PENGU - the new token of the Pudgy Penguins NFT collection - is becoming the focus of attention in the crypto market. With the developments surrounding the airdrop, token trading, and development plans, PENGU has created many opportunities but also not a few risks for investors.
"Losing" 10,000 USD due to buying PENGU at a 14 trillion USD market capitalization
A Bittersweet Situation
An "unlucky" trader turned $10,000 into less than $5 in just a few seconds when trading the PENGU token.
somebody bought $PENGU @$14T mc turning his $10k to $5 in seconds lmfao pic.twitter.com/R9X9tOu2fn
— bx1 (@bx1core) December 17, 2024
This person made the trade about 5 minutes before the official token launch. Specifically, he swapped 45 WSOL (about $10,000) for PENGU, but only received 78 tokens, worth about $3.
The trade order seems to have been routed to an unofficial liquidity pool on Raydium, leading to buying PENGU at an inflated price due to low liquidity. At that time, the market capitalization of PENGU was inflated to $14 trillion.
lmao what the fuck https://t.co/SmIC6Rv6Q9 pic.twitter.com/f8605vzCNp
— Delta (@deltaxbt) December 17, 2024
The pricing mechanism on decentralized exchanges (DEXs) often uses bonding curves, causing prices to rise rapidly when liquidity is low and demand is high. This leads to large price fluctuations, posing risks to traders, and also causes slippage - the executed price deviating significantly from the expected price.
In addition, the early disclosure of the token's contract address has enabled some individuals to establish unofficial liquidity before the token's launch. Some tokens that were leaked earlier helped trigger early trading, causing losses for those who did not carefully check the market capitalization or the origin of the token.
Lessons for Traders
Before the PENGU launch, the Jupiter exchange warned users to "be patient, stay safe, and wait for the official version."
$PENGU: Verified!
— Jupiter 🪐 (@JupiterExchange) December 17, 2024
Token will launch at 8:05am EST in 9.5 hours.
Stay patient, stay safe, wait for the real one. 🐧
2zMMhcVQEXDtdE6vsFS7S7D5oUodfJHE8vd1gnBouauv pic.twitter.com/2jQ26VyOkG
However, traders still face risks when trading new tokens on the Solana blockchain. This ecosystem allows for the easy creation of fake versions of tokens. For example, on the SolFlare wallet, there are more than 20 unverified tokens with names or tickers similar to PENGU, targeting inexperienced investors.
Other risks when investing in memecoins include:
Loss of private keys;
Mistaken transactions;
Trading of counterfeit tokens.
However, the trader who experienced the incident above was able to execute some valid trades in time and is now holding 62,585 PENGU (worth about $2,000) along with other memecoins.
Tokenomics and Future Roadmap of PENGU
As reported by Coin68, PENGU has a total supply of 88.89 billion tokens, of which 23.5% is allocated for the airdrop program. The remaining portion will be used for community development, rewarding the team and early contributors, as well as providing liquidity for DEX platforms...
After its launch, PENGU has been listed on major exchanges such as Binance, Bybit, and OKX just last night (12/17). Immediately after the listing, PENGU surged to $0.068 per token, but quickly reversed and fell back to around $0.032. Since last night, the Pudgy Penguins token has dropped more than 50%.
PENGU price movement in the last 24 hours, screenshot from CoinGecko at 10:15 AM on 12/18/2024
Pudgy Penguins, an NFT collection owned by Igloo Inc., is currently the third largest NFT project in the market. While just last week, Pudgy Penguins overtook BAYC to become the second largest in terms of market capitalization.
Although the floor price of these NFTs has dropped more than 50% after the airdrop, to an average of 15.63 ETH (~$60,000), the price has still increased by more than 50% in the past 30 days, confirming the appeal of this collection.
Pudgy Penguins NFT price movement, screenshot from NFT Price Floor at 10:10 AM on 12/18/2024
Regarding the airdrop program, about 7 million people are eligible to receive PENGU tokens within 88 days. After this period, the unclaimed tokens will be burned to reduce the circulating supply.
In the future, PENGU will be integrated with Ethereum and deployed on the Pudgy Penguins layer-2 solution called Abstract, which is still in development. These advancements promise to unlock many development potentials and applications for PENGU within the ecosystem.
Overall, PENGU is still one of the most notable projects at the moment, resonating between the influence of the Pudgy Penguins NFT and the massive Airdrop campaign. However, the recent transaction incidents are a warning for investors to thoroughly check and be patient when participating in transactions.
Coin68 summary
