The consumer-oriented blockchain will shut down on Dec. 15 after its parent company, Igloo, spent tens of millions of dollars supporting the network. The decision comes only days after Blast announced that continuing to operate its own Ethereum-linked network was no longer financially viable.
The company behind Pudgy Penguins, the digital collectibles and toy brand, is winding down its Abstract blockchain after spending “tens of millions of dollars” to fund the project. That makes Abstract the second Ethereum-related network to announce a shutdown in less than a week.
Abstract will cease operations on Dec. 15, and users have been instructed to transfer their assets before the deadline. The team warned that funds remaining on the network after the shutdown could become inaccessible.
Abstract is an Ethereum layer-2 network, meaning it processes transactions separately before sending batches to Ethereum for verification. The blockchain launched in January 2025, with the goal of using Pudgy Penguins’ large consumer audience to introduce mainstream users to crypto-based applications.
Pudgy Penguins originally launched as a collection of cartoon penguin NFTs, with ownership recorded on a blockchain. The collection has become one of the more valuable NFT projects and expanded into a broader consumer brand covering toys, games and merchandise. Its products are sold through major retailers such as Walmart and Target.
Igloo, Pudgy Penguins’ parent company, funded Abstract for roughly 18 months, according to CEO Luca Netz. The company ultimately decided it would not continue financing the network at the expense of its core Pudgy Penguins business, nor would it launch a token or pursue an initial coin offering to raise additional funds.
The team pointed to several factors behind the shutdown, including slowing growth, limited trading liquidity, weak institutional participation and a relatively small decentralized-finance ecosystem.
“Even after losing 8 figures, we could have launched a token or pursued an ICO. Ultimately we decided against this,” Netz wrote on X.
Netz said Igloo would instead concentrate its resources on Pudgy Penguins, its digital collectibles and PENGU, the cryptocurrency tied to the brand. He said the company could no longer justify diverting money from the Pudgy Penguins business to maintain Abstract.
The Economics of Running a Blockchain
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 it had generated more than $40 million in revenue, with brands such as Disney and Red Bull Racing involved.
However, revenue generated by applications does not automatically flow to the blockchain itself. An application may earn money from purchases or trading fees, while the underlying network receives only the smaller fees associated with processing those transactions.
According to DefiLlama, Abstract generated approximately $3,900 in chain fees over the latest 24-hour period, compared with around $39,000 in revenue generated by applications operating on the network. Those network fees must still cover the blockchain’s operating expenses before they can be considered profit.
When Abstract launched, Netz intentionally encouraged developers to focus on consumer-friendly and entertaining applications rather than financial products. Despite the initial attention, the platform failed to develop significant liquidity.
“If you want to build the next DeFi application, I really recommend you use Berachain or Arbitrum. Don’t come to Abstract to build those type of products because we want to be really specialized around fun,” Netz said at the time, according to CoinDesk. Abstract now lists its limited market for financial applications as one of the factors contributing to its difficulties.
The shutdown follows Blast’s decision on Oct. 2 to close its own layer-2 network after concluding that its operating costs were higher than the revenue it generated. Blast had previously attracted more than $2 billion in deposits and received backing from major investors, including Paradigm.
Despite the planned closure, Abstract still held approximately $76 million in assets under DefiLlama’s bridged-value metric on Wednesday. Users have until Dec. 15 to transfer their assets through the network’s migration service or bridge them elsewhere.
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