Abstract, a consumer-focused Ethereum Layer 2 network backed by Pudgy Penguins, said it will wind down operations and shut down the chain on December 15, 2026. Abstract cited stagnant growth, thin liquidity, a restricted decentralized finance ecosystem and limited institutional adoption. Abstract said users must bridge their assets off the network before the shutdown date or risk losing access to their funds.
Abstract said more than 144 apps had been deployed on the chain. Abstract said more than 400,000 users had been onboarded through consumer-focused partnerships with brands including Red Bull Racing and Disney. Abstract said Tuesday that the industry had evolved considerably since the network was conceived. Abstract said operating a chain focused exclusively on consumer crypto had ultimately proved unsustainable as a standalone model.
Igloo Inc., the parent company behind Pudgy Penguins, had funded Abstract for the past 18 months and lost tens of millions of dollars, according to CEO Luca Netz. Igloo will now redirect its resources toward Pudgy Penguins and PENGU. Netz said Igloo decided against launching an Abstract token or continuing to fund the network at the expense of the Pudgy Penguins business. Netz said Tuesday that Igloo could have launched a token or pursued an initial coin offering despite the losses. Netz argued that a token only works if something drives demand for the token. Netz said launching a token that Igloo lacked conviction in would have been a disservice to the community.
Igloo raised more than $11 million in July 2024 in a funding round led by Founders Fund. Igloo raised the funds to develop Abstract as a consumer-focused Layer 2 network and use Pudgy Penguins' distribution to bring consumers onto blockchain networks. Abstract launched its mainnet in January 2025.
Speculation that Abstract was winding down circulated over the past few weeks. Reduced activity on Abstract's official account, the reported departures of two senior team members in August and scrutiny of developer wallet activity fueled the speculation. Netz said some people would find satisfaction in the shutdown and that Netz accepted that reaction. Netz said Netz took pride in attempting to enter the chain business, which Netz described as notoriously difficult to make work. Netz said the only regret was being unable to celebrate a success with the Abstract community.
The shutdown announcement comes less than a week after Paradigm-backed Layer 2 network Blast said it will wind down because costs exceed revenue.