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🐳 Daily Edition: Abstract Becomes Second L2 to Wind Down in a Week

🐳 Daily Edition: Abstract Becomes Second L2 to Wind Down in a Week

Despite the massive head start the Pudgy Penguins ecosystem provided Abstract, it was doomed from the start - and now users are left holding the bag

Beluga & Will McKinnon
October 07, 2026

Another tombstone has been added to the Layer 2 graveyard as Abstract becomes the second to announce its shutdown in less than a week, of course preceded by everyone’s favorite points farming chain Blast. CEO Luca Netz issued a statement which explained the difficult decision, detailing the tens of millions in losses the Igloo Inc parent company absorbed in order to keep the chain running for 18 months.

Despite trying opposite playbooks (Blast hammered token incentives while Abstract never reached TGE), the outcome and the reasons thereof are virtually the same: running a chain is expensive, and theirs made no money. In the case of Abstract, they had the advantage of launching with existing distribution outside of crypto via their consumer brand, with an added wallet UX that handled gas fees and seed phrases on behalf of the user. In other words, despite solving the two biggest problems most people claimed blockchain had for years, it didn’t result in much of anything.

These failures are not contained to only L2’s, as we’ve seen several L1’s announce shutdowns this year and I suspect we’ll see many more. Robinhood is arguably the only new chain that has caught any serious bid in the last 12 months, which makes it an incredibly interesting case study. My conclusion is a pretty simple one: most people who are currently using crypto (or might be persuaded to do so) are here for the sole reason of making money. As we’ve seen time and again with chains like Bittensor or Gram (formerly TON), even if the UX is abysmal, if there are money making opportunities there will be users.

Robinhood was able to leverage their broader public appeal, eventual exchange listing hopes and the (somewhat) novel narrative of tokenized stocks to create a powerful storm of liquidity. In Abstract’s case, the mass onboarding of normies they worked for never happened, and thus there was never any real perception of financial gain for crypto natives.