Pudgy Penguins’ Abstract becomes second Ethereum layer 2 to shut in a week

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.