We’re dropping another special weekend edition.

This time, we take a deep plunge into two buzzing NFT projects that have everyone talking – the Pudgy Penguins and Zynga’s Sugartown. But wait, there’s more! Remember Friend Tech? We're still grinding away, meticulously curating the juiciest takes just for you.

Enjoy!

Pudgy Penguins Goes to Walmart

Pudgy Penguins announced this week that its toys will be sold across 2,000 Walmarts in the US, effective immediately. It marks a significant move for NFTs to enter the mainstream retail space in a big way.

• Special Placement: Pudgy Penguins secures a prime spot on Walmart’s Pallet Program, the most valuable real estate in the store.

• Walmart's Reach: The retail giant witnesses 240M weekly customer visits. In 2022, Walmart's toy revenue stood at $29.2B, capturing 20-25% of all retail toy sales.

• Projected Sales: Luca predicts over $10M in revenue for Pudgy Penguins this year. This translates to over 500,000 toy sales, especially with Q4 being a festive season.

• Branding Concerns: Collaborating with Walmart can be a double-edged sword, bringing in quick sales but posing a branding challenge. Walmart's "cheap" & "budget" image might affect the perception of a budding character IP.

• Digital Engagement: Each toy will come with a QR code. Upon scanning, buyers can unlock NFTs in the 3D, gamified Pudgy World metaverse, emphasizing the fusion of physical and digital experiences.

• Benefit to NFT Holders: It's currently unclear how NFT holders might benefit from this business success. Directly linking financial metrics with the NFT's value might pose challenges.

• Identity & Community: The real value driver for the NFT could be the sense of identity and community. As the Pudgy Penguins brand gains traction, the elite "Pengu" club could become a coveted circle.

Pudgy Penguins stands out as the first PFP team to build a significant business outside of selling NFTs. Their blend of the physical and digital realms could set the tone for future brand strategies.

Quick Notes on SugarTown, the Web3 game platform by Zynga.

• Ora NFT holders can stake their NFTs to earn in-game "energy," which is non-tradable but can be used to play Sugartown games and win prizes.

• Zynga has earmarked 3,999 ORAs in a rewards reserve, aimed at incentivizing gameplay and attracting new gamers to the platform.

• The first game on the Sugartown platform will be in closed-beta (NGMI Alpha) for a limited number of testers starting on September 30th, offering leaderboard rankings and raffle-based rewards. It is 2D sidescroller and you earn sugar crystals by beating each level (but you have to expend energy from staking to play. Top holders of sugar crystals will be rewarded with Oras.

• Beyond gaming, Zynga has aspirations for Sugartown to be a transmedia IP, signaling a multi-dimensional storytelling approach that extends outside the gaming realm.

• The project has been under development for 18 months, spearheaded by Zynga Web3 Chief, Matt Wolf. VentureBeat’s interview with Matt Wolf seems quite positive, he has a big vision and understands Web3.

• Features characters from existing Zynga IPs like Farmville.

• Sugartown games are targeting high-value crypto users, hardcore gamers & speculators who are already familiar with web3, rather than the traditional hypercasual market which is not ready yet

• According to Naavik: the only way this project will likely demonstrate any reasonable level of monetization is by leveraging the IP in non-web3 games distributed through mobile app stores or by later on turning Sugartown into the kind of brand Zynga can sell merchandise for

The Best Friend Tech NFT Alpha (25 Sep - 1 Oct)

Before we dive in, just 2 quick notes:

• None of this is financial advice. Please do your own research

• We have attributed and linked all of the quotes below to the original sources. Please consider buying their key on Friend Tech to support them.

On Gaming

Degentraland on Yuga Lab’s Legends of the Mara

“No it's not fun. It's pure strategy based on asset allocation. Think of it like gamified staking. Yuga is just trying to incentivize users to hold their deeds + Kodas while they build the Otherside.

Building the model will take a while. There are a bunch of different inputs (including hatched vessel rarities, which we won't have for 6 days) and we'll have to make assumptions around relative value of fragments (farming) vs. loot (hunting). But this game is 100% solvable. Only adjustments we'll need to make (which granted will change the model drastically) will come from other players' allocations. Fragments are limited so we'll need to weigh the possibility of fragments running out against the value of getting on hunting leaderboards.”

Raymond Chng on On-chain games

“Onchain games have to have new mechanics. For example take wordle3, u have to bid for letters. Changing how wordle is played.

Also, for certain games, assets are on-chain. So it’s easier for UGC. People can build different gameplay exp on top of existing ones. Supercharging UGC

Also, let’s think about things from an investor angle. As prev mentioned, game worlds will potentially become real economies. So can you own toll gates, buildings where it charges people to go into. They have to pay rent, etc.

Investors can now invest in buildings, assets/infra in virtual worlds

Roblox is an example of a closed economy/eco where creators get a cut. However, creators get 30% or so. For the use of IP, there are some stricter rules.

Whereas, with web3, nfts. It is easier to enable composability (supercharge UGC as mentioned) in terms of IP laws, usage, etc.

In web2, you need lots of approval and stuff for use on IP. In web3, people can build good IP and then easily be re-usable. And it should get better. This is a general advantage right now I guess”

On Generative Art

Linus Caldwell: “Danielle King and Maneki super underrated AI artists.”

akaStevey on why she likes the artist diewiththemostlikes: “The moment I finished watching his segment in the last grails, I knew he’d pop off eventually. When my husband who’s not into art or NFTs kept sending me his ig posts, I saw just how marketable/normie friendly he could be. Once I heard about the flea market and generative concept with transient labs, I realized it was gonna happen faster than I expected. I’m not kidding - behind the satire is a very intelligent and intentful artist. That’s about all you can ask for in a breakthrough artist 🔥”

Cyborgnomad: “1confirmation NFT fund ($100M fund size) has been deploying large sums at Sotheby's and on-chain to buy art grails. Deployed ~3m so far for:

• 5x Beeple “Politics is bullshit“ • 5x Fidenzas • 4x Ringers • 1x Autoglyph • 6x Where my Vans Go “

Others

IAN on Mantle

“spoke to friend at Mantle today. impressed with their vision and plan for the chain.

• expect mETH to launch soon (1-2 months). mantle will deploy their treasury eth (9figs) into stETH and mETH for rev-generating POL

• expect ethena and ondo stablecoins soon (yield stablecoins)

• expect top tier dex and perp dex soon (no timeline yet, no tokens = airdrop opportunity)

imo mantle eco will be a late q4 / early q1 '24 play

they're working on bridging infra + using MNT for bystarter launches. not as seamless as coinbase x base though. coinbase wallet + onchainsummer campaign looks pretty good for onboarding (not sure actual conversion from coinbase -> base though”

That's it for today folks. If you want more, follow us on Twitter (@the_metadata). If you were forwarded this newsletter, you can subscribe with just one-click:

Disclaimer: This newsletter is for educational purposes only. None of this is financial or investment advice. It is not a solicitation to buy or sell any assets. Minting and buying NFTs is risky. Please do your own research.