The PENGU token, launched by the Pudgy Penguins NFT project, has had a turbulent debut, its value plummeting over 50% just hours after the much-anticipated airdrop on Dec. 17. Initially, the token's market cap was around $2.8 billion, but it quickly dropped to below $2 billion. PENGU, which trades on Solana, is part of the Pudgy Penguins ecosystem, which also includes various other NFT collections such as Lil’ Pudgys and Pudgy Rods.

Pudgy Penguins distributed about half of the 89 billion PENGU tokens to its community, with 26% allocated to NFT holders. However, despite the high expectations, the price of PENGU fell dramatically from $0.068 to $0.031, reflecting heavy sell-offs shortly after its release.

Along with the price drop, the project saw significant sell-offs. Over 20% of the total supply of PENGU tokens was liquidated, amounting to around $9.3 million. Some wallets linked to early investors sold large quantities of the token, contributing to the market's volatility. The sell-off also led to an imbalance between buyers and sellers, with the number of sellers significantly outpacing buyers. The intense activity in the early hours resulted in a large trading volume of $425 million.

The sharp drop in PENGU’s value also coincided with the decline in the price of Pudgy Penguins NFTs. The floor price for a Pudgy Penguin NFT, which had been as high as 36 ETH before the token’s launch, dropped to about 16 ETH. Many users who had bought NFTs to qualify for the token airdrop began offloading their holdings, adding to the downward pressure. Despite these losses, Pudgy Penguins remains one of the most prominent NFT collections, having sold millions of Pudgy-branded toys through retail stores like Walmart.

The PENGU token launch was not without technical issues. Some users reported missing portions of their tokens, while others had difficulty using the claim website. The website, which was flagged as a potential security risk by crypto wallet provider MetaMask, also experienced a high volume of traffic, causing delays. Despite these issues, the Pudgy Penguins team reassured users that there was still time to claim tokens, with an 88-day window.

Though the PENGU token initially generated excitement, its early performance has sparked concerns about its future, especially as the price of Pudgy Penguins NFTs continues to fall.