PENGU trader flipped $10k to $3 on Pudgy Penguins tokens

One unlucky trader lost $10,000 by purchasing Pudgy Penguins’ PENGU tokens shortly before the NFT-related airdrop.

Let it snow, or so he thought, while trying to front-run the Pudgy Penguins crypto airdrop on December 17th. Just a few hours after the Pudgy Penguins (PENGU) token was launched, its market value rose to over $3 billion, and an investor bought this token. A coin with a ridiculous capitalization of $14 trillion.

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

PENGU trader from $10k to $3 sunk by iceberg

Following on-chain data, it was revealed that an unknown trader placed a large PENGU order on Jupiter shortly before the token went live.

Often called “snipers,” these types of traders use advanced trading tools to quickly collect newly launched tokens. However, a glitch in Jupiter’s decentralized exchange redirected this PENGU sniper to a low liquidity pool.

DEX aggregators like Jupiter calculate crypto prices using a system known as the binding curve, which autonomously adjusts price tags based on demand.

Tech-savvy bad actors sometimes manipulate this system to create highly volatile liquidity pools. Since anyone can create a liquidity position, investors occasionally purchase tokens from the wrong contracts and incur significant losses.

In this case, the trader likely purchased one of these manipulated liquidity pools without verifying the contract address or token market value. After exchanging 45 wrapped Solana (SOL), the buyer received only 78 tokens valued at less than $5 at the time of reporting. The trader, who was unaffected by the error, eventually acquired 62,585 PENGU tokens worth approximately $2,000.

Chubby Penguins road map

The launch of a token crowns Pudgy Penguins’ latest turnaround in a broad non-fungible token renaissance. The NFT collection owned by Iglo Inc. was one of the top three NFT projects by market cap. A single Pudgy NFT cost more than Bitcoin at one point.

Penguin-themed blockchain artworks traded at an average of $60,000 after the airdrop, with the base price set at 15.63 Ether (ETH) with a 50% correction.

Looking ahead, Igloo Inc.’s roadmap includes enabling PENGU features on Ethereum’s blockchain. The company also plans to launch a layer-2 Abstract Chain network. Pudgy Penguins’ PENGU token has a total supply of 88.88 billion tokens, with seven million eligible addresses for airdrop.