Blast, a once-buzzy Ethereum Layer 2 network, is set to shut down later this month after a dramatic decline in activity left the scaler too costly to maintain.
Ethereum Layer 2 Network Blast to Shut Down After Revenue Collapse
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Key Takeaways
- Ethereum Layer 2 Network Blast is being shut down.
- Revenue and other key metrics on the network have collapsed since peaking in 2024.
- The BLAST token cratered further on Friday, now down 99% from its peak price.
Blast Heads for the Exits
Launched in early 2024, Blast hailed from the founder of NFT marketplace Blur, Tieshun “Pacman” Roquerre, and arrived with backing from prominent crypto venture capital firm Paradigm.
Teasing ample incentives ahead of a token launch, Blast lured users into staking $2.3 billion worth of crypto in a bridge from Ethereum ahead of the mainnet launch. But Blast failed to hold attention for long in a crowded Layer 2 field that includes heavyweights like the Coinbase-backed Base, and now it’s set to be depreciated in a matter of weeks.
“We launched Blast with the goal of building a self-sustaining chain for users and developers,” the network posted to X on Friday. “Unfortunately, the economics of operating the chain no longer make sense: 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.”
Data from Defillama shows about $32 million worth of assets locked within Blast-based protocols, down from a peak above $2.2 billion set in June 2024 near the token launch. Similarly, fee revenue on the chain has largely collapsed, falling from $3.66 million in June 2024 to just over $2,000 last month.
The network’s native BLAST token cratered in value following the Friday announcement, showing a more than 32% daily drop to a recent price of $0.00028, giving the token a market cap of less than $20 million. BLAST is now down 99% from its peak price of nearly $0.03 per token set in 2024.
Blast developers urged network users to withdraw assets back to the Ethereum mainnet, giving them a soft deadline of October 26 to do so. After that date, transferring assets will only be available via bridge contract interactions rather than Blast’s web interface, though the team said it will share instructions for doing so before that date.
“I’m disappointed that we weren’t able to make the chain sustainable over the long term, but I’m grateful to the users, developers, and teams who helped give Blast its moment, even if its run was shorter than we had hoped,” co-founder Roquerre wrote on X.
