Pudgy Penguins' Abstract to shut layer-2 network on 15 December

Igloo, the parent company of the Pudgy Penguins digital collectibles and toy brand, is closing its Abstract blockchain after losing what the company describes as tens of millions of dollars funding it, making it the second Ethereum-linked network in less than a week to announce a shutdown. Abstract will stop operating on 15 December, and the team has told users to move their assets before then, warning that funds left on the network will become inaccessible.

Abstract is a layer-2 network: a separate system that handles transactions cheaply and batches them to Ethereum for verification. It launched in January 2025 on a bet that the Pudgy Penguins audience could bring ordinary consumers into cryptocurrency applications. Pudgy Penguins began as a collection of cartoon penguin NFTs, digital collectibles whose ownership is recorded on a blockchain, and has grown into a global brand spanning toys, games and merchandise, with products sold by retailers including Walmart and Target.

Igloo had funded Abstract for about 18 months, chief executive Luca Netz said. He said the company decided against continuing to support the chain at the expense of its Pudgy Penguins business, and against selling a token to raise more money. “Even after losing 8 figures, we could have launched a token or pursued an ICO. Ultimately we decided against this,” Netz wrote on X. He added that Igloo would now put its full focus on Pudgy Penguins, its digital collectibles and PENGU, the cryptocurrency associated with the brand. “We could no longer justify taking from the Pudgy Penguins business,” he wrote.

The team cites stalled growth, thin trading markets, limited institutional activity and a small decentralised-finance market among its reasons for closing. Abstract reported more than 325 million transactions, $6 billion in decentralised-exchange trading and 4 million wallets, and said businesses across the network generated more than $40 million in revenue, with brands including Disney and Red Bull Racing taking part. Money earned by an application does not automatically pay for the blockchain beneath it: a game can charge for purchases and an exchange can collect trading fees while Abstract receives the smaller charge for processing their transactions. DefiLlama data showed roughly $3,900 in chain fees over the latest 24 hours, against about $39,000 in revenue for applications running on Abstract.

At launch, Netz deliberately steered developers away from financial applications towards simple, entertaining products, telling them to use Berachain or Arbitrum if they wanted to build the next DeFi application, as CoinDesk reported. Abstract now lists its limited market for those applications among its shortcomings. The closure comes days after layer-2 Blast announced its own shutdown on 2 October, saying operating costs exceeded revenue. Blast once attracted more than $2 billion in deposits and counted prominent funds including Paradigm among its backers. Abstract still had about $76 million in assets under DefiLlama’s bridged-value measure on Wednesday. Users have until 15 December to move their holdings through the network’s migration service or bridge.