This week, Pudgy Penguins launched its layer-2 network, Abstract, but the initial reception has been lukewarm despite a variety of incentives for new users. On its debut, the network achieved 711,000 user transactions. However, this impressive figure was overshadowed by its total value secured (TVS), which stood at a modest $33 million in ether (ETH) and stablecoins, a significant drop compared to the tens of billions associated with other prominent layer-2 networks.
Additionally, the network's decentralized exchange, NOXA, saw its total value locked (TVL) decline from $515,000 on launch day to $109,000, according to DefiLlama.
Marketed as igniting a "new era of consumer crypto," Abstract aims to simplify onboarding by enabling wallet creation via email. Users can earn "xp points" on the mainnet, which are redeemable for rewards, although some community members have expressed skepticism, prioritizing NFT trading over these benefits. Abstract mirrors other Ethereum-based layer-2 networks in its functionality, allowing users to bridge funds from different blockchains, trade tokens on decentralized exchanges, and launch tokens using platforms like zoo.fun.
However, CEO Luca Netz wants to redirect focus away from traditional DeFi applications, which typically draw significant liquidity on other networks.
Netz emphasized in an interview that the goal is "fun and viral" products, stating, "I’m optimizing for fun, viral, simple, stupid. If you want to build the next DeFi application, I really recommend you use Berachain or Arbitrum. Don't come to Abstract to build those types of products."
The launch coincided with a dip in the native token of Pudgy Penguins, PENGU, which declined by 7.6% in the past 24 hours and 41% throughout the week.
Meanwhile, the NFT market continues to experience a downturn compared to the boom of 2022. Although trading volume on OpenSea spiked in December due to airdrop rumors, it has now settled at around $15 million per day, a stark contrast to the $160 million per day observed three years ago.