Once a $2.3 Billion Network, Ethereum Layer-2 Blast Is Shutting Down

Blast, the Ethereum layer-2 network that once drew billions of dollars with promises of built-in yield and airdrops, is calling it quits.

The team said Friday on X that maintaining the network now costs more than it earns, and that it sees no credible path to making the chain economically sustainable. “As a result, we’ve made the difficult decision to wind Blast down,” the team wrote.

Users are being asked to move their assets back to Ethereum’s mainnet, including balances held in Blast’s PWA, or progressive web app. Blast said it will cut its withdrawal delay to 24 hours, but withdrawals will first pause for about a week while it pulls the network’s assets out of Lido, a liquid staking protocol.

Users have until Oct. 26 to withdraw through Blast’s regular interface. After that, funds will remain withdrawable, but only by interacting directly with Blast’s bridge contracts on Ethereum. Blast said it will publish instructions before then.

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Launched in November 2023 by the team behind NFT marketplace Blur, Blast pitched automatic yield on ETH and stablecoin balances. Paradigm co-led its $20 million seed round, though the firm publicly criticized the launch’s messaging at the time. Users deposited more than $1.1 billion before the network went live, and more than $2.3 billion was locked in its bridge by the February 2024 mainnet launch.

The ride got bumpy fast. Blast briefly stopped producing blocks after Ethereum’s Dencun upgrade in March 2024. Its June 2024 airdrop set aside $354 million worth of BLAST tokens for users but left many disappointed. By then, total value locked had already slid about 30% from its $2.3 billion peak.

Blast isn’t the only layer-2 to fold. In May, wallet maker Zerion said it would wind down Zero Network, its gasless Ethereum layer-2, after about 18 months, giving users until July 31 to bridge out.

Silicon Network, an Ethereum layer-2 associated with South Korean exchange Korbit, stopped accepting deposits Sept. 2. It has given users until Dec. 31 to withdraw, with about $9.75 million still on the chain, according to L2Beat data.

The broader industry is shrinking, too. Hong Kong-founded CoinEx said last month it will close Dec. 22, joining BitMEX and BitMart in a wave of exchange shutdowns this year.