Paradigm-backed Blast plans to wind down network as costs exceed revenue

Ethereum Layer 2 Blast said on Friday that it will wind down its network because operating costs exceed revenue. Blast said it sees no credible path to making the chain economically sustainable. The BLAST token fell 17% on Friday, reducing its market capitalization to around $23 million. DeFiLlama puts Blast's current total value locked at a little over $32 million, down from more than $2 billion ahead of its February 2024 mainnet launch. Blast is asking users to withdraw their assets to Ethereum mainnet. Blast said it will first begin withdrawing its Lido assets, a process expected to take about a week. Blast said user withdrawals will be temporarily unavailable during that process. Blast said withdrawals will resume with a 24-hour delay once the Lido asset withdrawal process is complete. Blast said users will be able to withdraw through its normal interface until Oct. 26. Blast said users will need to interact directly with its bridge contracts on Ethereum after that date. Blast said its original goal was to build a self-sustaining chain for users and developers. Blast aimed to provide native yield for ETH and stablecoins through ETH staking and real-world asset protocols, with returns automatically distributed to users. Blast went live in November 2023 following a $20 million funding round led by Paradigm and Standard Crypto. Blast exceeded $2 billion in total value locked from nearly 200,000 early-access users ahead of its mainnet launch.