The company behind Pudgy Penguins is shutting down its Abstract blockchain. The reason is that despite investing “tens of millions of dollars” into it, it was still unable to sustain operations. This makes it the second Ethereum-related network to announce a shutdown in less than a week.
Abstract will cease operations on December 15th. The team has notified users to migrate their assets before that date and warned that any funds remaining on the network will no longer be accessible.
Abstract is a so-called two-layer network, which is an independent system responsible for processing transactions at a lower cost and sending these transactions in batches to Ethereum for verification. The network was launched in January 2025, with the hope that the user base of Pudgy Penguins will be able to bring ordinary consumers into the world of cryptocurrency applications.
Pudgy Penguins were originally a set of cartoon penguins, NFT, which are digital collectibles whose ownership is recorded on the blockchain. They have now become one of the most valuable NFT series and have developed into a global brand with operations covering toys, games, and merchandise, with products sold through retailers such as Walmart and Target.
Igloo is its parent company. CEO Luca Netz indicates that the company has provided funding for Abstract for approximately 18 months. The company has ultimately decided not to continue supporting this blockchain in order not to affect the business of Pudgy Penguins, nor does it intend to raise more funds by issuing tokens.
The team now attributes the reasons for the closure to stagnant growth, a weak trading market, limited institutional activity, and a relatively small scale of the decentralized finance market.
Netz wrote on X: 'Even though we have already lost eight digits in losses, we could have issued tokens or proceeded with token issuance. In the end, we decided not to do so.'
Netz also added that Igloo will now focus all its efforts on Pudgy Penguins, its digital collectibles, and the cryptocurrency PENGU associated with this brand. He wrote, "We can no longer justify diverting resources away from the Pudgy Penguins business."
The cost of maintaining the operation of a blockchain
Abstract reports that its trading volume has exceeded 325 million transactions, with decentralized exchanges having a trading volume of $6 billion, and the number of wallets reaching 4 million. It also states that businesses on the network have generated a total income of over $40 million, including participation from brands such as Disney and Red Bull Racing.
However, the money earned by the applications does not automatically cover the operating costs of the underlying blockchain. Games can charge for purchases, exchanges can collect transaction fees, while Abstract can only obtain a smaller portion of these transaction processing fees.
At the beginning of its launch, Netz deliberately guided developers away from financial applications towards simpler and more interesting products; however, despite a high initial enthusiasm, the platform still failed to attract any significant level of liquidity.
This move occurred after the second-tier network Blast announced its closure on October 2nd. Blast stated that its operating costs were higher than its revenue. The network once attracted over $2 billion in deposits, and well-known funds such as Paradigm were also among its supporters.
According to the cross-chain value statistics of DefiLlama, as of Wednesday, Abstract still has approximately $76 million in assets. Users can transfer their holdings through the network's migration service or cross-chain bridge before December 15th.
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