Pudgy Penguins Shuts Down Abstract Blockchain After Millions in Losses
The company behind Pudgy Penguins, a popular digital collectibles and toy brand, has announced the shutdown of its Abstract blockchain. The decision comes after the company lost "tens of millions of dollars" funding the network, making it the second Ethereum-linked layer-2 network to close in less than a week. Abstract will cease operations on Dec. 15, 2026, and users have been urged to withdraw their assets before then to avoid losing access.
Abstract launched in January 2025 as a layer-2 network designed to handle transactions cheaply and efficiently before verifying them on Ethereum. The project aimed to attract everyday consumers to cryptocurrency through the Pudgy Penguins community. However, despite initial hype, the network struggled with stalled growth, thin trading markets, limited institutional activity, and a small decentralized-finance market.
The parent company, Igloo, had funded Abstract for about 18 months. CEO Luca Netz stated that the company chose not to continue financial support at the expense of its core Pudgy Penguins business or to raise more money by selling a token. Netz emphasized that even after significant financial losses, the team decided against launching a token or pursuing an ICO.
During its operation, Abstract processed over 325 million transactions, facilitated $6 billion in decentralized-exchange trading, and saw 4 million wallets interact with the network. Brands like Disney and Red Bull Racing participated in the ecosystem. However, the platform's revenue from transaction fees was insufficient to cover operational costs, leading to the shutdown decision.