Ethereum Layer-2 Blast to Shut Down as Operating Costs Outpace Revenue
Key Takeaways
- •Blast, an Ethereum layer-2 network, is shutting down because operating costs have outpaced the revenue the chain generates.
- •The Blast team asked users to move their assets to Ethereum mainnet and will allow withdrawals through its interface only until Oct. 26, after which users must use the bridge contracts directly.
- •Withdrawals are temporarily unavailable while Blast unwinds its Lido assets, a process expected to take about one week, with the withdrawal delay reduced to 24 hours.
- •Founded by Blur creator Tieshun Roquerre, Blast launched in November 2023 with native yield and a points-based airdrop program, attracting more than $2 billion in deposits before its February 2024 mainnet launch.
- •Blast's total value locked peaked at roughly $2.2 billion in June 2024 and has since declined by more than 98%, according to DeFiLlama, mirroring a similar fall at Blur.
Ethereum layer-2 network Blast is shutting down, saying the cost of operating the chain has outpaced the revenue it generates.
In a Friday post on X, the Blast team said it sees no “credible path” to making the network economically sustainable and asked users to withdraw their assets to Ethereum mainnet.
“We launched Blast with the goal of building a self-sustaining chain for users and developers,” the team said. “Unfortunately, the economics of operating the chain no longer make sense.”
The network will reduce its withdrawal delay to 24 hours, though withdrawals will be temporarily unavailable while Blast unwinds its Lido assets (Lido is a liquid staking protocol for Ether), a process expected to take about a week.
Users will have until Oct. 26 to withdraw through Blast’s interface. After that date, assets will remain accessible, but withdrawals will require users to interact directly with the Blast bridge contracts on Ethereum (the contracts that hold the network’s bridged funds on mainnet), a more technical process than using a web interface. Blast said it will publish instructions for withdrawing through the bridge contracts ahead of the Oct. 26 cutoff and urged users to move their assets to Ethereum mainnet before then. The release of those instructions and the completion of the roughly week-long unwind are the key near-term markers of the shutdown’s progress.
Blast emerged from Blur’s NFT boom
Blast was founded by Tieshun “Pacman” Roquerre, the creator of NFT marketplace Blur. Blur launched in October 2022 and quickly challenged OpenSea by targeting professional traders with token incentives. By the end of 2022, Blur had surpassed then-leader OpenSea in trading volume and extended its lead into early 2023, fueled in part by its token airdrop and trader rewards.
Roquerre unveiled Blast in November 2023 with native yield on Ether (ETH) and stablecoins and a points program tied to an anticipated token airdrop — a model that spread across crypto during 2023 as projects competed for deposits ahead of token launches. The strategy helped attract more than $2 billion in deposits before the network’s mainnet launched in February 2024.
That growth proved difficult to sustain amid a broader downturn in the NFT market. Blast’s decentralized finance total value locked (TVL) declined steadily after peaking at roughly $2.2 billion in June 2024 and has since fallen by more than 98%, according to DeFiLlama data.
Blur has undergone a similar decline. Its TVL, which rose above $200 million at its early-2024 peak, now stands at about $27 million, per DeFiLlama.
