Igloo Inc., the parent company of the Pudgy Penguins brand, will shut down its Ethereum layer 2 network Abstract on December 15, 2026. According to CEO Luca Netz, the company lost tens of millions of dollars on the project. Even so, it will not launch a token of its own.

Abstract was built as a layer 2 — a separate blockchain that bundles transactions and settles them more cheaply than Ethereum, while still drawing its security from the main network. Unlike chains geared toward financial products, Abstract targeted consumer applications. Igloo raised more than USD 11 million for the project in July 2024 in a round led by Founders Fund, and the mainnet followed in January 2025. Netz said the company funded the chain for about 18 months in total before Abstract announced its end in a post on X in October 2026.

During that time, developers deployed more than 144 apps on the chain. Abstract says it attracted more than 400,000 users and processed over 325 million transactions. The network also formed partnerships with brands such as Red Bull Racing and Disney, and its activity and fees remain publicly trackable on DefiLlama.

Stagnant Growth and Thin Liquidity Sealed Abstract's Fate

Abstract cites stagnant growth and thin liquidity on the chain as the reasons for the shutdown A limited DeFi ecosystem and modest interest from institutional players added to the problem, and the network operated on a smaller budget than its competitors.

The usage record of more than 144 apps and over 400,000 users stands in contrast to that picture. Still, the reach was not enough to keep the chain running on its own, and the partnerships with Red Bull Racing and Disney failed to reverse the stagnant growth. A blockchain lives on the capital that stays on it — and on Abstract, that liquidity was precisely what ran thin.

Signs of a retreat had already appeared in the weeks before the announcement. Activity on the official account declined, and two senior team members reportedly left in August. At the same time, observers examined the developers' wallet activity, which fueled speculation about an imminent end.

Netz himself had set the chain apart from financial applications. He pointed developers to Berachain or Arbitrum for their next DeFi project, saying Abstract specializes in "fun" — a positioning that matches the weaknesses in liquidity and DeFi offerings the team now names.

Why Pudgy Penguins Is Not Launching an Abstract Token

For Igloo, the project ends with a heavy loss. Over roughly 18 months of funding, the company lost tens of millions of US dollars, according to Netz — after the 2024 funding round had already brought in more than USD 11 million. Freed-up resources will now flow into Pudgy Penguins and its associated token PENGU, moving the core business around the NFT brand back to the center.

Igloo is nonetheless forgoing an Abstract token and an initial coin offering (ICO), a public token sale. Netz explained his reasoning in a post on X:

"Even after losing 8 figures, we could have launched a token or pursued an ICO. Ultimately we decided against this. A token only works if there is something driving demand to it, and launching a token that we don't have conviction in would have been a disservice to our community."

— Luca Netz, CEO of Igloo Inc.

A token could have given Igloo fresh capital, but the risk would then have shifted to the buyers. Instead, the company absorbs the loss itself and spares retail investors the costs of a failed chain, setting a counterpoint to networks that fund their operations through token sales. Notably, even a well-known consumer brand backed by Founders Fund failed to create enough demand for the network. Netz therefore saw no place for a token without that foundation.

Abstract Follows Blast Shutdown Within Days

Blast had announced its own end less than a week before Abstract. The Paradigm-backed layer 2 launched its mainnet in February 2024, after closing a USD 20 million Series A in November 2023 led by Paradigm and Standard Crypto. At one point, the value locked on Blast exceeded USD 2 billion; it now stands at just over USD 32 million. According to The Block, the BLAST token fell 17% on October 2, 2026, leaving its market capitalization at around USD 23 million.

As a result, BLAST holders face a price loss that Abstract users, lacking a token, do not bear. Blast users can still withdraw their funds through the Blast interface until October 26, 2026; after that, the only route is directly through the bridge contracts on Ethereum.

Blast attributed the move to its own cost structure, saying running costs exceed the chain's revenue and that it sees no credible path to economic viability. Abstract also cites economic causes — thin liquidity and stagnant growth. Both cases follow a similar pattern, in which revenue did not cover the cost of running a dedicated chain. A layer 2 earns its fees from the activity on its own chain while paying to settle with Ethereum, so without sustained engagement the math stops working. Neither the backing of Paradigm nor that of Founders Fund changed that math, and Blast's own BLAST token did not secure its operations either. Two shutdowns within a few days therefore point to a structural problem rather than two isolated cases.

Users Must Withdraw Assets From Abstract by December 15

Anyone holding assets on Abstract must move them off the chain before December 15, 2026, or they risk losing access. Abstract offers two routes: the Migration Hub and the native bridge, which transfers tokens between the layer 2 and the Ethereum mainnet. With the native bridge, however, users should expect a delay of about three hours, and anyone migrating close to the deadline should plan for the wait.

The team also warns against unofficial migration links and impersonators. Users should rely only on the project's official channels and check links before connecting a wallet. Developers receive support as well: Abstract's engineering and ecosystem teams are helping apps move to other networks. That leaves just over two months until the shutdown.

Source: Crypto Valley Journal