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Crypto Fall Brings Chaos to the Popular Pudgy Penguins NFT Land

The infighting raises governance questions surrounding NFT communities, especially what happens when founders fail to deliver on their promises.

A flock of digital penguin avatars or "pengus" part of the popular non-fungible token community Pudgy Penguins want to reportedly buyout its founders amid a crypto flash crash.

Pudgy Penguins is an NFT subcategory of cryptocurrencies that represents ownership in a unique asset, collection of 8,888 Penguins on the ethereum ETH blockchain that was launched in July last year.

The collection of 8,888 chubby and flightless Antarctic creatures – donning accessories such as baseball caps and fishing rods – were available to mint last July for 0.03 ETH, the native currency of the ethereum blockchain, and sold out in less than 20 minutes.

Overall daily NFT sales peaked in late August, at $411.5 million, according to data tracker NonFungible. Daily sales have since fallen to around $57 million with the crypto market losing about 40% of its market value since reaching a record high in early November.

Ether, the world's second-largest cryptocurrency, touched its lowest level since October. Most NFTs are purchased and sold with Ether.

The average daily price of a Pudgy Penguin NFT was about $4,251.47 Tuesday as of press , compared with $26,055 in August, according to NonFungible.

Buying community NFTs like Pudgy Penguins typically entitles users to certain benefits, including membership in a shared Discord server or access to a private Telegram channel, where you can talk with other owners. 

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Pudgy Penguins Co-Founder Clayton Patterson described the community as: “There are all these ways to tell everyone that you’re wealthy. But a lot of those things can actually be faked. And with an NFT, you can’t fake it," in an interview to The New York Times in August last year.

The drama and riot in the community has been caused by multiple factors including unfinished promises and lack of transparency at the top.

According to Twitter user and Pudgy Penguins owner @9x9x9eth, Pudgy Penguins co-founder Cole Thereum “promised a game, a token, an educational book on NFTs and more” to the community last September.

Last week, the project received buyout offers as high as 750 ETH ($2.3 million) from prominent individuals in the NFT market, Reuters reported.

Anonymous Pudgy Penguins holder 9x9x9, who own 242 pudgy penguins, had posted that he’d held talks to buy the project, and declined.

Pudgy Penguins “could be the first pure decentralized PFP project ever,” 9x9x9 told CoinDesk.

Requests for comments on the ownership status of Pudgy Penguins remained unanswered at the time of press.