División football team CD Castellón featured Pudgy Penguins NFTs printed on the team's jerseys and merchandise, making it the first NFT to appear on a professional football team's jersey; in August 2025, a collaboration with NASCAR (National Association for Stock Car Auto Racing) showcased the Pudgy Penguins brand logo on the race car of driver Ricky Stenhouse Jr., participating in one of NASCAR's four major events over Labor Day weekend, reaching both racing fans and symbolizing the integration of Web3 projects with traditional sports.

• Other Areas: A partnership with Lufthansa's "Miles & More" frequent flyer program allows users to redeem airline miles when purchasing Pudgy Penguins products; a collaboration with streetwear brand VANDYTHEPINK expands into the fashion market; a co-branded product was launched with hardware wallet brand Ledger.

Focusing on the Asian Market

Source: Igloo APAC

Pudgy Penguins is currently focusing on the Asian market, enhancing regional influence through offline events and partnerships with leading companies: its operator Igloo has established an Asia-Pacific division to promote the launch of Pudgy Penguins and PENGU in Asia.

In terms of offline exposure, Pudgy Penguins launched the "Pengu Takeover" campaign, placing outdoor advertisements in key business districts in Seoul and Tokyo, while utilizing an entire building for brand promotion in Bangkok.

In brand collaborations, a strategic partnership was established in 2024 with Lotte, one of South Korea's top five conglomerates, to launch limited edition collectibles; in February 2025, a collaboration with LINE FRIENDS' sub-IP Minini, the largest IP brand in Korea/Asia; a partnership with Chinese toy collector company Suplay laid the groundwork for entering the largest toy market in the world, China; in August 2025, collectible cards were launched in mainstream convenience stores in Japan, and Pudgy Penguins toys were introduced to Japan's largest retailer, Don Quijote.

Luca Netz previously mentioned on the 0xThreadGuy podcast: "Historically, IP has spread from the West to the East, but in the next decade, cultural dissemination will show a trend of Eastern output, and IP industry practitioners need to pay attention to this change." Pudgy Penguins plans to seize this trend to capture the Asian market, enhancing brand recognition through localized content while solidifying PENGU's market position.

Building a Gaming Ecosystem

To upgrade from "collectibles" to "interactive entertainment brands," Pudgy Penguins is actively entering the gaming sector, developing game products across multiple platforms and blockchains for different player demographics:

"Pengu Clash"

Source: Pengu Clash

In May 2025, Pudgy Penguins partnered with Elympics to launch the skill-based game "Pengu Clash" on the TON blockchain, where the core gameplay involves "pushing opponents off an iceberg," featuring simple yet strategic rules.

The game is deployed on both the Abstract and TON chains: the Abstract chain version targets PC users, while the TON chain version functions as a Telegram mini-program, allowing mobile users to play without downloading an app, significantly lowering the participation threshold.

In its first week, "Pengu Clash" attracted over 60,000 players, with 170,000 game sessions; within a month of launch, player numbers surpassed 200,000, with over 1 million game sessions.

"Pudgy Party"

"Pudgy Party" is Pudgy Penguins' first mobile-exclusive game, styled as a competitive obstacle course game similar to "Fall Guys." Addressing the scarcity of high-quality mobile games, Pudgy Penguins leverages its own IP to attract Web2 mobile gamers. After its launch on August 29, 2025, it topped the U.S. App Store racing game chart on its first day and entered the top 30 of the overall free games chart.

The game's core highlight is "tradable character skins": skins can be obtained through gameplay and event participation, and they can circulate in Mythical Games' marketplace. The "Power Pudgy" skin, distributed for free during the 2025 anime convention, currently trades for about $4,300, reflecting strong market demand for such digital assets.

"Vibes TCG"

"Vibes TCG" is a trading card game (TCG) based on the Pudgy Penguins IP, developed by Orange Cap Games. The first set of cards, "Enter the Huddle," is set to launch in the fourth quarter of 2024, having previously secured $2 million in seed round angel investment.

The game's uniqueness lies in its "dual-mode gameplay": it supports the traditional TCG experience of collecting physical cards while also allowing convenient play on digital platforms, catering to different player preferences.

Leveraging the recent surge in physical card trading, "Vibes TCG" has garnered significant market attention: cards distributed for free during the anime convention currently trade between $70 and $150 based on condition; a booster box containing 10 sets of the first edition card decks recently sold for $5,000, further confirming the demand for this IP's cards.

Content Expansion: Targeting the Children's Market

Pudgy Penguins' "cuteness" gives it a natural advantage in the children's market, and the rapid growth of this market makes it a key area for Pudgy Penguins' long-term development. Based on this, Pudgy Penguins is actively advancing content development aimed at children, with the most representative initiatives being children's book publishing and animation production:

Source: Lil Pudgys

In May 2025, Pudgy Penguins announced a partnership with the world's largest children's publisher—Penguin Random House Children's Publishing—to launch its first children's picture book, "The Worst Birthday Gift." Penguin Random House has long collaborated with traditional top IPs like Disney, and this partnership is expected to bring extensive exposure to the Pudgy Penguins IP among children.

Additionally, the animated series "Lil Penguin Show," which began airing in spring 2025, is a significant milestone in Pudgy Penguins' media strategy. Co-produced by TheSoul Publishing, it tells the adventure stories of four penguin roommates: Atlas, Eureka, Snofia, and Springer, set in a mysterious world hidden beneath an iceberg, leaving ample room for future plot expansion. Each character in the animation has a unique personality and background, catering to the emotional resonance needs of different age groups.

TheSoul Publishing, responsible for producing "Lil Penguin Show," is a globally recognized content production company, reaching over 2 billion people with its content. This collaboration will serve as an important channel for Pudgy Penguins to reach a global children's audience.

The Future of Pudgy Penguins: Moving Towards the Ultimate Form of a Top Global IP

Entering the Institutional Market and Advancing ETF Launch

Source: Pudgy Penguins

Pudgy Penguins is exploring the institutional financial market, a field previously untouched by Web3 IP. Currently, Pudgy Penguins has appeared in ETF advertisements from mainstream asset management companies like VanEck and Bitwise, with these institutions showing support by changing their social media avatars to Pudgy Penguins images; recently, the Pudgy Penguins team rang the Nasdaq opening bell in collaboration with VanEck, marking a first for a Web3 project.

In March 2025, Pudgy Penguins submitted an ETF application to the U.S. SEC through Canary Capital, causing a stir in the industry. This ETF adopts a "NFT + token" hybrid structure rather than a single token model, pioneering a new paradigm for NFT asset securitization.

Source: Pudgy Penguins

Currently, the approval process for the Pudgy Penguins ETF is progressing smoothly: in June 2025, the Chicago Board Options Exchange (CBOE) submitted a 19b-4 application (exchange product listing application) for Canary Capital's Pudgy Penguins ETF; in July, the SEC officially confirmed receipt of the application and initiated the review process. Additionally, the Pudgy Penguins team has recently been invited to serve as official regulatory advisors to the U.S. government, a role with significant long-term strategic value—by participating in the regulatory rule-making process, Pudgy Penguins can create a more favorable market environment for itself while proactively avoiding potential regulatory risks; at the same time, the "government-recognized project" attribute will significantly lower the participation threshold for conservative institutional investors.

Initiating IPO and Entering Traditional Capital Markets

Source: Yahoo Finance

One of Pudgy Penguins' most ambitious plans is to complete its initial public offering (IPO) by 2027. In August 2025, Luca Netz explicitly expressed this goal in an interview: "If we can't push the company to go public within the next two years, I will be very disappointed in myself." This plan is not a fantasy but is based on a concrete strategy with clear performance targets—Pudgy Penguins has set a revenue target of $50 million for 2025, which will become a key milestone in the IPO process.

If a project originating from NFTs can go public in the traditional stock market, it will be a groundbreaking event in the industry; if successful, it will fundamentally change the market's perception of Web3 assets—proving that the NFT market recognizes NFTs not just as digital assets but as entities capable of developing sustainable business models. Currently, Pudgy Penguins has formed a stable revenue stream through toy sales, IP licensing, and brand collaborations, which is highly attractive to traditional investors.

The Ultimate Construction of a Top Global IP

Source: @jpgKenny

Pudgy Penguins' ultimate goal is clear: to become a "global IP that surpasses Disney." This goal is not a fantasy but is based on a pragmatic plan grounded in systematic strategy and execution capabilities—within just three years, Pudgy Penguins has achieved accomplishments that traditional IP companies take decades to reach: over 50 billion social media exposures, products covering more than 10,000 stores worldwide, and millions of social media followers. It has now also built a dedicated blockchain and token ecosystem, becoming a unique entity that spans both Web2 and Web3.

Pudgy Penguins' development roadmap fully reflects this vision: the recently launched "Pudgy Party" will naturally guide Web2 mobile game players into the Pudgy Penguins ecosystem; children's books, animations, and other multi-format content will drive its comprehensive entry into the children's market; collaborations with Penguin Random House for picture books and with TheSoul Publishing for animations mark Pudgy Penguins' transition from an "NFT project" to a "comprehensive entertainment company."

Pudgy Penguins' success has profound implications for the entire Web3 industry: it proves that NFTs are not merely speculative tools but can create actual commercial value as IP assets. By issuing the PENGU token, Pudgy Penguins has expanded its holder base to over 600,000 people, achieving a breakthrough in community scale; it is building technical infrastructure through the Abstract blockchain; and its IPO plan connects it with traditional financial markets—these initiatives collectively propel Pudgy Penguins toward becoming the "Disney of the Web3 era."

Pudgy Penguins' journey has only just begun, but based on its achievements over the past three years and future plans, it is not "fantasy" but a systematic realization of its vision: breaking the boundaries between Web2 and Web3, connecting the digital and physical economies, and growing alongside the community to build a new paradigm for the next generation of global IP. Its goal of a "global community of billions" is no longer an unattainable dream but a gradually clear and attainable future.

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