The 1st Reverse Rug Pull, "Blue Chip" NFT project?

BendDAO continues to wreak havoc of blue chip NFTs

Author

Exit Liquidity
August 23, 2022

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Welcome to the Exit Liquidity newsletter, the place to stay up to date on the ridiculous things that happen in the Crypto, NFTs & Web3. If you are looking to join the community check out the AlphaMint Discord where all the degens gather to chat in the dojo.

Another week, another opportunity in Crypto, NFTs and Web3. This weekend it’s been all about the Pudgy Penguins and the inevitable BendDAO blow up.

Let’s start with the fun stuff and the glow up that Pudgy Penguins have been experiencing. It’s the story of the bear market, the reverse rug project recapturing hearts. Okay, a tad dramatic, but it’s been a wild ride from being labeled the next BAYC picked up by news outlets all over the world, to a scam project and back. The Penguins were holding a solid 2.25 ETH floor for most of the week and then it popped up to 4 ETH over the weekend before cooling back down. The floor is currently sitting around 3.7 ETH at the time of writing.

Scrolling through Twitter you can see the Penguin mania in real time. Plenty of influencers donning a Pudgy Penguin pfp or shilling the project by flaunting their new purchases. It was definitely the project with the most eyes and volume (7-day volume is currently 2,000 ETH) over the weekend. So what led to this and the comeback of the project?

Pudgy Penguins have been on a winning streak for a few weeks now. The combination of announcing partnerships with PMI Toys to release their physical toy line of the NFTs, the official Pudgy Penguin marketplace opening in collaboration with @OriginProtocol and the overall leadership of the project from Luca Netz. These have been crucial in turning the tide and views of the project that was originally tainted due to @ColeThereum who still desperately tries to remind people he is one of the creators, but then quickly gets reminded he is a scammer and trash in the NFT space.

pudgy penguin advisory board crypto nfts web3

What really signaled that the Pudgy Penguins are going to be serious players in the NFT and Web3 space, and more than a meme project, was the announcement of the Penguins Advisory Board. The Penguins are not messing around, this board is stacked. Here’s the list:

Alex Svanevik - CEO of NansenSanjay Raghavan - Head of Web3 at RoofstockRJ Cilley - COO of SAKS Fifth Ave Jordan Sterlin - Partnerships at META Chet Kuchinad - CPO at Save The Children, Previously at Nike & StarbucksBee Ngyuyen - General Partner Limited Ventures Jess Richardson - Head of Licensing at Hasbro Paolo Moreno - Adviser at SFX Ent & Fashion Nova Pentoshi - King of the Penguins

The experience and positions held on this list is insane. To us, this shows they are thinking well beyond NFTs which every project should be doing. The Penguins have a chance to be one of the breakout NFT projects much like Bored Ape Yacht Club. Seeing how and what BAYC owners have been doing with their IRL licensing, it shows what is possible. Now take those ideas and put a solid team, community and project behind them. That is what the Pudgy Penguins are doing.

We also cannot rule out the cuteness and meme factor when it comes to the project. The cuteness plays tenfold in physical toys and collectibles. We have no idea what they plan to do with the toys, but it could be a massive revenue stream for the project. We’re talking about an industry that does $100B+ annually and they have a product that can align with several different demographics within that space. The Penguins are fun and cute as well. They will grab attention on shelves unlike the Bored Apes. We think most kids would want to cuddle with a cute, fluffy penguin over a less than enthusiastic looking ape.

The future of Pudgy Penguins is looking good. What’s crazier to us is that this boolish comeback is happening during a very bearish market phase. We can only imagine what would be happening if this was happening back in January 2021. Given all things, the price for a Penguin is still semi-affordable, but we get it, it’s a lot of ETH to shell out. If you feel like you missed the run and still want to get some Pudgy Penguins exposure, you haven’t been left behind. You can check out the Lil Pudgys which are currently sitting just above a .2 ETH floor at time of writing.

bendDAO health factor list nfts crypto web3 bayc mayc azuki clone x doodles borede ape loan collateral eth

The BendDAO, Ape backed collateral loans played out almost exactly how @CirrusNFT predicted it would. To sum it up fast, it’s not going well. So far a few mutants have been forced to auction, health ratings have continued to go up (not down like people said would happen) and there was a “bank run” on the BendDAO treasury with 15 wETH ($25,081) left in the wallet that had 18,000 ETH ($29,160,000).

If you have no idea what’s going on or want to catch up, here is a great thread from @punk9059. Definitely read it for the in depth analysis, but the TLDR is that BendDAO has no money, those who lent money to others can't pull any money out, many NFTs have gone to auction with zero bids on them and nobody has any idea what’s going to happen.

Now the BendDAO founder has proposed emergency changes to the protocol. This will basically help keep project floors where they are for another month or so and prevent roughly 600+ BAYC, MAYC, Doodles, Clone X and Azuki from being liquidated. Again, we are giving you the very abbreviated version of this. There’s a lot more to it so please read the threads to really grasp the entirety of the situation.

For those that are not involved in any way, what does this mean for you? It means some great deals on "blue chip" NFTs are coming up. They will either happen soon as within the next week or more towards the end of September depending on protocol changes. It also means that many of the “blue chip” projects will more than likely see floor prices come down. This event can still spook the market and create an even mor eintense bearish sentiment so be mentally ready for that. You should also have a strategy depending on how price action affects the markets via ETH and project floors. Don’t get caught up in your emotions, this is how you will catch a bag.

Crypto

NFTs

AlphaMint member @chad_degen shared with the dojo the epic reveal fail from Isekai Meta. For those that don't know, one of the tweets shared in our Discord server sums up how badly the project fumbled the bag:

Iseka Meta tweet mess up fail scam nft duplicate tokens web3 crypto

The project claims it was a generation script bug that caused the issue of the duplicate artwork and metadata. The floor price was hovering around .45 ETH pre-reveal and fell to .15 ETH after the reveal. Users claim they found more than 1,000 NFTs that were copies. And what NFT project fail is complete without some killer memes?

Isekai Meta reveal meme fail nft scam rug fraud crypto NFTs web3

Web3

Disclaimer: The Exit Liquidity Newsletter is meant to be an informational and entertaining way to share interesting things found in and around the Crypto, NFT and Web3 space. Nothing in this newsletter should be taken as the contributor's, Exit Liquidity's or AlphaMint's personal opinion or views. Nothing in this newsletter constitutes as professional and/or financial advice. Cryptocurrencies and crypto-related assets can be extremely risky investments, invest at your own risk.

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