The company behind Pudgy Penguins, the digital collectibles and toy brand, is shutting down its Abstract blockchain after losing "tens of millions of dollars" funding it — making it the second Ethereum-linked network in less than a week to announce a closure.

Abstract will cease operations on Dec. 15. The team has urged users to move their assets before that date, warning that any funds left on the network would become inaccessible.

Abstract is a layer-2 network, a separate system that processes transactions at low cost and sends batches to Ethereum for verification. It launched in January 2025 on the bet that the Pudgy Penguins audience could draw ordinary consumers into cryptocurrency applications.

Pudgy Penguins began as a collection of cartoon penguin NFTs — digital collectibles whose ownership is recorded on a blockchain. It ranks among the most valuable NFT collections and has since grown into a global brand spanning toys, games and merchandise, with products sold at retailers including Walmart and Target — a reach that made Abstract one of the most prominent attempts to carry mainstream consumers into crypto.

— Abstract (@AbstractChain) October 6, 2026

Igloo, the parent company, had funded Abstract for roughly 18 months, CEO Luca Netz said. It decided against continuing to support the chain at the expense of its Pudgy Penguins business, and also ruled out selling a token to raise additional funds — a fundraising route many crypto projects have used to keep development going. Fronting a network's costs ahead of its own fee revenue is a common pattern in the layer-2 sector, one that leaves operators covering the shortfall when activity stalls.

The team cited stalled growth, thin trading markets, limited institutional activity and a small decentralized-finance market among its reasons for closing — the kind of activity that on larger layer-2 networks typically drives the bulk of chain fees.

"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 added that Igloo will now direct its full attention to Pudgy Penguins, its digital collectibles and PENGU, the cryptocurrency associated with the brand. "We could no longer justify taking from the Pudgy Penguins," he wrote.

The cost of keeping a blockchain running

Abstract reported more than 325 million transactions, $6 billion in decentralized-exchange trading and 4 million wallets. It also said businesses across the network generated more than $40 million in revenue, with brands including Disney and Red Bull Racing participating.

Money earned by an application, however, does not automatically pay for the blockchain beneath it. A game can charge for purchases and an exchange can collect trading fees, while the underlying network receives the smaller charge for processing their transactions.

DefiLlama data showed roughly $3,900 in chain fees over the latest 24 hours, compared with about $39,000 in revenue for applications running on Abstract. Chain fees still have to cover network costs before they become profit.

That gap is the central bind for consumer-focused chains: wallets, transactions and brand names measure adoption, but the network itself lives on the fees it collects. At launch, Netz had deliberately steered developers away from financial applications toward simple, entertaining products — though the platform failed to attract meaningful liquidity despite a hyped start.