Four days after Ethereum Layer-2 chain Blast said its economics no longer worked, Founders Fund-backed Abstract reached much the same conclusion about its own Ethereum L2.
- Abstract, the consumer-focused chain built by Pudgy Penguins parent Igloo Inc., said in a Tuesday post on X that it will shut down on Dec. 15 after failing to make a standalone consumer blockchain sustainable.
Abstract
The timing makes the announcement harder to dismiss as just one struggling network.
Blast, another heavily funded Ethereum L2, announced its own closure on Oct. 2, saying the cost of running the chain had overtaken the revenue it generated and there was no credible path back to sustainability.
Abstract described the problem differently, pointing to thin liquidity, a restricted DeFi ecosystem, little institutional crossover and a smaller budget than competitors. But the conclusion was still pretty much the same. Operating a separate L2 no longer made economic sense.
Abstract deliberately bet against DeFi
That's especially notable because weak DeFi wasn't an accidental outcome of Abstract's strategy.
Igloo raised more than $11 million in 2024 in a round led by Peter Thiel's Founders Fund, alongside investors including 1kx, Fenbushi Capital, Everest Ventures Group and Selini Capital.
Founders Fund even argued that Pudgy Penguins gave Abstract something other chains had to spend heavily to acquire, an existing consumer distribution engine capable of bringing mainstream users on-chain.
- Abstract launched in January 2025 using ZKsync's ZK Stack, but positioned itself differently from L2s competing for trading volume and DeFi deposits.
- Its Portal let users create wallets with an email, while native account abstraction was meant to hide much of crypto's usual friction.
Luca Netz, Pudgy Penguins CEO and an Abstract co-founder, was unusually explicit about the choice. Shortly after launch, he said developers building the next DeFi application should use Berachain or Arbitrum instead.
"If it's not fun and viral there's no reason for you to build on Abstract," Netz said at the time.
Less than two years later, Abstract is citing its "restricted DeFi ecosystem" and thin liquidity among the reasons the model couldn't scale.
Blast reached the same exit
Blast started from almost the opposite direction. The Paradigm and Standard Crypto-backed L2 launched around yield, DeFi and native returns after raising $20 million.
At one moment, its TVL even topped $2 billion, but had fallen to roughly $32 million by the time the project announced its shutdown.
So far, Abstract says it onboarded more than 400,000 users, attracted 144 apps and worked with brands including Disney and Red Bull Racing.