Ethereum
Pudgy Penguins Parent Igloo to Wind Down Ethereum Layer-2 Network Abstract
The layer-2 platform is terminating operations after struggling with low user adoption, falling liquidity, and heavy development costs.
Ethereum layer-2 network Abstract will shut down operations by mid-December, according to Igloo Inc., the parent entity behind NFT brand Pudgy Penguins. The project, originally acquired in 2024 as Frame before being rebranded, is halting development after failing to establish product-market fit.
Igloo chief executive Luca Schnetzler stated that the company could no longer justify subsidizing the network after spending tens of millions of dollars over a two-year span. Schnetzler highlighted prohibitive operating expenses alongside subdued decentralized finance activity and liquidity as key factors behind the decision.
Data compiled by AMBCrypto showed that Abstract's total value locked dropped 83%, declining from $56 million to $9.5 million, while its stablecoin market capitalization fell from $12 million to $5.6 million.
The closure follows a similar shutdown announcement from fellow layer-2 network Blast. While some users who farmed reward points under Abstract's XP program expressed frustration over the absence of a token distribution, Schnetzler noted that launching a token lacking genuine underlying demand would not serve the community.
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