Ethereum layer-2 Blast plans shutdown after holding more than $2.3 billion

Blast plans to shut down its Ethereum layer-2 network, which once held more than $2.3 billion. The Blast team said Friday that maintaining the network now costs more than the network earns. The Blast team said the network has no credible path to economic sustainability. Users are being asked to move their assets back to Ethereum's mainnet, including balances in Blast's progressive web app. Blast said withdrawals will first pause for about a week while the network's assets are removed from liquid staking protocol Lido. Blast said the withdrawal delay will then fall to 24 hours. Users have until Oct. 26 to withdraw through Blast's regular interface. Funds will remain withdrawable after Oct. 26, but users will need to interact directly with Blast's bridge contracts on Ethereum. Blast said it will publish instructions before that deadline. The team behind NFT marketplace Blur launched Blast in November 2023 with promises of automatic yield on ETH and stablecoin balances. Paradigm co-led Blast's $20 million seed round. However, Paradigm publicly criticized the launch's messaging at the time. Users deposited more than $1.1 billion before the network went live. Blast's bridge held more than $2.3 billion by the February 2024 mainnet launch. Blast briefly stopped producing blocks after Ethereum's Dencun upgrade in March 2024. Blast's June 2024 airdrop allocated $354 million worth of BLAST tokens to users but disappointed many users. Blast's total value locked had already fallen about 30% from its $2.3 billion peak by the airdrop. Blast joins Zero Network and Silicon Network among Ethereum layer-2 networks winding down this year. Wallet maker Zerion said in May that it would wind down Zero Network, its gasless Ethereum layer-2, after about 18 months. Zerion gave Zero Network users until July 31 to transfer assets out through the bridge. Silicon Network, an Ethereum layer-2 associated with South Korea's exchange Korbit, stopped accepting deposits on Sept. 2. Silicon Network has given users until Dec. 31 to withdraw. L2Beat data shows about $9.75 million remains on Silicon Network. The broader industry is also shrinking. Hong Kong-founded CoinEx said last month that it will close on Dec. 22. CoinEx joins BitMEX and BitMart in a wave of exchange shutdowns this year.