Blast shuts down with about $51 million still in its contracts

Blast, a Layer 2 network that runs on Ethereum, is shutting down. Blast held $2.24 billion in June 2024. Blast earned $110 in chain revenue in the past day. Blast's team said on Friday that the chain costs more to operate than the chain earns, with no credible fix in sight. Blast provided a cheaper network, paid interest on deposits and promised a token reward that attracted funds. The BLAST token fell 19% on the shutdown news. Founder Tieshun Roquerre, known as Pacman, also built Blur, a marketplace for digital collectibles. Roquerre expressed disappointment that Blast could not become sustainable over the long term. Roquerre thanked users, developers and teams and said Blast's operation was shorter than hoped. DefiLlama data shows that value locked on Blast fell to $32.3 million from its 2024 peak, a decline of nearly 99%. Blast posted negative revenue in March, when the financial strain was flagged. Blast had raised $20 million from investors. Network safety assessment site L2BEAT says about $51 million bridged from Ethereum remains in Blast's contracts. L2BEAT says $46.6 million of that amount is staked ETH held with Lido, an interest service. Withdrawals initially freeze because Blast must withdraw its funds from Lido, a process that takes about a week. The withdrawal waiting period then falls from seven days to 24 hours. Users have until October 26 to use the normal app. Users must interact directly with Blast's contracts on Ethereum after that deadline. L2BEAT shows that five keyholders control those contracts. Any three keyholders can instantly change the contracts or pause withdrawals. Blast's fraud-proof system, intended to let anyone challenge a false record, never fully worked. L2BEAT warns that a malicious proposer can finalize an invalid state, potentially causing a loss of funds. L2BEAT flags the design risk but does not allege misuse. Blast joins a series of 2026 closures that includes Lisk's blockchain shutdown and Bitcoin Layer 2 network Botanix. Blast attracted deposits within weeks, but two years later the chain earns $110 a day.