Blast to wind down Ethereum L2 after costs outpace revenue

Blast announced on X that it will wind down its Ethereum layer-2 network after determining the chain is not economically sustainable. The project said operating expenses outstripped revenue and that it does not see a credible way to continue running the network. Users were told to withdraw funds to Ethereum mainnet, with Blast reducing its withdrawal delay to 24 hours to accelerate the process. Withdrawals through Blast’s interface will be available until Oct. 26. Blast warned that withdrawals will be temporarily disabled while the network unwinds its Lido holdings, a process it expects will take about a week. After the Oct. 26 deadline, assets will still be reachable but only by interacting directly with Blast’s bridge contracts on Ethereum; Blast plans to publish step-by-step instructions for that method before the cutoff. Blast launched in November 2023, announced by Tieshun “Pacman” Roquerre of Blur, and deployed its mainnet in February 2024. The chain initially attracted heavy deposits via native yield on Ether and stablecoins and a points program tied to a potential token airdrop, drawing more than $2 billion in deposits before mainnet launch. However, its DeFi total value locked peaked near $2.2 billion in June 2024 and has since dropped by over 98%, according to DeFiLlama data. The decline at Blast mirrors broader setbacks at Blur, the NFT marketplace linked to its founder. Blur’s TVL fell from an early-2024 peak above $200 million to roughly $27 million at present. Blast’s decision to shut down underscores the difficulties some networks have faced sustaining growth and revenue after rapid expansion during the NFT and yield-driven market cycle.