Abstract, the consumer-focused blockchain associated with Pudgy Penguins, will shut down on Dec. 15 after its parent company, Igloo, spent tens of millions of dollars backing the network. The closure follows Blast’s decision just days earlier to discontinue its own Ethereum layer-2 after determining that the network was no longer economical to operate.
The company behind Pudgy Penguins said it is ending Abstract after funding the blockchain at a cost of “tens of millions of dollars,” making it the second Ethereum-related network to announce a shutdown in less than a week.
Abstract will stop operating on Dec. 15. Users have been advised to withdraw or migrate their assets before that date, with the team warning that funds remaining on the network afterward could become inaccessible.
Abstract is an Ethereum layer-2, a network designed to process transactions separately from Ethereum before submitting transaction batches to the main blockchain for verification. It launched in January 2025 with the aim of using Pudgy Penguins’ consumer following to encourage broader adoption of crypto applications.
Pudgy Penguins initially gained attention through its collection of cartoon penguin NFTs, whose ownership is tracked on a blockchain. The project later expanded into a wider consumer brand that includes toys, games and merchandise, with products available through retailers such as Walmart and Target.
Igloo CEO Luca Netz said the parent company supported Abstract for approximately 18 months. However, Igloo ultimately decided that continuing to finance the blockchain would come at the expense of the Pudgy Penguins business. The company also rejected the option of launching a token or conducting an initial coin offering to raise additional funds.
Among the problems cited by the team were slowing growth, limited trading liquidity, weak institutional participation and a relatively small decentralized-finance ecosystem.
Netz said that even after the company had lost eight figures on the project, it could have raised additional capital through a token launch or ICO but chose not to do so.
He added that Igloo will now concentrate its resources on Pudgy Penguins, its digital collectibles and PENGU, the cryptocurrency associated with the brand. According to Netz, continuing to fund Abstract could no longer be justified at the expense of the core Pudgy Penguins business.
Abstract’s Revenue Challenge
Abstract reported more than 325 million transactions, $6 billion in decentralized-exchange trading volume and 4 million wallets. The network also said applications operating on the blockchain had generated more than $40 million in revenue, with companies and brands such as Disney and Red Bull Racing participating.
Those application revenues, however, do not directly become revenue for the underlying blockchain. Individual applications can earn money through purchases or trading fees, while the network itself receives transaction fees for processing activity.
DefiLlama data showed Abstract generating about $3,900 in chain fees during the latest 24-hour period, compared with approximately $39,000 in revenue generated by applications on the network. The fees collected by the blockchain still need to cover its operating costs before they represent any profit.
Abstract’s original strategy also focused on consumer applications rather than financial products. Netz had previously encouraged developers building entertainment-focused projects to use the network while directing DeFi developers toward other chains. Despite a heavily promoted launch, Abstract failed to attract substantial liquidity.
Abstract now counts its limited market for DeFi applications among the issues that contributed to the shutdown.
The closure comes shortly after Blast announced on Oct. 2 that it would discontinue its layer-2 network because operating the chain cost more than it generated in revenue. Blast had once attracted more than $2 billion in deposits and had prominent investors such as Paradigm backing the project.
Abstract still held roughly $76 million in assets under DefiLlama’s bridged-value measurement on Wednesday. Users have until Dec. 15 to move their assets using Abstract’s migration service or bridge their holdings to another network.
