Pudgy Penguins’ Abstract Closes, Marking Second Ethereum Layer 2 Shutdown in a Week

The organisation behind digital collectibles and toys called Pudgy Penguins is shutting down its Abstract blockchain due to losing “tens of millions of dollars” worth of funding. This has now become the second Ethereum-related network, which is shut down within less than a week. Operation of Abstract will cease on December 15. The developers have informed users that they are supposed to withdraw their funds before this day, or else all assets remaining on the platform will no longer be available to users. 

Abstract Reported Millions of Transactions Since Its January 2025 Launch

Abstract can be classified as a so-called layer 2 network, a separate system that handles transactions cheaply and sends batches to Ethereum for verification. It was launched in January 2025 with the assumption that the fanbase of Pudgy Penguins would help introduce regular people to cryptocurrency applications. Pudgy Penguins was initially an assortment of cartoon penguin NFTs, digital assets whose ownership was verified using blockchain technology. It is one of the most lucrative NFT collections and has since turned into a global brand ranging from toys to games to merchandise. 

The igloo holding company has been funding Abstract for almost 18 months, according to the CEO of the company, Luca Netz. The igloo holding company decided that it wouldn't fund the project at the cost of its Pudgy Penguins line of businesses. Another reason behind the closure is the lack of token sales to earn more capital. “Even after losing 8 figures, we could have launched a token or pursued an ICO. Ultimately, we decided against this,” Netz wrote on X.

Netz revealed that Igloo will concentrate only on Pudgy Penguins, which includes its digital collectibles and PENGU cryptocurrency. “We could no longer justify taking from the Pudgy Penguins business,” he said.

More than 325 million transactions, a total of $6 billion (roughly Rs. 5,80,920 crore) on decentralised exchanges and 4 million wallets were reported by the abstract. More than $40 million (roughly Rs. 387 crore) of revenue was created by businesses from within the blockchain, with brands such as Disney and Red Bull Racing taking part. 

The money made by an app does not necessarily mean that it pays for the underlying blockchain. A game can be paid for through purchasing, while an exchange charges for the transaction fees, and Abstract is paid for handling their transactions.

The DefiLlama data revealed chain fees that stood at about $3,900 (roughly Rs. 3.7 lakh) during the last 24 hours versus a revenue figure of roughly $39,000 (roughly Rs. 37.7 lakh) that was generated by the apps built using Abstract. There are still chain fees that need to be deducted for profits to be realised. To begin with, Netz had purposely steered developers away from building financial apps and toward building fun ones, even though the platform could not manage to attract meaningful liquidity despite the hype it created at the beginning. 

Earlier this year, in June, Pudgy Penguins' Non-fungible token (NFT) project decided to shut down its mobile game, Pudgy Party, and halt any further development efforts. As per an announcement made on X, they have decided to divert all gaming efforts to Pudgy World, which is a web-based game and their flagship gaming project under the Pudgy Penguins ecosystem. According to the group's report, Pudgy World had better scaling capabilities.