PENGU Trader Transforms $10k into Just $3 with Pudgy Penguins Tokens

One unfortunate trader ended up losing $10,000 by purchasing Pudgy Penguins’ PENGU tokens just before the NFT-tied airdrop.

Let it snow, or so this unfortunate trader believed when attempting to front-run the Pudgy Penguins crypto airdrop on December 17. While the Pudgy Penguins (PENGU) token skyrocketed past a $3 billion market cap mere hours after its launch, one investor bought the token at an astonishing $14 trillion valuation.

According to on-chain data and community reports, their initial $10,000 investment plummeted to less than $3 within minutes.

From $10K to $3: PENGU trader struck by iceberg

Based on on-chain data, an anonymous trader seemed to have executed a sizable PENGU order on Jupiter just before the token became operational.

Such traders, known as “snipers,” leverage sophisticated trading tools to swiftly acquire newly launched tokens. Unfortunately, a malfunction in Jupiter’s decentralized exchange led this potential PENGU sniper to a low liquidity pool.

DEX aggregators like Jupiter determine crypto prices using an automated system that adjusts price tags based on demand, known as a bonding curve.

Mischievous actors possessing technical skills may exploit this system to create extremely volatile liquidity pools. As anyone can create a liquidity position, traders sometimes purchase tokens from incorrect contracts, leading to substantial losses.

In this instance, the trader likely unwittingly invested in one of these manipulated liquidity pools without confirming the contract address or the token’s market cap. After exchanging 45 wrapped Solana (SOL), the buyer received only 78 tokens, valued at under $5 at the time of the report. Despite the mistake, the trader ultimately acquired 62,585 PENGU coins worth around $2,000.

Pudgy Penguins roadmap

The launch of a token marked a significant recovery for Pudgy Penguins during a broader renaissance in non-fungible tokens. The NFT collection, owned by Igloo Inc., ranked among the top three NFT projects by market cap. At one point, a single Pudgy NFT was priced higher than Bitcoin.

Following the airdrop, the Penguin-themed blockchain art pieces traded on average for $60,000, before experiencing a 50% correction that adjusted its floor price to 15.63 Ether (ETH).

Looking forward, Igloo Inc.’s roadmap involves activating PENGU features on Ethereum’s blockchain. The company also aims to launch its layer-2 Abstract Chain network. The total supply of Pudgy Penguins’ PENGU token is 88.88 billion, with seven million addresses eligible for the airdrop.

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