Mass Adoption Textbook - Written by Pudgy Penguins

Key Takeaways

• Pudgy Penguins and $PENGU are among the most popular and beloved crypto-native characters. Pudgy Penguins ranks as the second-largest NFT project by market cap, while $PENGU is now the world's fourth-largest memecoin and the biggest new memecoin launched in the last three years. Behind the success of Pudgy Penguins NFT and $PENGU lies a strategic choice for expanding brand awareness, which is to expose Pudgy Penguins through as many diverse methods as possible and to penetrate the market with different strategies tailored to various targets, ranging from the general public to investors, institutions, children, and more.

• Pudgy Penguins has executed a multi-layered strategy tailored to diverse consumer segments, from the general public to institutional investors. Notably, their institutional market approach has achieved unprecedented results, including partnerships with major asset managers like VanEck and Bitwise, ringing the NASDAQ opening bell, and filing for an SEC ETF.

• Pudgy Penguins has perfectly merged Web2 and Web3 businesses by building a growth flywheel that drives physical product sales through social media virality, engages consumers in the token ecosystem through on-chain platform integration linked to physical products.

1. Sometimes, Hiding Is a Strategy

Source: National Geographic

Red Bull started as a small Thai energy tonic called Krating Daeng. When the founder, an Austrian toothpaste marketer, established what we now know as Red Bull in 1987, it was merely a product that changed the packaging from bottle to can and westernized the taste. Market research before launch was brutal, with widespread criticism about its poor taste.

Nevertheless, Red Bull went on to create an entirely new category—"energy drinks"—that now accounts for 25% of the entire beverage market, and has grown into a mega-corporation generating over $10 billion in revenue. How did Red Bull create something from nothing?

Red Bull focused solely on "brand awareness." Instead of running massive TV advertising campaigns like Coca-Cola or Pepsi, Red Bull went directly to where people gathered. They sent specially modified Mini Coopers to college campuses to distribute free products to students, and created a new drinking culture in clubs and bars by mixing the drink with vodka. This strategy positioned Red Bull as "the drink popular among young people."

But Red Bull's true genius was revealed in its integration with extreme sports. After building a fanbase among young demographics, Red Bull pursued marketing that other beverage companies couldn't even imagine for attacking the mainstream market. They began acquiring sports teams. Starting with the launch of Red Bull Racing in 2005, Red Bull acquired numerous sports teams throughout the 2000s, including Austrian football club Red Bull Salzburg, American soccer team New York Red Bulls in 2006, and German football club RB Leipzig in 2009. They didn't stop at mere acquisitions—they transformed these teams to deliver exceptional performance, maximizing Red Bull's energetic image.

While they hosted various extreme sports events to expose their brand globally and conducted marketing that maximized this image, what's strange is that nowhere on screen was there a message saying "drink Red Bull." This marketing approach, also known as "stealth marketing," is a strategy that naturally imprints the brand on consumers by approaching it as a culture rather than directly exposing the product.

Pudgy Penguins' mainstream strategy is similar to Red Bull's approach. When you attach a Pudgy Penguin GIF to a message you're sending to a friend, almost no one knows it's an NFT project. The same goes for parents picking up penguin toys for their children at Walmart, or users liking adorable penguin couple videos on Instagram. Pudgy Penguins thoroughly hides its Web3 aspects and presents only pure cuteness at the forefront, making its primary goal to increase awareness across a broad consumer base through emotion.

As a result, Pudgy Penguins has transcended Web3 barriers to conquer the mainstream market. In the following sections, we'll take a closer look at how Pudgy Penguins has infiltrated our daily lives and how this has led to their success.

2. The Strategy of Selling Cuteness While Hiding Crypto

2.1 Removing Entry Barriers Through 'De-cryptofication'

While most crypto projects proudly proclaim that they are Web3, blockchain-based, and decentralized, Pudgy Penguins chose the opposite path of intentionally hiding crypto. Among parents purchasing Pudgy Penguin toys at Walmart stores, almost none know this is related to Pudgy Penguins NFTs or $PENGU. Most of the 2 million followers on Instagram are consumers who refer to blockchain as "Bitcoin."

This 'de-cryptofication' strategy is highly intentional and systematic.

Pudgy Penguins team aims to reach a broader user base through casual games, and is recently pursuing large-scale user onboarding through two games: Pengu Clash and Pudgy Party.

Source: Pengu Clash

Pengu Clash is a fast-paced PvP casual game deployed on Abstract and TON, capturing both PC environment and Telegram-based mobile users. Each character in Pengu Clash is based on Pudgy Penguins IP, and it was developed in a format that anyone can easily enjoy, centered around cute characters and simple game logic. Pengu Clash recorded over 60,000 players and more than 170,000 gameplay sessions in its first week of launch alone, and achieved the milestone of over 200,000 players and more than 1 million play sessions within a month after launch.

Source: Pudgy Party

Pudgy Party is the first mobile-exclusive game of Pudgy Penguins, developed as a casual, competitive obstacle racing game. Released on August 29th, it generated an enthusiastic response by reaching #1 in Racing Games and #30 in Free Games on the US App Store on its very first day. Pudgy Party is expected to generate responses from many Web2 mobile gamers who have been thirsting for quality content, by penetrating the mobile gaming ecosystem, where relatively high-quality games have become hard to find, with its unique IP. Additionally, the Pudgy Penguins team announced that custom costumes will be launched within Pudgy Party through a collaboration with the famous beverage brand ICEE, and it is expected that they will attract and incorporate more users into the community through various major brand partnerships in the future.

What's important is that while these are games that use (or will use) on-chain environment, this is thoroughly hidden while the play or registration process in web2 user's perspective. Users experience this without even knowing they are creating an on-chain wallet, and through this experience, users complete their preparation for onboarding into the Pudgy Penguins ecosystem relatively without resistance.

This vast pool of general users generated by games can become invaluable foundation for Pudgy Penguins' future business expansion. By directly porting these created wallets to their own platform, they can generate a very large initial user pool.

2.2 'Cuteness' as a Universal Emotional Code

Another key to Pudgy Penguins' mainstream success is their focus on the universal emotion of 'cuteness.' Instead of blockchain innovation or NFT scarcity, they concentrated all efforts on creating adorable characters that make you smile just by looking at them.

The scientific definition of cuteness is explained through 'Baby Schema'—the theory that features like large heads, round faces, big eyes, and small noses and mouths trigger human protective instincts and affection. Pudgy Penguins perfectly embodies these elements: round bodies, large eyes, small beaks, short wings and legs. All of these evoke instinctive cuteness.

More importantly, this cuteness transcends cultural and linguistic barriers. Pudgy Penguins are equally adorable in the United States, Japan, and Brazil. No complex explanations or contextual understanding required. The instant reaction is simply "cute." This is an extremely favorable condition for global expansion.

Source: @SteveG60117

Pudgy Penguins has been intensively targeting the Asian market recently, gradually proving that Pudgy Penguins is an IP that resonates in Asia as well through various events and major brand collaborations.

Igloo recently established Igloo APAC separately to target the APAC region, and is spreading Pudgy Penguins and $PENGU at a very rapid pace throughout Asia.

Pudgy Penguins is exposing its brand to the public around the world through "Pengu Takeover" events, broadcasting Pudgy Penguins on billboards in major hot spots in Seoul and Tokyo, and in Bangkok, they promoted Pudgy Penguins using an entire high-rise building.

Brand collaborations are also being conducted with major corporations in each country. In 2024, they signed a strategic partnership with Lotte, one of Korea's top 5 conglomerates, and launched limited edition collectibles. In February this year, they announced a collaboration with Minini from LINE FRIENDS, Korea/Asia's largest IP brand.

This August, they launched collectible photo cards in collaboration with most major convenience stores in Japan, and achieved the milestone of getting Pudgy Toys stocked in Don Quijote, Japan's largest retail store.

Luca Netz previously stated in the podcast at Counterparty TV, "Culture used to be incubated out of the West. I think you’re going to see that paradigm shift to Tokyo, Korea, and China for the next 10 years." Pudgy Penguins is expected to capture this phenomenon early to secure the Asian market, will further expand Pudgy Penguins' recognition through content produced by them, and solidify PENGU's position.

3. Exposure to the Maximum Number of Consumer Segments

3.1 General Public: Verticalizing Attention Strategy

Pudgy Penguins' SNS strategy targeting the general public is sophisticatedly segmented. Instead of publishing all content through a single brand account, they operate separate accounts for each target audience, providing customized content.

This approach embodies the "Verticalizing Attention Strategy," where attention is not spread thinly across a broad audience but deepened vertically into specific segments. By tailoring messages to niche groups, they capture deeper engagement and build lasting mindshare.

The main account, 'Pudgy Penguins,' primarily targets couples, creating short-form content they can relate to. This content receives explosive responses from young couples, with comments flooding in saying "this is so us." The 'Purgy Pengoon' account focuses on humor and meme culture. It cleverly expresses comic moments of penguins, and situations that resonate with everyday experiences. Meanwhile, the 'Kind Pengu' account differentiates itself with warm and comforting content, mainly featuring stories of participating in broadcasts of streamers with small viewerships who are going through difficult circumstances, providing consolation messages along with donations.

Another channel Pudgy Penguins has successfully conquered is GIF image support sites. Actively utilizing their characters' cuteness, Pudgy Penguins has been producing witty GIFs that reflect the latest memes and quickly uploading them to sites like GIPHY and Tenor. Since GIPHY and Tenor are directly integrated with major SNS services like Instagram and X to provide GIF images in comments and direct messages, this is the most efficient way to gain exposure to their users. Currently, Pudgy Penguins has recorded a total of 56.2 billion views on GIPHY, ranking second among character IPs after SpongeBob, surpassing Disney and Pokémon, successfully blending into the general public's life as much as Web2 IPs.

I believe the biggest factor enabling Pudgy Penguins to successfully execute this strategy is their broad content tolerance. Major Web2 IPs like Disney have grown through businesses targeting children, so they can only produce very limited and censored content. In contrast, Pudgy Penguins has built its fandom through youth-oriented social media like Instagram and YouTube, so their consumer base is relatively accepting of content boundaries, and they can quickly produce content about the latest memes that existing IPs find difficult to immediately apply, thus capturing mindshare.

3.2 Crypto Community: Builder-Centric Community, and $PENGU

Source: @LucaNetz

Pudgy Penguins' position within the crypto community is unrivaled. Currently the most successful NFT project, it can be considered the PFP collection with the highest floor price excluding CryptoPunks. In particular, the builder group known as 'Pengpal Mafia' is one of the key factors elevating Pudgy Penguins' position in the crypto community. Beyond just the Pudgy Penguins team, builders are active across virtually all areas of crypto—from protocol-level projects like LayerZero and Polygon to blockchain solutions, wallets, DeFi, podcasts, and traditional finance—all using Pudgy Penguins as their profile pictures. They share ideas and collaborate through the Pudgy Penguins community, sometimes providing alpha about their building projects to Pudgy Penguin holders.

Additionally, the $PENGU token launched in December 2024 was recorded as one of the largest airdrops ever, contributing significantly to expanding the Pudgy Penguins community. This was because the airdrop recipients weren't limited to just Pudgy Penguin NFT holders but included a wide range of communities from other Ethereum NFT communities to even Solana OG users.

This broad airdrop strategy brought immediate results. $PENGU achieved a market cap of over $2 billion on its first day and secured more than 850,000 holders. This was strategic onboarding that drew hundreds of thousands of potential community members into the ecosystem. Within 8 months after the airdrop, $PENGU has grown to the 4th largest memecoin, and the biggest new memecoin launched in the last 3 years.

Pudgy Penguins isn't letting the PENGU token remain just a plaything for degens, but is using it as a catalyst to maximize Pudgy Penguins' brand exposure. By listing PENGU on major exchanges in every possible country, they're pursuing a strategy to increase awareness even among users with limited DEX exposure. Conversely, by including PENGU in all GIF images distributed on GIPHY, they've designed a circular flow where ordinary people who see Pudgy Penguin images on SNS can purchase PENGU on listed exchanges.

3.3 Institutions: Aggressive Institutional Market Entry

Source: Pudgy Penguins

Pudgy Penguins is pioneering a path no Web3 IP has achieved before—institutional market entry. Pudgy Penguins has appeared in ETF advertisements by major asset managers like VanEck and Bitwise, and these institutions have shown support by changing their social media profiles to Pudgy Penguins. Recently, they had the honor of ringing the NASDAQ opening bell with VanEck, which was unprecedented for a Web3 project.

In March this year, Pudgy Penguins shocked the industry by submitting an ETF application to the SEC through Canary Capital. This ETF was designed as a hybrid structure including both PENGU tokens and Pudgy Penguin NFTs, presenting a new paradigm of NFT financialization. While this might seem somewhat reckless given that even a Dogecoin ETF hasn't been approved, it was likely a strategic choice to open official dialogue channels with the SEC, build relationships with regulatory authorities, and simultaneously increase credibility with institutional investors.

The fact that Mike Novogratz, CIO of Galaxy Digital, and Thomas Lee, CEO of Fundstrat Capital, among others, have changed their profile pictures to Pudgy Penguins clearly demonstrates this. They are figures who not only simply changed their profile pictures but also have such a deep interest in Pudgy Penguins that they publicly boast on X about collecting Pudgy Penguins Collectibles. In particular, Thomas Lee revealed his affection by changing not only his own profile but also the official account profile of Bitmine, where he is CEO, to a penguin. The deep ties with institutional officials are expected to be a significant strength for PENGU in entering institutions.

Pudgy Penguins ETF has been progressing smoothly through the approval process—in June, CBOE submitted a 19b-4 application for Canary Capital's Pudgy Penguins ETF, and in July, the SEC acknowledged Canary Capital's application, officially beginning the review process.

Recently, the Pudgy Penguins team has even taken on an official regulatory advisory role for the U.S. government, a positioning that holds tremendous long-term strategic value. By participating in the regulatory formation process, Pudgy Penguins can create a favorable market environment for themselves while proactively managing regulatory risks. Additionally, the halo effect of being a "government-recognized project" will significantly lower participation barriers for conservative institutional investors.

3.4 Expansion into the Children's Market

Source: Penguin Random House

Pudgy Penguins' greatest strength—"cuteness"—has very high potential for entering the children's market, and as the children's market is growing rapidly, it occupies a crucial position for Pudgy Penguins' long-term success. Recognizing this, Pudgy Penguins is actively attempting to expand into the children's market, with the publication of children's picture books being a prime example. In May this year, Pudgy Penguins announced a partnership with Random House Children's Books, the world's largest children's publisher, to release their first children's book, "Worst Birthday Gift Ever." Since Random House is a major publisher that collaborates with traditional large IPs like Disney, high exposure for the Pudgy Penguin IP can be expected.

Source: Lil Pudgys

Furthermore, since this spring, they have been regularly serializing an animation called "Lil Pudgys Show" on YouTube. Produced in collaboration with TheSoul Publishing, this series depicts the adventures of four penguin roommates living in 'UnderBerg,' a hidden world inside an iceberg. TheSoul Publishing is a global production company that has delivered content to over 2 billion people, and this collaboration is expected to become a powerful channel for Pudgy Penguins to reach child audiences worldwide.

4. Pudgy Penguins' Textbook for Mass Adoption

Pudgy Penguins has broken down the solid wall between Web2 and Web3 through a multi-layered strategy that simultaneously targets all markets. They approach the general public as cute characters, the crypto community as blue-chip NFTs, institutional investors as ETF candidates, and children as lovable animations. Each market appears independent, but they're actually converging toward one massive ecosystem.

This is the most sophisticated 'Trojan Horse' in Web3 history that Pudgy Penguins has created. An office worker watching cute reels on Instagram naturally starts using penguin GIFs on GIPHY, a parent choosing penguin toys with their child at Walmart creates their first on-chain wallet through Pudgy World, and an investor trading $PENGU on an exchange eventually becomes an NFT holder. They each started on different paths, but ultimately all meet within the single universe of Pudgy Penguins.

The key to this success lies in the self-reinforcing growth flywheel Pudgy Penguins has built. Virality starting from social media leads to product sales, which in turn promotes online platform influx, and the formed community activates the token ecosystem. Increased brand value enables bigger partnerships, which again leads to broader exposure. This model is distinctive in that it has completely merged Web2 and Web3 businesses.

Ultimately, what Pudgy Penguins has proven to us is clear: Don't try to forcibly drag people into the future; bring the future to where people are in the present. Complex technology must be wrapped in simple experiences, unfamiliar blockchain in familiar and intuitive concepts.

This is the true textbook for Web3 mass adoption that Pudgy Penguins is writing.