Pudgy Penguins’ Abstract blockchain is set to shut down on Dec. 15 after parent company Igloo spent tens of millions of dollars funding the consumer-focused network. The decision makes Abstract the second Ethereum-related layer-2 to announce a closure in less than a week, following Blast’s shutdown announcement.
Igloo, the company behind the Pudgy Penguins digital collectibles and toy brand, said it will discontinue Abstract after investing “tens of millions of dollars” in the network. Users have been told to move their assets before Dec. 15, with the team warning that funds left on Abstract after the deadline could become inaccessible.
Abstract launched in January 2025 as an Ethereum layer-2 designed to process transactions separately from Ethereum and send transaction batches back to the main network for verification. Its strategy was built around Pudgy Penguins’ consumer audience and the idea that the brand could help bring mainstream users into crypto applications.
Pudgy Penguins began as a collection of cartoon penguin NFTs, with ownership recorded on a blockchain. The project later developed into a broader consumer brand covering toys, games and merchandise, with products available through retailers including Walmart and Target.
Igloo CEO Luca Netz said the company had financed Abstract for around 18 months. Rather than continue taking resources from the Pudgy Penguins business, Igloo chose to end its support for the blockchain. The company also rejected raising additional money through a token launch or initial coin offering.
The decision followed several challenges, including slowing growth, limited market liquidity, low institutional participation and a relatively small decentralized-finance ecosystem.
Netz said Igloo could have pursued an ICO or launched a token even after losing eight figures on Abstract, but ultimately decided against that approach.
He said the company would instead dedicate its resources to Pudgy Penguins, its digital collectibles and PENGU, the cryptocurrency linked to the brand. According to Netz, maintaining Abstract was no longer worth diverting funds from the core Pudgy Penguins business.
Abstract Struggled to Generate Enough Network Revenue
Abstract said the network had processed more than 325 million transactions and handled $6 billion in decentralized-exchange trading. It also reported 4 million wallets and said applications operating on the chain had generated more than $40 million in revenue.
Brands including Disney and Red Bull Racing had participated in the ecosystem. However, revenue earned by applications does not directly translate into revenue for the blockchain itself.
Applications can collect money from activities such as purchases and trading, while the underlying network generally receives transaction fees for processing that activity. Those fees must be sufficient to cover the chain’s operating expenses if the network is to become financially sustainable.
DefiLlama data showed Abstract generating approximately $3,900 in chain fees over the latest 24-hour period, compared with roughly $39,000 in revenue produced by applications running on the network.
The economics were particularly challenging because Abstract had originally emphasized consumer and entertainment applications rather than DeFi. Netz had previously encouraged developers building financial applications to consider networks such as Berachain or Arbitrum instead, while positioning Abstract around more entertainment-focused products.
Despite a highly anticipated launch, Abstract did not develop substantial liquidity. The network now points to its limited market for DeFi applications as one of the shortcomings behind the decision to close.
The shutdown comes only days after Blast announced on Oct. 2 that it would discontinue its own Ethereum layer-2 because operating costs had surpassed revenue. Blast had previously attracted more than $2 billion in deposits and counted major investors such as Paradigm among its backers.
Abstract still had roughly $76 million in assets according to DefiLlama’s bridged-value measure on Wednesday. Users have until Dec. 15 to transfer their holdings through Abstract’s migration service or bridge them to another network.
