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Pudgy Penguins minted in July 2021, but quickly saw high drama after its former founder came under suspicion he was going to rug the project

A few months later Luca Schnetzler stepped in. With an entrepreneurial streak since his early teens he had a history of building internet businesses and bought the project and its intellectual property of 8,888 cute little Pudgys for $2.5 million in April 2022.

“It was an instinct and intuitive decision. I saw this thing that I was hugely invested in before I bought it that I thought had all of the potential. I was complaining and crying on a daily basis to the founders about how they sucked, and how they could do better. Rather than just doing that, I just stepped up to the plate,” Schnetlzer says.

The narrative of quickly shifted from a rug that could trend to zero to one of hope and optimism when Schnetzler set out a vision for the project the community could rally behind. 

Schnetzler became one of the standout PFP project leaders during the NFT bear market, and the Penguins bucked the trend of cratering floor prices. Since he took over as CEO, the Pudgy Penguins floor has risen from around the 1 ETH mark to 6.32 ETH. Holders and the wider NFT community believe that Schnetzler has a game plan for success and the ability to execute it.

Pudgy Penguins - A Brave New World
Pudgy Penguins – A Brave New World (X)

He says the decision to snap the project up wasn’t as risky as it may have seemed.

“We bought something that netted almost $10 million in six months for $2.5 million. Royalties were making it half a million dollars per month. It was a pretty good business on its face. Intuitively, I think it just comes down to the vision when you close your eyes and you picture Pudgy Penguins, it’s pretty easy to see where this thing can go.” 

Constant momentum and growth has been key to Pudgy’s ascent into one of the top PFP projects, with the cute penguin brand spreading across social media outside of traditional crypto channels like X and Discord. Pudgy’s Instagram has just crossed 1 million followers, while its GIF strategy has been highly effective, only days ago crossing the 10 billion views chasm.

Schnetzler thinks it’s a little bit sad that he gets such praise, when it just highlights how little effort other PFP projects put into trying to grow their brands. 

“Everyone’s been saying that their NFT project is a brand, they have hundreds of millions of dollars that they raised from the community and venture capital at ridiculous valuations. Yet none of them are actually doing the basics of building a brand,” he says. 

“Some people really sing my praises, and it’s actually pretty sad because I do think we do some things really well, don’t get me wrong, but I mean, this should have been the bar all along. The fact that we are doing so many things that so many projects are not doing when they have 10-20 times the resources and 2-3 times the experience is pretty shameful.”

Finding the entrepreneurial spirit

Despite only being 25 years old, Schnetzler actually started his entrepreneurial journey over a decade ago. Growing up poor and bouncing around couch to couch at friends’ places, Schnetzler says he needed to start earning at a young age.

“I’ve really been out of school working for 10 years and it’s pretty crazy to say, but that’s what it’s been,” he says, noting most people don’t even start working until they finish college in their 20s

“Then you do 10 years after you leave college and you’re 33, and then people start to see success in their 30s. That seems to be the time horizon. I think my childhood forced me to start early. I didn’t have the luxury of chilling out or having a childhood where I could just go home and play video games and not worry about anything. I was forced to go work and figure things out.”

Character building versus brand building 

To date, most PFP projects are built around a centralized character with a variety of different traits to give each NFT a slightly different look and feel. Take the OG collection CryptoPunks, the Bored Apes, and it is also true for the Pudgys. But it’s not the case for Gary Vee’s VeeFriends, which boasts 270 individual characters.

Schnetzler believes character building around one individual character is the easier of the two options. 

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“At the end of the day, I think Gary is trying to tackle a tougher challenge. It’s part of the cards I was dealt and have, and he created his cards. I think he’s doing a great job with VeeFriends. I think ultimately he has to create familiarity. Creating familiarity around a character is a lot easier than creating familiarity around a brand,” says Schnetzler.

“They’re two different things and because his universe isn’t predicated on one character, but a multitude of different characters and different animals in different shapes. He is betting and taking a shot at the brand, and the brand name versus the character.” 

“I’m going after the character first and then worrying about the brand because I believe there’s enough people that love penguins and few enough penguin brands out there.”

Luca Schnetzler IRL at Walmart
Luca Schnetzler IRL at Walmart (X)

A brave new world – Walmart pallet program 

In September this year, Pudgys announced a groundbreaking deal with retail giant Walmart that saw Pudgy Penguin physical toys available for sale and in prominent locations in over 2,000 stores throughout the U.S.

“The pallet program is one of the most prestigious places you can get because it gives prime real estate to people walking the floor. It signals Walmart’s belief in the brand and their belief in NFTs and Web3 being a vertical for their retail locations,” says Schnetzler.

“If that can become a general norm in the world’s biggest retailer it gives us a real shot to succeed. It’s one thing to be in the crevices of the toy shelf, it’s another thing to be front and center for everyone to see. That program doesn’t happen for brand-new brands. It’s normally a program for Barbie, Teenage Mutant Ninja Turtles or people that have movies and TV shows off the backs of their releases.”

Building a legacy brand with no playbook 

One of the most common questions consistently thrown at a PFP project is “how do you drive value back to holders?”

In response to criticism about its toy product extension, Schnetzler laid out his plan on how Pudgy Penguins are thinking about value accrual to holders using a classic funnel diagram.

“The funnel is not something that I’ve really invented. I mean, you can throw Star Wars and any other big legacy IP onto that funnel, and that’s the strategy. The idea, though, with NFTs is the value of the first edition collectible is a huge anchor to the business. If you put any first edition collectible at any legacy brand on the bottom of that funnel, it still makes the most sense,” he says.

“I want to build a legacy brand, the likes of a Hello Kitty, a Star Wars and a Pokemon.

That’s easier said than done, he admits, saying there’s no roadmap to follow for a PFP project.

“Hello Kitty took 60 years to build. My holders don’t have 60 years for me to go build something. If I lose momentum and traction within the holder base, then I ultimately lose everything because I don’t believe you can build a successful Web2 business while your Web3 business fails.”

Pudgy World
Pudgy World (pudgypenguins.com)

Rapid-fire Q&A

Your entrepreneurial inspiration 

“I love everything that I think Steve Jobs represents. For me personally, I’ve tried to be my own man, but the one person that I found huge inspiration from, you can kind of tell it in my leadership style, is really Steve Jobs.”

The intense pressure of a founder 

“It’s not easy, but it’s also not the worst thing. One of the reasons why we got here is because of the community. I think I’m in a great situation because I bought the project and I didn’t take any money from them. The nature of people who hold Pudgy Penguin PFPs, they’re good people.”

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“You can’t really be an angry, miserable person and then go click buy on a Pudgy Penguin. The art kind of creates a culture that already filters a lot of that nonsense out. Now, I empathize with a lot of other people who I see go through the chaos.”

What you would tell a Mom about Pudgys

“What I would tell a Mom is, ‘hey, this is a great value proposition for your son or daughter. This is way more fun than any other $10 toy.’”

“Why? Because they unlock a bunch of things in the digital world that not only entertain them when they go to bed or when they’re at recess or on the playground. But also entertains them when they are at home on their iPad and computer. It’s a 2-for-1 bang for buck special.”

Were the Pudgy gifs planned?

“The gifs were totally random. But the second we saw it, we quadrupled down, but it was totally random in the beginning. It was a sheer accident but a happy accident.”

“I don’t need people to know about Pudgy Penguins now, but you want to know something when NFTs are the talk of the town again, and all those people have been using Pudgy gifs the whole time, that’s going be a really good source of credibility for them once everyone starts to want to buy NFTs.”

What’s your position on royalties?

“It shouldn’t be 0% and it shouldn’t be 5%. I think it’s somewhere in the middle. I think the number is between 1% and 1.5% is where I think the enforceable royalty should stand. The reason being is because you just have to incentivize the creator. [That’s] what made YouTube great, what made TikTok great.”

Are you a Wim Hof fanboy? 

“Every day I do his breathing technique and I get high doing it. I recommend it because it’s the quickest way you can get high for free. I’m also setting up my cold plunge now.” 

Where are Pudgys three years from now?

“We’re the face of NFTs, we’re the face of Web3. We have brought the most value to holders emotionally and fiscally. Three years from now we’re probably launching a movie. The movie is close.”

Links:

X: twitter.com/LucaNetz

Website: http://www.pudgypenguins.com

Greg Oakford

Greg Oakford

Greg Oakford is the co-founder of NFT Fest Australia. A former marketing and communications specialist in the sports world, Greg now focuses his time on running events, creating content and consulting in web3. He is an avid NFT collector and hosts a weekly podcast covering all things NFTs.

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Coinbase CEO says the next major crypto bill is a ‘freight train’

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Coinbase CEO says the next major crypto bill is a ‘freight train’

Coinbase CEO says the next major crypto bill is a ‘freight train’

Coinbase CEO Brian Armstrong said he has never been more bullish about the Digital Asset Market Clarity Act being passed after his time in Washington, DC this week.

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Sadiq Khan calls out Gaza ‘genocide’, as Starmer ‘delays’ recognising Palestinian state until end of Trump’s state visit

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Sadiq Khan calls out Gaza 'genocide', as Starmer 'delays' recognising Palestinian state until end of Trump's state visit

London’s mayor Sir Sadiq Khan has for the first time described the situation in Gaza as a “genocide”, becoming the most senior Labour figure to contradict the government’s official position.

Earlier this week, a UN Commission said a genocide was taking place in Gaza – something repeatedly denied by Israel.

Meanwhile, Sir Keir Starmer has been under pressure to raise Israel’s bombardment of the territory with Donald Trump during his state visit to the UK.

The prime minister is due to have discussions with the president today, but reports suggest he will delay formally recognising a Palestinian state until this weekend, after Mr Trump has left Britain.

It is claimed the government wants to avoid the issue dominating a news conference the two men plan to hold, according to The Times.

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Trump meets Starmer: What can we expect?

The prime minister has found himself at odds with the US administration over the move, which is opposed to official recognition of Palestine.

The mayor of London, who has engaged in a long-running spat with Mr Trump, has added to the political tension by contradicting official Labour policy at a people’s question time event on Wednesday.

“I think it’s inescapable to draw the conclusion in Gaza we are seeing before our very eyes a genocide,” said Sir Sadiq.

Sir Keir has previously pledged to recognise Palestinian statehood ahead of next week’s United Nations General Assembly in New York if Israel does not meet a series of conditions to improve the humanitarian situation in Gaza.

Other nations, including France, Australia and Canada, have said they plan to take the same step at the UN gathering.

Explainer: What does recognising a Palestinian state mean?

The UK has consistently argued that the issue of whether Israel has committed genocide was a matter for the courts. Israel is fighting a case at the International Court of Justice in The Hague in which the country is accused of genocide.

But some opposition leaders, including Zack Polanski for the Green Party, and the Liberal Democrats’ Sir Ed Davey have specifically referred to the situation in Gaza as genocide.

Read more from Sky News:
Watch: Israel’s Gaza City offensive
MPs denied entry into West Bank

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Is Israel committing genocide?

On Tuesday, the UN Independent International Commission of Inquiry on the Occupied Palestinian Territory released a report, claiming: “It is clear that there is an intent to destroy the Palestinians in Gaza”.

It said Israel’s actions meet the criteria set down for defining a genocide.

The UK government has said its official position was it “has not concluded that Israel is acting with that [genocidal] intent“.

Israel is currently undertaking a major ground offensive in Gaza, with thousands forced to flee from Gaza City in recent days.

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Trump-Starmer talks could be landmark moment – and join pantheon of UK-US summits

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Trump-Starmer talks could be landmark moment - and join pantheon of UK-US summits

In years to come, it may become known simply as Chequers ’25.

But today’s summit between Sir Keir Starmer and Donald Trump, at the prime minister’s country retreat, has the potential to be a landmark moment in UK-US history.

There’s plenty of scope for it to go horribly wrong, of course: over Jeffrey Epstein, Sir Keir’s pledge to recognise Palestine, the president’s lukewarm support for Ukraine, the Chagos Islands sell-off, or free speech.

Trump state visit live – read the latest

But on the other hand, it could be a triumph for the so-called “special relationship” – as well as relations between these two unlikely allies – with deals on trade and tariffs and an improbably blossoming bromance.

Either way, this Chequers summit – on the president’s historic second state visit to the UK – could turn out to be one of the most notable one-to-one meetings between PM and president in 20th and 21st century history.

Sir Keir and Mr Trump have already met several times, most recently at The Donald’s golf courses in Scotland in late July and, before that, memorably at the White House in February.

Donald Trump and Keir Starmer wave as they board Air Force One on a previous trip. Pic: AP
Image:
Donald Trump and Keir Starmer wave as they board Air Force One on a previous trip. Pic: AP

It was then that the PM theatrically pulled King Charles’s invitation for this week’s visit out of his inside pocket in a spectacular stunt surely masterminded by the “Prince of Darkness”, spin doctor-turned-ambassador (until last week, anyway) Peter Mandelson.

And over the years, there have been some remarkable and historic meetings and relationships, good and bad, between UK prime ministers and American presidents.

From Churchill and Roosevelt to Eden and Eisenhower, from Macmillan and JFK to Wilson and Johnson, from Thatcher and Reagan, to Blair and Bush, and from Cameron and Obama… to Starmer and Trump, perhaps?

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‘History’ that binds the UK and US

A brief history of relationships between PMs and presidents

Throughout UK-US history, there have been many examples of a good relationship and close bond between a Labour prime minister and a Republican president. And vice versa.

Also, it has not always been rosy between prime ministers and presidents of the two sister parties. There have been big fallings out: over Suez, Vietnam and the Caribbean island of Grenada.

Leading up to this Chequers summit, the omens have not been good.

First, the PM was forced to sack his vital link between Downing Street and the Oval Office, Lord Mandelson, over his friendship with Epstein.

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Trump meets Starmer: What can we expect?

Second, the president arrived in the UK to a barrage of criticism from London Mayor Sir Sadiq Khan, who accused him of doing more than anyone else to encourage the intolerant far right across the globe.

And third, in a video-link to the ‘Unite the Kingdom’ march in London last weekend, one-time Trump ally Elon Musk called for a dissolution of parliament and a change of government and appeared to encourage violent protest.

Churchill and FDR

Churchill and FDR at the White House in 1941. Pic: AP
Image:
Churchill and FDR at the White House in 1941. Pic: AP

Back in the mid-20th century, the godfather of the “special relationship” was wartime leader Sir Winston Churchill, though it was 1946 before he first coined the phrase in a speech in the US, in which he also spoke of the “iron curtain”.

It was in 1941 that Churchill held one of the most significant meetings with a US president, Franklin D Roosevelt, at a Washington conference to plot the defeat of Germany after Japan’s attack on Pearl Harbour.

Churchill arrived in Washington in December after a rough 10-day voyage on a Royal Navy battleship and stayed three weeks, spending Christmas in the White House and on Boxing Day becoming the first UK PM to address Congress.

The close bond between Churchill and Roosevelt was described as a friendship that saved the world. It was even claimed one reason the pair got on famously was that they were both renowned cigar smokers.

Churchill and Truman

Churchill and Truman catch a train from Washington in 1946. Pic: AP
Image:
Churchill and Truman catch a train from Washington in 1946. Pic: AP

After the war ended, Churchill’s “special relationship” speech, describing the alliance between the UK and US, was delivered at Westminster College, in Fulton, Missouri in March 1946.

The speech was introduced by President Harry Truman, a Democrat, with whom Churchill had attended the Potsdam Conference in 1945 to negotiate the terms of ending the war.

These two were also close friends and would write handwritten letters to each other and address one another as Harry and Winston. Mr Truman was also the only US president to visit Churchill at Chartwell, his family home.

Eden and Eisenhower

Eden and Eisenhower shake hands at the conclusion of their three-day conference in 1956. Pic: AP
Image:
Eden and Eisenhower shake hands at the conclusion of their three-day conference in 1956. Pic: AP

But the transatlantic cosiness came to an abrupt end in the 1950s, when Churchill’s Conservative successor Anthony Eden fell out badly with the Republican president Dwight Eisenhower over the Suez Crisis.

Mr Eden did visit Mr Eisenhower in Washington in January 1956, and the official record of the meeting describes the discussion as focussing on “policy differences and Cold War problems”.

Macmillan and JFK

Harold Macmillan and John F Kennedy at Andrews Air Force Base. Pic: AP
Image:
Harold Macmillan and John F Kennedy at Andrews Air Force Base. Pic: AP

But in the early 1960s, a Conservative prime minister and a Democrat president with seemingly nothing in common, the stuffy and diffident Harold Macmillan, and the charismatic John F Kennedy, repaired the damage.

They were credited with rescuing the special relationship after the rupture of the Suez Crisis, at a time of high tensions around the world: the Berlin Wall, the Cuban missile crisis, and the threat of nuclear weapons.

The two leaders exchanged handwritten notes, as well as Christmas and birthday cards. The Macmillans visited the Kennedys twice at the White House, in 1961 and 1962 – the second described in the US as a “momentous” meeting on the Cuban crisis.

The relationship was abruptly cut short in 1963 by “Supermac’s” demise prompted by the Profumo scandal, and JFK’s assassination in Dallas. But after her husband’s death, Jacqueline Kennedy was said to have had a father-daughter relationship with Macmillan, who was said to have been enchanted with her.

Wilson and LBJ

Johnson meeting with Wilson. Pic: Glasshouse Images/Shutterstock
Image:
Johnson meeting with Wilson. Pic: Glasshouse Images/Shutterstock

After JFK, the so-called “special relationship” cooled once again – and under a Labour prime minister and Democrat president – when Harold Wilson rejected pressure from Lyndon B Johnson to send British troops to Vietnam.

Mr Wilson became prime minister in 1964, just two months after LBJ sent US troops. His first overseas trip was to the White House, in December 1964, and the PM returned to tell his cabinet: “Lyndon Johnson is begging me even to send a bagpipe band to Vietnam.”

Thatcher and Reagan

Thatcher at Reagan's 83rd birthday celebrations. Pic: Reuters
Image:
Thatcher at Reagan’s 83rd birthday celebrations. Pic: Reuters

And even though Margaret Thatcher and Ronald Reagan were ideological soulmates, Thatcher was furious when she wasn’t consulted before the Americans invaded Grenada in 1983 to topple a Marxist regime.

Even worse, according to Mrs Thatcher allies, a year earlier, Reagan had stayed neutral during the Falklands war. Reagan said he couldn’t understand why two US allies were arguing over “that little ice-cold bunch of land down there”.

Thatcher and Reagan became firm friends. Pic: Reuters
Image:
Thatcher and Reagan became firm friends. Pic: Reuters

But their relationship didn’t just survive, it flourished, including at one memorable visit to the presidential retreat at Camp David in 1984, where President Reagan famously drove Mrs T around in a golf buggy.

They would also memorably dance together at White House balls.

Blair and Bush

Blair hosts Bush in Durham in 2003. Pic: PA
Image:
Blair hosts Bush in Durham in 2003. Pic: PA

Camp David was also where in 2001 the Republican president George W Bush and Labour’s Sir Tony Blair embarked on the defining mission of his premiership: the Iraq War. It was to prove to be an historic encounter.

The war was the turning point of Sir Tony’s decade in Number 10. He was branded a liar over claims about Saddam Hussein’s “weapons of mass destruction”, he was vilified by the Labour left, and it was the beginning of the end for him.

And to add to the suspicion among Sir Tony’s critics that he was Mr Bush’s poodle, in 2006 at a G8 summit in St Petersburg – that wouldn’t happen now – a rogue microphone picked up the president calling, “Yo, Blair! How are you doing?”

Cameron and Obama

Cameron and Obama serve food at a barbecue in the garden of 10 Downing Street. Pic: Reuters
Image:
Cameron and Obama serve food at a barbecue in the garden of 10 Downing Street. Pic: Reuters

Some years later, the Tory prime minister sometimes called the “heir to Blair”, David Cameron, bonded over burgers with the Democrat president Barack Obama, serving a BBQ lunch to military families in the Downing Street garden. They also played golf at the exclusive Grove resort in 2016.

They seemed unlikely allies: Obama, the first African-American president, and Cameron, the 19th old Etonian prime minister. It was claimed they had a “transatlantic bromance” in office. “Yes, he sometimes calls me bro,” Lord Cameron admitted.

But not everything went well.

The Tory PM persuaded Mr Obama to help the Remain campaign in the 2016 Brexit referendum, when he claimed the UK would be “at the back of the queue” on trade deals with the US, if it left the EU. It backfired, of course.

Now it’s Sir Keir Starmer’s turn to tread a delicate and potentially hazardous political tightrope as he entertains the latest – and most unconventional – US president.

The greatest dangers for Sir Keir will be a news conference in the afternoon, in the gardens, if the weather permits.

Good luck, as they say, with that.

Before then, there’s the potential for what the Americans call a “pool spray”, one of those impromptu, rambling and unpredictable Q&As we’ve seen so many times in the Oval Office.

For Sir Keir, what could possibly go wrong?

Chequers ’25 could be memorable and notable, like so many previous meetings between a PM and a president. But not necessarily for the right reasons for this UK prime minister.

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