NFT Community Erupts After Pudgy Penguins NFT Sells For $600k

Jimmy Aki
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There have been several arguments over the viability of non-fungible tokens (NFTs) – especially now that the crypto market appears to be rebounding from a significant bear market. With coin prices down, it appears that NFTs are not worth what they used to be, and many sceptics have called the end of the market.

However, while general trading volumes for NFTs are still lower than they used to be before the bear market, some NFT collections, like Pudgy Penguins, have continued to post impressive numbers – so much so that some sceptics are now questioning their worth.

Why Not Just Buy Land Instead?

Earlier this week, a Twitter user took to the social media platform to announce that he had purchased one of the best NFTs to buy in the up-and-coming Pudgy Penguins collection. Simply captioning the image, “It’s home”, the user revealed that he had purchased Pudgy Penguin #6873.

While this would be a normal purchase in a regular market period, the Pudgy Penguins buy seems to have sparked some controversy among members of the NFT community. The biggest issue appears to be that the NFT sold for an astounding 400 ETH – about $628,000 when the user bought it.

Most sceptics appeared to have been seething because the NFT purchase seemed too outlandish – after all, there seem to be much better things a person could purchase for $628,000 than a simple picture of an animated penguin.

Some also pointed out that the Pudgy Penguin in question was the only one in the collection facing the left side, while others faced the right. It appears to have been a subtle jab at the notion that this distinction does not justify the high price paid for the piece, given that NFT enthusiasts typically seek out the uniqueness of each item.

However, in contrast to the prices that some NFTs commanded in the past, this transaction seemed somewhat modest. Data from CoinGecko shows that the Bored Ape Yacht Club NFT collection has a floor price of 66.9 ETH – about $108,000 at press time. The CryptoPunks collection has a similar floor price, standing at 66.45 ETH – about $107,000. Compare that to the Pudgy Penguins collection, which currently has a floor price of just 3.8 ETH – or about $6,100.

NFT IP Rights Might Not Even Be Real

While some sceptics have questioned the viability of such an investment – and even went as far as calling the purchase an attempt at money laundering, NFT enthusiasts continue to believe that these tokens are worth the high prices they command because of the intrinsic value they offer.

For most people who invest in NFTs, obtaining full ownership of the artwork they purchase as NFTs – including the intellectual property rights – will make the purchases worth it. However, a recent report from blockchain investment giant Galaxy Digital has refuted that claim.

Earlier this month, the Galaxy Digital report highlighted that while NFTs are sold on the promise of “ownership” and direct intellectual property rights to their underlying art, many of these collections don’t transfer the full rights to the buyers after purchase.

The report analysed the terms of several major projects – including the Bored Ape collection and metaverse giants like The Sandbox and Decentraland. And in its summary, Galaxy Digital explained that most NFT collections convey “zero intellectual property ownership of the underlying content”. While some NFT creators have adopted the Creative Commons license as a workaround, they have inadvertently detached the IP rights from their NFTs, making it impossible for their buyers to defend exclusive rights to the tokens they’re purchasing.

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About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.