The Pudgy Penguins ecosystem token, PENGU, launched on Solana this Tuesday, soaring into the top 100 cryptocurrencies by market cap. Millions of NFT holders and traders qualified for the airdrop.

Despite the initial excitement, PENGU’s price has fallen sharply throughout the day. 

Pudgy Penguins NFT Suffers From the PENGU Airdrop Craze

At the time of reporting, PENGU had dropped 57% from its launch price of $0.068, reflecting a significant sell-off. Surprisingly, the Pudgy Penguins NFT collection also experienced a similar decline.

According to CoinGecko, the collection’s floor price fell to 17.2 ETH, even as daily sales spiked by 258%. Many users had aggressively bought Pudgy Penguins NFTs in recent weeks to qualify for the PENGU airdrop. Now, these buyers appear to be offloading their NFTs.

The sell-off has been widespread. Following PENGU’s launch on Binance, over 20% of the token supply has already been liquidated, amounting to approximately $9.3 million. The remaining tokens hold a value of $37.7 million.

“The project’s associated wallets (or early investors) are selling large amounts on the chain! So far, $8.74 million worth of PENGU has been sold. The address HoTdB…YL8YZ received 888 million tokens from the token deployment address yesterday (before the airdrop claim), and sold 169 million tokens at $0.05164 in the past hour,” an on-chain analyst wrote on X (formerly Twitter).

Airdrop sell-offs are common, as recipients often cash out profits quickly. However, PENGU’s decline has been unusually fast. If the sell pressure reduces and trading stabilizes, the price could eventually find a floor.

This rapid drop mirrors a similar trend with Movement Network’s MOVE token, which fell by 50% last week after launching on Binance. 

Magic Eden’s ME token, also released recently, faced comparable challenges. Following a swift airdrop, 80% of claimers sold their entire allocation, causing a sharp price drop.

Despite the decline, PENGU retains a market cap of over $1.8 billion. In contrast, Magic Eden’s ME token has a significantly smaller market cap of around $400,000.

Meanwhile, Binance has been facing intense scrutiny for listing low-cap airdrop tokens and meme coins. The initial large-scale sell-offs from these tokens often lead to pump-and-dump concerns, and the largest crypto exchange has been criticized in the past few months for enabling such scenarios.