Pudgy Penguins, the third-largest NFT collection by market capitalization, announced Thursday evening that it's launching a new token called PENGU on the Solana blockchain before the year ends.

The announcement comes in as Pudgy Penguins' NFT collection floor price hit a new all-time high amid surging crypto market valuations.

According to the project, it will distribute 88 billion PENGU tokens to NFT owners who have Pudgy Penguins, Lil Pudgys, Pudgy Rods, and other collections associated with the project.

The token's supply will be allocated based on the following distribution: 23.5% is reserved for existing Pudgy Penguins NFT holders, while 22.02% is reserved for the broader Solana and Ethereum communities. An additional 12.32% will provide liquidity on decentralized exchanges.

Pudgy Penguins launched in July 2021 with 8,888 NFT pieces, with the "8" working as a metaphor alluding to how the comical characters look.

Based on the announcement video shared by Pudgy Penguins, the PENGU token is considered through its lore as the "Master Coin," which the core team of seven will "hatch" from a golden egg as a symbol of their "collective might."

Decrypt has reached out to Pudgy Penguins on its choice of Solana.

Shifting tides

The collection's floor price surged more than 40% this week to reach a new all-time high above $62,000, surpassing its previous peak of $57,000 in February 2024, Decrypt reported Thursday.

The increase coincides with Bitcoin's breakthrough above $100,000 and reflects broader market momentum affecting major NFT collections.

Pudgy Penguins has maintained a strong market presence despite historical NFT market volatility, with a total market capitalization of around $550 million.

The brand has expanded beyond digital assets, generating over $10 million in physical toy sales through major retailers, including Walmart, Target, and Walgreens.

The PENGU token launch represents a strategic pivot as market attention shifts from NFTs to fungible tokens and meme coins.

On X (formerly Twitter), Pudgy Penguins pointed to this shift with a post saying: "Tides are shifting. A new beginning is upon us."

The move addresses historical NFT liquidity challenges while leveraging Pudgy Penguins' established brand presence, which includes over 3 million social media followers and 32 billion views on Giphy.

Crypto's bull run is also driving NFTs higher, Decrypt reported on Monday. This surge has helped push the overall NFT market capitalization to about $8.6 billion, according to CoinGecko data, while weekly Ethereum NFT trading volume doubled to exceed $101 million. 

The project's transformation began when Luca Netz acquired it in 2022, expanding from a struggling NFT collection into a prominent crypto-native brand. Netz has projected ambitious growth, suggesting a potential floor price target of 200 ETH (approximately $780,000 at current rates) during this market cycle.

The project plans to eventually integrate with Abstract, an upcoming Ethereum Layer-2 solution, though the immediate focus remains on establishing PENGU's presence in the Solana ecosystem.

Edited Sebastian Sinclair