Ethereum layer-2 network Blast is preparing to shut down, saying the expense of running the chain overtook the revenue it was bringing in. In a recent post on X, the project said it had not found a realistic route to an economically sustainable model.
The closure comes after a sharp contraction in assets on the network. Blast’s total value locked is now around $32 million, down from more than $2 billion before its mainnet launch in February 2024.
Shutdown plan and stated reason
The Block reported that Blast attributed the decision to a basic economic problem: maintaining the network had become more costly than the income generated by the layer-2 chain. According to the project’s statement, that imbalance left no realistic path forward for the network as an ongoing business.
The announcement marks an abrupt end for a project that had once drawn significant attention within the Ethereum scaling market. Blast launched in November 2023 after raising $20 million in a funding round led by Paradigm and Standard Crypto.
Users told to move assets back to Ethereum
Blast has instructed users to withdraw their assets to the Ethereum mainnet as the shutdown process moves ahead. The project said it will first start retrieving assets that had been deposited with Lido, a step it expects will take about a week.
After that retrieval process is completed, withdrawals are set to reopen through the Blast interface. Users will be able to use that interface until Oct. 26. Once that date passes, withdrawals will still be possible, but only by interacting directly with the Blast bridge contract on Ethereum.
TVL collapse and token reaction
The network’s current TVL of roughly $32 million illustrates how far activity has fallen. That figure compares with more than $2 billion before Blast’s mainnet went live in February 2024, highlighting a steep decline in capital held on the chain.
Market reaction to the shutdown news was also negative. After the announcement, the Blast token dropped 17%, bringing its market capitalization to about $23 million.
What happens next
The next confirmed step is the retrieval of assets deposited with Lido, which Blast said should take around a week. Only after that process is finished will withdrawals through the project’s own interface resume.
Users who do not complete their withdrawal by Oct. 26 will need to use the Blast bridge contract on Ethereum directly. Beyond that timetable, the project’s public message, as cited in reports, has focused on winding down the network rather than outlining any alternative operating plan.
Source: en.bloomingbit.io