Abstract, the Ethereum layer-2 built by Pudgy Penguins parent Igloo Inc., said on Oct. 6 that it will shut down on Dec. 15, the second high-profile Ethereum L2 to announce a wind-down in a week.
The wind-down lands in the same stretch that Blast, the Paradigm-backed network that once drew billions in deposits, said it would wind down because its operating costs outstripped its revenue. Bitcoin-focused Botanix closed in June after failing to find product-market fit. Appchains with no token and thin liquidity are running out of ways to pay the bills, and the three closures name the same causes each time: costs above revenue, and not enough activity on the chain to close the gap.
Igloo Inc. CEO Luca Netz said the company lost tens of millions of dollars over two years funding Abstract, and could no longer justify taking that money from the Pudgy Penguins business. “After losing tens of millions of dollars over two years, building consumer products, assembling an all-star team, onboarding some of the biggest brands in the world, and building a community of millions, we still had not found product-market fit.”
The team tied the stall to a limited DeFi landscape, insufficient on-chain liquidity, minimal institutional crossover and high operating costs. “Operating a chain focused exclusively on consumer crypto has ultimately proven to be unsustainable as a standalone model,” the Abstract team wrote.
Abstract launched its mainnet in January 2025, after Igloo acquired the startup Frame in summer 2024 with a plan to build the blockchain for consumer crypto. The mainnet onboarded more than 400,000 users and carried more than 144 apps, and the team said in the shutdown post that it processed over 300 million transactions. Notably, Igloo never launched a token: Netz wrote that the company could have run an ICO even after losing eight figures, but decided a token only works when something drives demand to it.
Users holding funds on Abstract must bridge out before Dec. 15 through the Migration Hub or the Native Bridge, which carries a three-hour delay, or the funds become inaccessible. The team also warned against impersonators and fake migration sites posing as the project. Igloo said all of its focus now goes to Pudgy Penguins, the Pudgy NFTs and $PENGU.
