Abstract gives 93,000 weekly active addresses until December 15 to leave its chain

Divide Abstract's traffic by its addresses and the chain looks busy: more than 93,000 weekly active addresses ^[4], each sending at most about 17.6 transactions a week ^[21]. Divide its money the same way and it looks thin. Secured value fell more than 90% from a peak above $291 million ^[3], which leaves less than $29.1 million ^[20], or under about $313 per weekly active address ^[23]. That last figure is rough, since secured value is not the same as user balances and one holder can run many addresses.

Netz, whom Cryptopolitan identifies as the founder of Pudgy Penguins, gave the reason in an X statement. "After losing tens of millions of dollars over two years, building consumer products, assembling an all-star team, onboarding some of the biggest brands in the world, and building a community of millions, we still had not found product-market fit," Netz said ^[7]. Igloo, the company behind Pudgy Penguins, had backed the chain for those two years ^[8]. Without a token launch ^[6], the sponsor raises no outside money to pay for a third year, and its attention moves to the Penguins community ^[9].

Cryptopolitan's wider case is that Ethereum layer-2 activity is elevated but users are concentrated in a few leading chains ^[16], with the layer-2 share of economic activity back above 30% ^[17]. The article does not give chain-by-chain shares, so the degree of concentration cannot be checked from it. The closures also differ in kind. Zero Network and Sophon shut with practically no economic activity, and Sophon also had unsustainable gas economics ^[15]. Abstract shut while its traffic was still running.

I see three readings of this year's list. The first is Cryptopolitan's: usage decides. It names diminished usage and liquidity as the main cause of the shutdowns ^[2], and says Abstract stagnated because it had limited DeFi projects and limited usage ^[19]. The second is that sponsors decide, closing a chain once its backer stops covering the losses. The third is Lisk's route, where a chain ends its own layer-1, with its 100 validators, and keeps the brand alive as an Ethereum rollup ^[14].

I think the second reading fits the evidence best. Abstract closed with traffic and without money. Polygon made the same kind of cut: it kept the network that carries payments and Polymarket traffic ^[12] and closed its zkEVM version, which never grew traffic or liquidity ^[13]. The counter-thesis is that Abstract's traffic was itself paid for by the sponsor, so the stagnation Cryptopolitan describes would have closed it anyway. If the next chain to close still has a funded sponsor and most of its value, usage is the better explanation and this view is wrong.