Igloo will shut down its Ethereum layer-2 network Abstract on Dec. 15 after spending tens of millions of dollars to keep it running, according to the company and comments from CEO Luca Netz.
Users have been told to move assets off the network before the deadline. Funds left on Abstract after the shutdown would become inaccessible. DefiLlama data cited in the report showed about $76 million still on the network as of Wednesday.
Second Ethereum-linked layer 2 to announce a shutdown in less than a week
The closure makes Abstract the second Ethereum-connected network in less than a week to announce plans to cease operations. Days earlier, Blast said it would shut down on Oct. 2, arguing that running the network no longer made economic sense because costs exceeded revenue.
Abstract was launched in January 2025 as a consumer-focused layer 2 built around the idea that Pudgy Penguins’ audience could bring mainstream users into crypto apps. Layer 2 networks process transactions on a separate system at lower cost, then send batches to Ethereum for final verification.
Pudgy Penguins began as a collection of cartoon penguin NFTs, with ownership recorded onchain. It later grew into a broader consumer brand spanning toys, games and merchandise, with products sold by retailers including Walmart and Target.
Igloo, the parent company, funded Abstract for about 18 months, Netz said. The company decided not to keep supporting the chain at the expense of the wider Pudgy Penguins business, and also decided against selling a token to raise additional money.
Netz wrote on X, 「Even after losing 8 figures, we could have launched a token or pursued an ICO. Ultimately we decided against this.」
He also said Igloo will now concentrate fully on Pudgy Penguins, its digital collectibles business and PENGU, the cryptocurrency associated with the brand. In another post, he wrote, 「We could no longer justify taking from the Pudgy Penguins business.」
High activity did not translate into a sustainable chain business
Abstract said it processed more than 325 million transactions, generated $6 billion in decentralized exchange trading volume and reached 4 million wallets. The company also said businesses across the network brought in more than $40 million in revenue, and named Disney and Red Bull Racing among participating brands.
That did not mean the blockchain itself was making enough money. Revenue earned by apps on a chain does not automatically flow to the network underneath. A game may charge users for purchases and an exchange may collect trading fees, while the chain only receives the smaller fee tied to processing those transactions.
DefiLlama data showed roughly $3,900 in chain fees over the latest 24 hours, compared with about $39,000 in revenue generated by applications running on Abstract. Those chain fees still had to cover operating costs before any profit could exist.
Igloo now says stalled growth, thin trading markets, limited institutional activity and a small decentralized-finance footprint were central reasons behind the shutdown.
At launch, Netz had intentionally pushed developers away from building financial apps and toward simpler, entertainment-oriented products. CoinDesk previously reported that he said, 「If you want to build the next DeFi application, I really recommend you use Berachain or Arbitrum. Don't come to Abstract to build those type of products because we want to be really specialized around fun.」
Despite a heavily promoted debut, the platform did not attract meaningful liquidity. The company now lists the limited market for those applications as one of the network’s weaknesses.
Users have until Dec. 15 to move funds
Under DefiLlama’s bridged-value measure, Abstract still held about $76 million in assets on Wednesday. Users have until Dec. 15 to move holdings through the network’s migration service or bridge.
Any assets left on the network after that date would no longer be accessible.