Pudgy Penguins-backed Ethereum L2 Abstract to shut down after losing ‘tens of millions’

Abstract, a consumer-focused Ethereum Layer 2 network, said it will wind down operations and shut down the chain on Dec. 15, 2026, citing stagnant growth, thin liquidity, a restricted DeFi ecosystem and limited institutional adoption.Abstract said more than 144 apps were deployed on the chain and more than 400,000 users were onboarded through consumer-focused partnerships with brands including Red Bull Racing and Disney."But the industry has evolved considerably since Abstract was first conceived, and operating a chain focused exclusively on consumer crypto has ultimately proven to be unsustainable as a standalone model," Abstract said Tuesday in a post on X.The project said users must bridge their assets off Abstract before the shutdown date or risk losing access to their funds.Igloo Inc., the parent company behind Pudgy Penguins, had been funding Abstract for the past 18 months and lost "tens of millions of dollars," according to CEO Luca Netz. Igloo will now redirect its resources toward Pudgy Penguins and PENGU.In July 2024, Igloo raised more than $11 million, led by Founders Fund, to develop Abstract as a consumer-focused L2 and leverage Pudgy Penguins' distribution to bring consumers onchain. Abstract launched its mainnet in January 2025.Netz said Igloo ultimately decided against launching an Abstract token or continuing to fund the network at the expense of the Pudgy Penguins business."Even after losing 8 figures, we could have launched a token or pursued an ICO. Ultimately we decided against this," Netz said Tuesday in a post on X. "A token only works if there is something driving demand to it, and launching a token that we don’t have conviction in would have been a disservice to our community."Over the past few weeks, speculation was circulating that Abstract was winding down, fueled by reduced activity on its official account, the reported departures of two senior team members in August, and scrutiny of developer wallet activity."There will be many that will find satisfaction in seeing this shut down, and that is fine," Netz continued. "I take a great amount of pride in having the ambition to venture into the chain business, notoriously one of the most difficult to make work, and the only regret I have is not being able to celebrate a win alongside the Abstract community."The shutdown comes less than a week after Paradigm-backed Layer 2 Blast said it will wind down as costs exceed revenue.