Blast plans layer-2 shutdown and sets October 26 deadline for normal withdrawals

Blast said on October 2 that it will shut down its Ethereum layer-2 network because maintaining the chain costs more than the network earns. Blast said it sees no credible path to making the network economically sustainable. Blast plans to wind down the chain through an asset withdrawal process that will temporarily interrupt users' ability to exit.

Blast asked users to move their assets to Ethereum mainnet by October 26 to withdraw through the normal interface. The withdrawal request includes balances held in Blast's web app, which the announcement calls the PWA. Blast encouraged all users to withdraw before October 26.

Blast said it will first withdraw its assets from Lido, a process expected to take approximately one week. User withdrawals will be temporarily unavailable during that process, even after the network reduces its withdrawal delay to 24 hours. Blast said withdrawals will resume with the new 24-hour delay once the Lido process is complete. The approximately one-week interruption and the withdrawal delay after reopening are separate parts of the exit timetable. Blast's announcement does not specify an exact date when normal withdrawals will resume.

Blast said assets will remain withdrawable after October 26, but users will need to interact directly with its bridge contracts on Ethereum mainnet. Blast promised to publish detailed instructions for that withdrawal route before the deadline.

Blast disclosed $20 million in funding from Paradigm and Standard Crypto on November 20, 2023, nearly three years before the shutdown decision. The network opened early access that November, with a mainnet launch then planned for February 2024. Blast's documented design describes an Ethereum-compatible optimistic rollup that passes yield from ETH staking and real-world-asset protocols to users. Blast's website identifies Lido and MakerDAO as yield sources and lists additional investors among Blast's backers. The yield model was intended to let holders benefit from returns earned by those underlying protocols. However, Blast now says the operating economics no longer justify keeping the network running.