Ethereum layer-2 network Blast is shutting down a little over two years after its launch, as declining activity and rising costs leave the blockchain unable to sustain operations. The project announced the closure on Friday, stating that the economics of running the chain no longer make sense.
According to the project team, the ongoing costs of maintaining Blast exceed the revenue generated by the layer-2 network, and there is no credible path to economic sustainability. Following the announcement, the native token BLAST dropped 19%, extending a decline that has left it down about 98% from its debut.
Blast initially drew significant interest prior to its 2024 launch, attracting more than $1.1 billion in user deposits driven by expectations of a token airdrop. Total value locked on the network ultimately peaked at over $2 billion in June 2024, according to DeFiLlama data. However, assets have since plummeted 98% to $32 million.
Network revenue has experienced a similar decline. Blast generated just $1,793 in network usage revenue last month, down from a peak of approximately $3.5 million in June 2024. The closure highlights a broader shakeout among blockchain networks, as smaller chains face rising development, infrastructure, and security costs while user activity fades.
Competition has also intensified as large consumer platforms introduce their own Ethereum-based networks. Coinbase launched its Base network, and Robinhood rolled out its own Ethereum layer-2 network, leaving smaller chains to compete for developers, users, and transaction fees in a crowded market.
Users have until Oct. 26 to withdraw their assets to Ethereum using Blast's interface. After that date, withdrawals will require interacting directly with bridge contracts.
