The company behind Pudgy Penguins, the digital collectibles and toy brand, is closing its Abstract blockchain after losing “tens of millions of dollars” funding it, becoming the second Ethereum-linked network in less than a week to announce a shutdown.
Abstract will stop operating Dec. 15. The team has told users to move their assets before then, warning that funds left on the network would become inaccessible.
Abstract is a so-called layer-2 network, a separate system that handles transactions cheaply and sends batches to Ethereum for verification. It launched in January 2025 with a bet that the Pudgy Penguins’ audience could bring ordinary consumers into cryptocurrency applications.
Pudgy Penguins began as a collection of cartoon penguin NFTs, digital collectibles whose ownership is recorded on a blockchain. It ranks among the most valuable $NFT collections and has grown into a global brand spanning toys, games and merchandise, with products sold by retailers including Walmart and Target.
https://t.co/0F6yDmUPe5
— Abstract (@AbstractChain) October 6, 2026
Igloo, the parent company, had funded Abstract for about 18 months, CEO Luca Netz said. It decided against continuing to support the chain at the expense of its Pudgy Penguins business or selling a token to raise more money.
The team now cites stalled growth, thin trading markets, limited institutional activity and a small decentralized-finance market among its reasons for closing.
“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 added Igloo will now put its full focus on Pudgy Penguins, its digital collectibles and PENGU, the cryptocurrency associated with the brand. “We could no longer justify taking from the Pudgy Penguins business,” he wrote.
The cost of keeping a blockchain running
Abstract reported more than 325 million transactions, $6 billion in decentralized-exchange trading and 4 million wallets. It also said businesses across the network generated more than $40 million in revenue, with brands including Disney and Red Bull Racing participating.
Money earned by an application does not automatically pay for the blockchain beneath it. A game can charge for purchases and an exchange can collect trading fees, while Abstract receives the smaller charge for processing their transactions.
DefiLlama data showed roughly $3,900 in chain fees over the latest 24 hours, compared with about $39,000 in revenue for applications running on Abstract. The chain fees still have to cover costs before they become profit.
At launch, Netz had deliberately steered developers away from financial applications toward simple, entertaining products — though the platform did not attract meaningful liquidity despite a hyped start.
