Pudgy Penguins' Ethereum layer-2 Abstract to shut down Dec. 15, users told to move assets

Abstract, the Ethereum layer-2 network operated by Pudgy Penguins parent Igloo, will shut down on Dec. 15. "After almost three years, we are saddened to share that Abstract is winding down," the team said in a post on its official X account at 4:32 a.m. KST on Oct. 7, adding that "any funds not bridged by this date will be inaccessible." A layer-2 is a separate network that processes transactions on top of Ethereum to lower fees.

4 million wallets, then growth stalled

Abstract was a chain built around consumer apps. Igloo entered the chain business when it acquired blockchain developer Frame in the summer of 2024. In its announcement, Abstract said the network has processed more than 325 million transactions, more than $6 billion in decentralized exchange volume and more than $40 million in ecosystem revenue. More than 4 million Abstract Global Wallets (AGW) were created, and more than 144 apps were deployed on the chain. Brands including Red Bull Racing and Disney ran onchain experiences there, bringing in more than 400,000 users, the company said. Abstract said its Portal app-discovery hub became an industry benchmark and that AGW became the most adopted smart contract wallet in crypto.

But "operating a chain focused exclusively on consumer crypto has ultimately proven to be unsustainable as a standalone model," the company said. It cited four reasons growth stagnated: a restricted DeFi (decentralized finance) ecosystem, thin onchain liquidity, minimal institutional cross-over and a limited budget compared with competitors. The company said it explored every angle behind the scenes over the past 12 months, but the chain landscape had changed radically, leaving it at a crossroads between continuing to pour resources into a chain that was operationally unsustainable and not scaling, or shutting it down. It chose to wind down.

Tens of millions lost, but no token

Igloo CEO Luca Netz said on X the same day that "Igloo, Inc. had been funding Abstract over the last 18 months," and that the company lost tens of millions of dollars over two years. With the market's reduced appetite and no scalable path forward, the company could no longer justify diverting more funds from the Pudgy Penguins business, he said. The obstacles Netz listed largely overlapped with the company's announcement: a lack of DeFi, insufficient liquidity and minimal institutional cross-over. Where the announcement cited a limited budget compared with competitors, however, Netz pointed to prohibitively high costs that impeded growth in winning areas.

"Even after losing 8 figures, we could have launched a token or pursued an ICO. Ultimately we decided against this."

Luca Netz, CEO of Igloo

An ICO, or initial coin offering, is a public token sale used to raise funds.

"A token only works if there is something driving demand to it," Netz added, saying that launching a token the company did not have conviction in would have been a disservice to its community. Abstract never issued a token of its own.

Igloo returns to Pudgy Penguins and PENGU

Igloo said in a post on its official X account the same day that winding down Abstract allows it to consolidate its personnel and resources behind Pudgy Penguins. "Starting today, all of @IglooInc's focus will go towards taking Pudgy Penguins, Pudgy NFTs, and $PENGU to the next level," Netz wrote. PENGU, the token of the Pudgy Penguins ecosystem, trades on the Korean won markets of Upbit and Bithumb.

In the 4 a.m. KST hour on Oct. 7, when the announcement came out, PENGU slipped from the $0.0094 range to as low as $0.00898 on Binance before recovering to around $0.0092. As of 7:31 a.m. KST on Oct. 7, PENGU traded at 12.4 won on Upbit, down 5.3% from the previous close, and at 12.41 won on Bithumb. Trading value over the prior 24 hours was about 4.6 billion won on Upbit and about 3 billion won on Bithumb. At the same time, the Binance price converted into won was about 12.30 won, putting Upbit roughly 0.8% higher. That gap is known as the kimchi premium (the gap between prices on Korean exchanges and global markets). The funding rate on Binance's PENGU perpetual futures was near 0%.