Pudgy Penguins' Abstract Layer-2 Chain to Wind Down Dec. 15

Igloo, the company behind the Pudgy Penguins digital collectibles and toy brand, said it will shut down its Abstract blockchain on Dec. 15 after spending "tens of millions of dollars" to fund the project. The announcement makes Abstract the second Ethereum-linked network in less than a week to disclose plans to close. The team urged users to move assets off the network before the deadline, warning that any funds left on Abstract will become inaccessible once operations stop. Abstract is a so-called layer-2 network, designed to process transactions cheaply on a separate system and periodically submit batches to Ethereum for verification. It launched in January 2025, aiming to leverage the Pudgy Penguins community to bring mainstream users into crypto applications. Pudgy Penguins started as a collection of cartoon penguin NFTs, blockchain-based digital collectibles. It has since become one of the most valuable NFT collections and expanded into a broader consumer brand spanning toys, games and merchandise, with products sold through retailers including Walmart and Target. CEO Luca Netz said Igloo funded Abstract for roughly 18 months. The company chose not to keep subsidizing the chain at the expense of its Pudgy Penguins business, and also ruled out issuing a token to raise additional capital. In a post on X, Netz wrote that even after losing eight figures, the team decided against launching a token or pursuing an ICO. Abstract cited stalled growth, thin trading markets, limited institutional participation and a relatively small decentralized-finance ecosystem as key factors behind the decision. Going forward, Igloo plans to concentrate on Pudgy Penguins, its digital collectibles, and PENGU, the cryptocurrency associated with the brand. Netz said the company "could no longer justify" diverting resources away from the core business. Abstract reported more than 325 million transactions, $6 billion in decentralized-exchange trading and 4 million wallets. It also said businesses on the network generated more than $40 million in revenue, with brands including Disney and Red Bull Racing taking part. Still, application revenue does not automatically fund the underlying blockchain. While apps can collect purchase revenue or trading fees, the chain typically earns only the smaller processing fees for transactions. DefiLlama data showed about $3,900 in chain fees over the latest 24 hours, versus roughly $39,000 in revenue for applications running on Abstract. Those chain fees must also cover operating costs before turning into profit. At launch, Netz had encouraged developers to focus on simple entertainment products rather than financial applications, though the platform failed to attract meaningful liquidity despite heavy early hype. Abstract now points to its limited market for finance-oriented apps as a weakness. The shutdown follows layer-2 network Blast, which said on Oct. 2 that it would close because operating costs exceeded revenue. Blast once drew more than $2 billion in deposits and counted firms such as Paradigm among its backers. As of Wednesday, Abstract still held about $76 million in assets under DefiLlama's bridged-value metric. Users can migrate funds via the network's migration service or bridge before Dec. 15.