Ethereum L2 Blast shuts down as BLAST token crashes 99% from peak

Ethereum Layer-2 network Blast (BLAST) is winding down operations, claiming that the economics of maintaining the chain are no longer sustainable.

Blast to shut down due to low liquidity and high maintenance

In an X post on Friday, Blast noted that the decision follows a widening gap between the network's operating costs and the revenue it generates.

“We launched Blast with the goal of building a self-sustaining chain for users and developers. Unfortunately, the economics of operating the chain no longer make sense,” the team wrote.

Chain revenues for the L2 dropped to a low of $110 in the past 24 hours, according to DefiLlama data, with chain fees standing at $124. The team noted that this decline cannot match the costs of sustaining the chain, making the chances of continuity very slim.

“The ongoing costs of maintaining Blast exceed the revenue generated by the L2, and we do not see a credible path to making the chain economically sustainable,” the team stated.

The network also holds roughly $24.7 million in total value locked (TVL), compared with more than $2.26 billion in June 2024.

Blast launched in November 2023 following a $20 million funding round led by Paradigm and Standard Crypto. The network was initially built around a native-yield model, with ETH and stablecoins deposited on the chain generating yield through underlying protocols.

Users given October 26 withdrawal deadline

The collapse in activity has now prompted the team to begin an orderly wind-down rather than continue operating the network at a loss.

Blast is asking users to move their assets back to Ethereum mainnet as part of the shutdown process.

The first stage involves withdrawing Blast's assets from Lido, a process the team expects to take approximately one week. During that period, user withdrawals will temporarily be unavailable. Once the Lido withdrawal process is complete, withdrawals will resume with a 24-hour delay.

Users will then have until October 26 to withdraw assets through Blast's normal interface.

“After that date, users will need to interact directly with the bridge contracts on Ethereum,” the team stated.

Blast noted that assets will remain recoverable after the interface deadline, although users will need to complete the process directly through the Blast bridge contracts on Ethereum L1.

“We're sorry to the users and developers who believed in Blast, built on it, and supported the ecosystem. Our priority now is making the shutdown as smooth and safe as possible,” the team added.

The shutdown marks a significant reversal for a network that was once among Ethereum's larger Layer-2 ecosystems by total value locked (TVL).

BLAST plunged following Friday’s announcement, extending a prolonged decline that has left the token roughly 99% below its peak. The token is trading at $0.0³24, down 47% over the past 24 hours at the time of writing.