An Ethereum L2 that started with an NFT community has announced its closure, but at the same time, traditional financial assets continue to enter the blockchain.
Recent seemingly unrelated events are revealing an increasingly obvious trend: Crypto is not growing in all directions; the application layer is being eliminated and restructured, while stablecoins, on-chain funds, and public chain infrastructure continue to advance.
Among these, the Ethereum L2 Abstract supported by Pudgy Penguins has announced its closure, becoming a notable case of project exit recently.
Abstract previously aimed to build an ecosystem around consumption, culture, and on-chain applications, but as competition in the L2 space intensified, the project ultimately chose to cease operations.
This does not mean that the Ethereum L2 space is cooling down overall, but it indicates that a reality is becoming more evident:
Having a chain does not equal having users, and having an ecosystem does not equate to being able to continuously obtain funding.
In the past few years, numerous projects have gained market attention by launching L2s, issuing tokens, or establishing independent ecosystems. However, as the market shifted from “telling stories” to a genuine assessment of users, transaction volume, and revenue, some projects lacking sustainable demand began to exit.
At the same time, another route is progressing rapidly.
Fidelity has recently further promoted on-chain access for parts of its treasury fund, allowing traditional financial products to have a more direct way of accessing the chain.
These products are completely different from “Crypto-native assets” of the past.
They correspond to traditional financial assets such as U.S. Treasury bonds, and the role of blockchain is gradually shifting from a simple transaction network to infrastructure for asset issuance, registration, transfer, and settlement.
Similar changes are also occurring in the stablecoin sector.
Arbitrum’s choice of USDG launched by Paxos reflects a competition that goes beyond just “adding one more stablecoin.”
For public chains, stablecoins mean trading liquidity, user entry points, and substantial on-chain capital. More importantly, the reserve assets behind stablecoins can generate returns, which has led public chains to start focusing on a new question:
How to retain the economic value brought by stablecoin reserves within their own ecosystems.
Therefore, stablecoins are gradually transforming from mere payment tools into crucial infrastructure for public chains to compete for funds and revenue.
Meanwhile, Ethereum itself continues to push forward with upgrades.
The next major upgrade for Ethereum, Glamsterdam, has already been deployed to the Sepolia test network, indicating that core development work is continuing to progress towards the mainnet.
When looking at these events together, it becomes apparent that Crypto is experiencing significant differentiation.
Abstract's closure represents that some applications and L2 projects are undergoing elimination; Fidelity’s fund going on-chain signifies that traditional financial assets are continuing to enter the chain; Arbitrum's competition for USDG illustrates that public chains are starting to vie for stablecoin economies; and the Glamsterdam test indicates that the underlying infrastructure continues to upgrade.
This may also be a noteworthy change in the next phase:
The competitive focus of Crypto is shifting from “who can tell the bigger story” to who can genuinely support funds, assets, and trading activities.
Projects might shut down, narratives may rotate, but if traditional financial assets continue to go on-chain, the scale of stablecoins expands, and public chains continually improve infrastructure, then on-chain finance itself could still become a longer-term mainline.
In other words, it's possible for a specific project to exit, but not necessarily the act of “going on-chain” itself.
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