Igloo, the parent company of the Pudgy Penguins digital collectibles and toy brand, will close its Abstract blockchain on Dec. 15 after spending tens of millions of dollars supporting the Ethereum layer-2 network. The decision makes Abstract the second Ethereum-linked layer 2 to announce a shutdown in less than a week.
Users have been instructed to move their assets before the closure date. Holdings left on Abstract after the network stops operating may become inaccessible. DefiLlama data showed approximately $76 million in assets remained on the network as of Wednesday, measured by the value of assets bridged to the chain.
According to CoinDesk, Igloo chief executive Luca Netz said the company had funded Abstract for about 18 months but no longer considered continued support sustainable. Rather than diverting more money from the Pudgy Penguins business or issuing a token or initial coin offering to raise funds, Igloo chose to close the network.
Why Abstract is closing
Abstract is an Ethereum layer-2 network. These systems process transactions separately from Ethereum, generally allowing activity to be handled at lower cost, before sending transaction batches to the main blockchain for verification. Abstract launched in January 2025 with a consumer-focused strategy built around the audience of Pudgy Penguins.
The Pudgy Penguins brand began as a collection of cartoon penguin non-fungible tokens, or NFTs. NFTs are digital assets whose ownership records are maintained on a blockchain. The brand later expanded into toys, games and other merchandise, with products sold through retailers including Walmart and Target.
Abstract’s team said the network had processed more than 325 million transactions and supported four million wallets. It also reported $6 billion in decentralized-exchange trading and said businesses operating across the network had generated more than $40 million in revenue. Disney and Red Bull Racing were among the brands participating in the ecosystem.
Those figures did not translate into enough income for the blockchain itself. Revenue earned by an application, such as a game or exchange, is separate from the fees collected by the underlying network. Abstract receives transaction fees, but those fees must cover the chain’s operating expenses before they can represent profit.
DefiLlama data cited by CoinDesk showed that Abstract generated about $3,900 in chain fees during the latest 24-hour period, while applications operating on the network generated about $39,000 in revenue. The company also pointed to stalled growth, thin trading markets, limited institutional activity and a small decentralized-finance sector as reasons for the shutdown.
A consumer-first strategy struggled to produce liquidity
Abstract had deliberately positioned itself differently from layer 2s focused on decentralized finance, or DeFi. At launch, Netz encouraged developers to build simple and entertaining consumer products rather than financial applications. The strategy was intended to make cryptocurrency more accessible through games and other mainstream-oriented uses.
However, the platform did not attract meaningful liquidity despite a heavily anticipated start. Liquidity refers broadly to the availability of assets for trading or other financial activity. Abstract now lists the limited market for DeFi applications among the weaknesses that contributed to its decision to stop operating.
Netz said Igloo could have launched a token or pursued an initial coin offering even after absorbing eight-figure losses, but decided against that route. He said the company could no longer justify taking additional resources from the Pudgy Penguins business. Igloo will instead focus fully on Pudgy Penguins, its digital collectibles and PENGU, the cryptocurrency associated with the brand.
Abstract follows Blast shutdown
Abstract’s closure follows the announcement by Blast, another Ethereum layer-2 network, that it would shut down. Blast said on Oct. 2 that operating the chain no longer made sense because its costs exceeded its revenue. The network had previously attracted more than $2 billion in deposits and counted investment firm Paradigm among its backers.
The back-to-back decisions highlight the challenge of operating a blockchain even when it records substantial user activity. Transaction counts, wallet totals and application revenue can show usage across an ecosystem, but the network operator depends on its own fee income to pay for infrastructure and other costs.
Abstract users have until Dec. 15 to transfer their holdings using the project’s migration service or a bridge. The warning is especially significant because assets that remain on the chain after the shutdown could no longer be accessible through the network.
Current crypto market picture
Moneyiar market data at 09:59 on Oct. 7, 2026, showed broad declines among the assets tracked:
- Ethereum was priced at $2,594.52, down 4.25% over 24 hours and 3.46% over seven days.
- Shiba Inu traded at $0.0000054863, down 6.30% in 24 hours and 5.60% over seven days.
- Uniswap stood at $8.04, down 9.27% over 24 hours and 8.93% over seven days.
- Pepe was priced at $0.0000041033, down 5.35% in 24 hours and 5.52% over seven days.
These market moves provide the current pricing backdrop for Ethereum and several crypto assets, while Abstract’s shutdown is a decision about the economics and operation of one specific layer-2 network.
