Igloo Shuts Down Ethereum Layer-2 Network Abstract by 2026

Igloo Inc., the company behind the popular NFT project Pudgy Penguins, has announced that its Ethereum layer-2 network, Abstract, will shut down on December 15, 2026. The decision comes after 18 months of financial losses totaling tens of millions of dollars, despite efforts to expand beyond its NFT origins into a full blockchain business.

The shutdown is attributed to stagnant growth, low on-chain liquidity, and limited institutional adoption within Abstract's restricted DeFi ecosystem. CEO Luca Netz emphasized that the company will not issue an Abstract token, disappointing users who had hoped for a future airdrop. Netz framed the decision as a strategic pivot, prioritizing Igloo's core Pudgy Penguins brand and its PENGU token over the struggling layer-2 network.

Users with assets on Abstract have until December 15 to bridge them off the network through designated migration hubs, or risk permanent loss of access. The network, which launched its mainnet in January 2025, onboarded over 400,000 users and processed more than 300 million transactions across 144 applications. Despite partnerships with major brands like Disney and Red Bull Racing, and a $11 million funding round in July 2024, the network's financial losses outweighed its gains.

Developers who built applications on Abstract now face the challenge of migrating, rebuilding elsewhere, or winding down their projects. For Igloo, the shutdown marks a consolidation of resources toward Pudgy Penguins, signaling a shift in focus away from layer-2 blockchain development.