Pudgy Penguins CEO says praise he gets ‘is actually pretty sad’: NFT Creator
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.
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.
Read also
“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.”
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.”
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.”
Read also
“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:
Website: http://www.pudgypenguins.com
Subscribe
The most engaging reads in blockchain. Delivered once a
week.
The US Securities and Exchange Commission and crypto exchange Gemini have asked to pause the regulator’s suit over the exchange’s Gemini Earn program, saying they want to discuss a potential resolution.
In an April 1 letter to New York federal court judge Edgardo Ramos, lawyers representing the SEC and Genesis requested a 60-day hold on the case and that all deadlines be pulled “to allow the parties to explore a potential resolution.”
“In this case, the parties submit that it is in each of their interests to stay this matter while they consider a potential resolution and agree that no party or non-party would be prejudiced by a stay,” the letter states.
The lawyers added that a stay was in the court’s interest as “a resolution would conserve judicial resources” and proposed that a joint status report be submitted within 60 days after the entry of the stay.
The SEC sued Gemini and crypto lending firm Genesis Global Capital in January 2023, alleging they offered unregistered securities through the Gemini Earn program.
In March 2024, Genesis agreed to pay $21 million to settle charges related to the lending program, but the enforcement case against Gemini remains outstanding.
Letter from SEC and Genesis Global requesting extension of stay. Source: CourtListener
The letter did not specify what a possible resolution would entail, but the SEC has dropped several lawsuits it launched against crypto companies under the Biden administration, including against Coinbase, Ripple and Kraken.
Related: Will new US SEC rules bring crypto companies onshore?
In February, Gemini said the SEC closed a separate investigation into the firm as the regulator winds back its crypto enforcement under President Donald Trump.
“The SEC cost us tens of millions of dollars in legal bills alone and hundreds of millions in lost productivity, creativity, and innovation. Of course, Gemini is not alone,” Gemini co-founder Cameron Winklevoss said at the time.
OpenSea, Crypto.com and Uniswap, among others, have also recently reported that the SEC had closed similar probes into their companies that were investigating alleged breaches of securities laws.
Magazine: Bitcoin ATH sooner than expected? XRP may drop 40%, and more: Hodler’s Digest, March 23 – 29
Two Republicans who received a combined $1.5 million from the crypto-backed political action committee (PAC) Fairshake will enter the US House after winning special elections in Florida.
Republican Jimmy Patronis won the vacant seat in Florida’s 1st Congressional District to replace Matt Gaetz, taking 57% of the vote to defeat Democrat Gay Valimont, according to AP News data.
Randy Fine also took Florida’s 6th Congressional District with 56.7% of the vote to beat his Democratic rival, public school teacher Josh Weil, and fill a seat left vacant by Mike Waltz, who took a job as White House national security adviser.
Florida’s 1st and 6th Congressional Districts — located in Florida’s western panhandle and along the state’s northeast coast — have been controlled by Republicans for roughly 30 years, but their lead has narrowed in recent years.
Fairshake, a PAC backed by crypto industry giants including Coinbase, Ripple and Andreessen Horowitz, gave Fine around $1.16 million in advertising spending and funneled $347,000 to Patronis to support his campaign.
Both Republicans have expressed support for the crypto industry, with Fine stating in a Jan. 14 X post that “Floridians want crypto innovation!”
Source: Randy Fine
Fairshake and its affiliates poured around $170 million into the 2024 US presidential and congressional elections to back candidates who committed to supporting the crypto industry.
The wins by Patronis and Fine increased Republican representation in the House to 220 seats, with the Democrats holding 213 seats.
There are two vacant seats to be filled after Texas and Arizona Democrats Sylvester Turner and Raúl Grijalva died on March 5 and March 13, respectively.
Florida can expect to see a crypto-friendly regulatory environment
The victories for Patronis and Fine likely mean that crypto legislation will continue to see support in the US capital.
The Republican Party would have maintained its House majority even if it lost both seats in Florida, but it would have made it more difficult for some of the recently introduced Republican-backed crypto bills to pass through the House and Senate.
Related: Florida bill proposes strict rules against online gambling
At the Digital Assets Summit on March 18, Democratic Congressman Ro Khanna said he believes Congress “should be able to get” both a stablecoin and crypto market structure bill done this year.
Bills that could eventually make their way to the House include the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which passed the Senate Banking Committee in an 18-6 vote on March 13.
Senator Cynthia Lummis also reintroduced a Bitcoin reserve bill about a week after the Trump administration announced the establishment of a Strategic Bitcoin Reserve on March 6, with the legislation referred to the Senate Banking Committee on March 11.
Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions
Several British trade associations have asked Prime Minister Keir Starmer’s office to appoint a special envoy dedicated to crypto and for a dedicated action plan for digital assets and blockchain technology.
In a March 31 letter, the coalition of six UK digital economy trade bodies urged Starmer’s special adviser on business and investment, Varun Chandra, for a “greater strategic focus and alignment to deliver investment, growth and jobs” for the crypto industry.
The group, which consisted of the UK Cryptoasset Business Council, Global Digital Finance, The Payments Association, Digital Currencies Governance Group, the Crypto Council for Innovation and techUK, noted the US policy shift on crypto under President Donald Trump and his appointment of a crypto czar.
Britain’s commitment to an economic trade deal focused on technological cooperation with the US “presents a significant opportunity to mirror the United States’ ambition in fostering leadership in blockchain, digital assets, and other emerging financial technologies,” the letter stated.
The group recommended that the UK appoint a blockchain special envoy, similar to the US, to coordinate policy, foster innovation, and position the country competitively in global markets.
The trade bodies also called for the development of a dedicated government action plan for crypto and blockchain technology, including a concierge service to attract high-potential firms.
They added that the government should acknowledge and leverage the commonalities between blockchain, quantum computing and artificial intelligence technologies, including potential applications for government services.
Another recommendation was to create a high-level industry-government-regulator engagement forum to ensure informed decision-making and cross-sector collaboration.
The UK crypto and tech associations lobbying the government for a policy shift. Source: LinkedIn
“With deep pools of talent, access to capital, world-class academic institutions, and sophisticated regulators, the UK provides an environment where digital assets and blockchain innovation can thrive,” they stated.
Related: UK should tax crypto buyers to boost stock investing, economy, says banker
The coalition argues that crypto and blockchain technology could boost the UK economy by 57 billion British pounds ($73.6 billion) over the next decade, with the sector potentially increasing global gross domestic product by 1.39 trillion pounds ($1.8 trillion) by 2030.
Tom Griffiths, the co-founder and managing partner of crypto compliance advisory firm BitCompli, said in response to the letter on LinkedIn that the Financial Conduct Authority “has a lot of talent and a good sight of future plans, but the UK is definitely losing pace with Dubai, Singapore, and other EU jurisdictions.”
“Now is the time for the FCA to act, or the UK will lose out on this huge opportunity, which is digital assets and all the benefits this sector can bring, not only now but over the next 20 years,” he added.
Magazine: Bitcoin ATH sooner than expected? XRP may drop 40%, and more: Hodler’s Digest, March 23 – 29
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports12 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway