Pudgy Penguins CEO Talks Building a Sustainable Web3 Business

The phrase “whatever doesn’t kill you makes you stronger” is rarely true for NFT projects. Even the slightest whisper of misconduct from management can reduce the value of a project and cause massive hemorrhage from community members. When this happens, once-beloved Web3 entities usually end up dead in the water.

This is not the case for Pudgy Penguins – the project represents one of the NFT spaces greatest comeback stories. After bursting onto the scene during the 2021 NFT bull run, Pudgy founder Cole Thereum (and his accompanying team) have been accused of draining funds from the project. Rumors of an all-in draw grew louder, and after a leadership transfer failureLongtime Pudgy fan and titular CEO Luca Schnetzler purchased the collection for 750 ETH (about $2.5 million at the time).

The team now makes the project’s tumultuous history a proud part of its history. Schnetzler and his team have developed a growth strategy that relies on leveraging Pudgy Penguins intellectual property beyond the walls of the NFT ecosystem – with the goal of carrying the brand far into the future while incentivizing more great rewards for community involvement – in a new Web3 benchmark for onboarding blockchain skeptics.

Building the future of Pudgy Penguins

Last week, Pudgy Penguins partnered with Sotheby’s for an auction of 11 NFT Pudgy Penguins. Called Snowed In: A Rare Sale of Chubby Penguins, this is a digital auction running November 18-30 and features Cole Thereum’s famous Pudgy Penguin #4609, which was transferred to Schnetzler and the team after the sale of the collection more early this year. And the timing couldn’t be more fitting: the Art Basel party and Sotheby’s auction are happening as if in sync, when the Pudgy Penguins comeback story seems to have reached critical mass.

The NFT (Penguin #4609) is a crucial part of the project’s trajectory and is for sale alongside the rare Penguin #7315, #505, #7405, #6615 and several others. Those who land a Pudgy NFT at Sotheby’s auction will also receive the auction house’s top prize. soulbound token which functions as a certification of authentication, proving that they participated in the auction. Speaking about the community auction, Schnetzler told nft now: “We are using the Sotheby’s auction as a chance to launch our community fund called The Cozy Horizon Fund.”

“All proceeds from the auction will go to this fund so we can use it to fund fun community events.” Such an event is NFT Winter, the team’s welcome party for holders attending Art Basel in Miami this week, which it is hosting in conjunction with crypto exchange Uniswap. “At present, [the space] is going through a tough time, and we wanted additional coverage to make sure we can deliver amazing experiences to the community,” Schnetzler pointed out.

Pudgy Penguins in the retail market

In a Web3 environment where crypto markets are more volatile than ever and where the relatively simple success methods that marked the bull run of 2021 no longer apply to NFT projects, Pudgy Penguins looks at the potential of its property intellectual to achieve stability and longevity.

“We have our own vision for the PFP space,” Schnetzler said. “This intellectual property is valuable. We think Penguins are valuable, especially in the retail market.

This is why the brand is preparing a series of Physical plump penguins products ranging from plush toys to children’s books that the company plans to release in the first quarter of 2023. The team is currently locking contracts with retailers that focus on family-friendly IP licensing agencies . PMI Toys, a manufacturer, marketer and distributor of children’s toys, will produce pudgy physical toys.

The team amended its NFT User Agreement to open up the brand’s intellectual property, allowing holders to use their Pudgy for commercial purposes. If a licensee’s business venture exceeds $500,000 in annual revenue, they are expected to work collaboratively with the team to secure a larger licensing agreement.

“It allows us to negotiate big deals like the one with PMI Toys where we’re able to give people a revenue share based on sales,” Schnetzler explained.

Schnetzler and his team have so far licensed more than a dozen Pudgies to be part of upcoming toy releases, and also picked five Pudgies to be part of a children’s book deal with the publisher. Green kids club. In order for licensees to be eligible to have their Pudgy chosen to be part of these deals, they must apply on the project’s website when the team announces a potential new licensing deal. They then choose the one they think would be the best fit for the proposed deal. For an upcoming cuddly plush outing, for example, the team selected a Pudgy with a polar bear hat. Once chosen, the holder of a Pudgy will receive one-thirteenth of the revenue percentage over the life of the agreement.

“We have over 8,000 Penguins, and every time we open one of these deals, we have several hundred in the first hour,” Schnetzler said. “People really want to see their IP, they just don’t have the time to make the connections they need to take advantage of it. We are trying to create more opportunities for our holders to experience the power of this intellectual property, because we know they are busy. They are not the NFT degen stereotype that people can sometimes make out they are.

“With all that’s going on [in the NFT and crypto space]we need to make NFTs and crypto a bit more accessible.

Luca Schnetzler

Schnetzler acknowledged that entering into such licensing agreements can sometimes be difficult due to their notoriously complex – companies are naturally reluctant to commit to a contract with several different parties in the mix. Ultimately, however, enthusiasm for the potential of IP wears them out. The Pudgy team’s goal in orchestrating these deals is largely to create engaging and valuable physical products tied to digital experiences.

Moving Web3 Brands Beyond Web3

Pudgy’s strategy of branching out into IRL products is just part of the team’s vision for growing the brand. With a strong presence on Instagram which promotes mental health and positivity – and mentions nothing about NFTs – Pudgy Penguins is slowly and organically bringing Web3 to the public radar.

“We’ve seen a lot of projects go into Web3, and they’re just focused on Twitter and Discord engagement farming,” Schnetzler observed. “And it worked in the bull market. But when we took over [Pudgy Penguins], we decided to create a very wide network on Instagram where we don’t even mention NFTs. We constantly post positive affirmations. This helped to get people interested in the brand. And if they use our Linktree, they realize there’s so much more to the community. With everything that’s going on [in the NFT and crypto space]we need to make NFTs and crypto a bit more accessible.

Building community trust and transparency

The Pudgy team has also started onboarding community members to help them work on new projects and developments. Schnetzler noted that 11 of the coders on the team are Pudgy holders who have joined to help code several of the brand’s upcoming projects. This, combined with the team’s strategy of over-communicating even minor project changes to their holders, helps them foster trust and transparency at a time when even the average NFT enthusiast feels suspicious.

“The community knows we actually build things because they help us build them.”

Luca Schnetzler

“The community knows that we actually build things because they help us build them,” Schnetzler remarked. “We understand how hard it is to trust any type of player in the NFT community right now. So how do you bridge that gap? You over-communicate.

Collaborate with branded charities

Ten percent of Sotheby’s auction proceeds will go to petrels, a non-profit organization that studies Antarctic penguin populations in support of climate science. The Pudgy team keeps an eye out for potential charitable partnerships as long as they align with its brand and mission. Penguin research and climate science go hand in hand, but the team’s leadership also recognizes that their strong presence in positivity and mental health advocacy spaces means there are avenues to explore in this direction.

“As long as it identifies with our brand, we’re interested in it,” Schnetzler said. “These charity collaborations are something we’re really passionate about.”

The rest of Web3 also has every reason to be excited about Pudgy Penguins’ moves. The project could prove to be a great example of how NFT brands can establish themselves as serious and enduring entities and demonstrate their ability to cross isolation at times. web3 walls, to extend a reassuring hand to NFT skeptics. And, at this point in Web3’s evolution, there are few holier grails than successfully allaying public concerns about blockchain technology.