Pudgy Penguins’ Abstract Ends Operations in Second Ethereum L2 Shutdown This Week

Pudgy Penguins’ parent company Igloo is shutting down its Abstract blockchain on Dec. 15 after spending tens of millions of dollars to support the network. The decision makes Abstract the second Ethereum-linked layer-2 to announce a shutdown in less than a week, following Blast’s decision to close its own network.

Abstract users have been asked to move their assets before the Dec. 15 deadline. The team warned that assets left on the blockchain after the shutdown could become inaccessible.

Abstract launched in January 2025 as an Ethereum layer-2, processing transactions separately before sending batches to Ethereum for verification. The project was built around the idea that Pudgy Penguins’ large consumer audience could help introduce everyday users to blockchain-based applications.

Pudgy Penguins started as a collection of cartoon penguin NFTs, with ownership recorded on a blockchain. The project has since developed into a broader brand covering toys, games and merchandise, with products sold through retailers such as Walmart and Target.

Igloo CEO Luca Netz said the company funded Abstract for roughly 18 months before deciding that continued investment was no longer justified. Igloo chose not to divert additional money from the Pudgy Penguins business and also rejected the idea of raising funds through a token launch or ICO.

The team cited stalled growth, thin trading markets, limited institutional involvement and a relatively small decentralized-finance ecosystem as factors behind the shutdown.

Netz said Igloo could have launched a token or pursued an ICO after losing eight figures on the project, but the company ultimately decided against those options. Instead, it plans to concentrate on Pudgy Penguins, its digital collectibles and PENGU, the cryptocurrency associated with the brand.

He said continuing to fund Abstract could no longer be justified if doing so required taking resources away from the Pudgy Penguins business.

Abstract’s Activity Was Not Enough to Sustain the Network

Abstract reported more than 325 million transactions, $6 billion in decentralized-exchange trading volume and 4 million wallets. It also said applications on the blockchain had generated more than $40 million in revenue, with brands such as Disney and Red Bull Racing participating.

Those figures do not mean Abstract itself received $40 million in revenue. Applications can earn money through purchases and trading fees, while the underlying blockchain collects transaction fees for processing activity.

DefiLlama data showed approximately $3,900 in chain fees during the latest 24-hour period, compared with about $39,000 in revenue generated by applications operating on Abstract. The blockchain’s fees must cover its operating expenses before they can produce a profit.

The network had also deliberately focused on consumer and entertainment applications rather than DeFi. At launch, Netz encouraged developers building financial applications to consider networks such as Berachain or Arbitrum and positioned Abstract as a place for more consumer-oriented products.

Despite a heavily promoted launch, Abstract failed to develop meaningful liquidity. Its limited market for DeFi applications is now among the shortcomings cited by the team.

The shutdown comes shortly after Blast announced on Oct. 2 that it would close its layer-2 after determining that operating costs exceeded revenue. Blast had previously attracted more than $2 billion in deposits and counted prominent investors, including Paradigm, among its backers.

Abstract still had roughly $76 million in assets under DefiLlama’s bridged-value measurement on Wednesday. Users can move their holdings through Abstract’s migration service or bridge them to another network until Dec. 15.