Pudgy Penguins navigate market swings as NFT prices dip and Abstract debuts

Pudgy Penguins' floor price declined to 10.75 ETH on Feb. 1 from its December peak of 29 ETH, marking a 63% decrease following several significant ecosystem developments. 

The saga began after the Dec. 5 announcement of $PENGU, the project's Solana-based memecoin, which initially sparked a rally in NFT prices. Following the token generation event on Dec. 17, $PENGU reached a market cap of $2.7 billion before retracing to $940 million, with the token price dropping from 4.3c to 1.4c.

The project's expansion continues with Abstract, a new Ethereum Layer 2 network developed by Igloo Inc., launching on Jan. 27. Some holders who were hoping for a potential Abstract token airdrop were disappointed as the launch coincided with a 37.5% decrease in Pudgy Penguin floor prices, from 16.6 ETH to 10.7 ETH. The trading volume of the NFT has maintained relative stability at approximately 15 million per week since the $PENGU TGE.

The Pudgy Penguins' token launch has influenced broader NFT market strategies. Other prominent collections like Azuki have followed suit with their own token launches, such as $ANIME. ANIME launched with a market cap of roughly $500 million before a consistent decline toward $250 million, where it sits at the time of writing. The Azuki NFTs suffered a similar fate.

Looking ahead, Pudgy Penguin holders still have some catalysts in the coming weeks. Abstract has the potential to implement additional holder benefits through its 'experience' (EXP) system. Holders currently earn a multiplier for exp, which will likely be used to determine their Abstract token allocation. The return of retail users to crypto ecosystems makes some holders hopeful of a 2021-esque NFT market run.

This is an excerpt from  The Block's Data & Insights newsletter . Dig into the numbers making up the industry's most thought-provoking trends.