Blast shuts down as operating costs exceed chain revenue

Ethereum layer-2 network Blast is shutting down after its operating costs exceeded the revenue generated by the chain. Blast was once among Ethereum's largest layer-2 networks by total value locked. Blast said in a Friday post that the network has no credible path to economic sustainability. Blast said its original goal was to build a self-sustaining chain for users and developers. Blast said the economics of operating the chain no longer make sense and urged users to move their assets to Ethereum mainnet. Blast will reduce its withdrawal delay to 24 hours. However, withdrawals will be temporarily unavailable while Blast unwinds its Lido assets, a process expected to take about a week. Users will have until Oct. 26 to withdraw through Blast's interface. Assets will remain accessible after the cutoff, but withdrawals will require users to interact directly with Blast bridge contracts on Ethereum. Blast said it will publish instructions for direct withdrawals through the bridge contracts before the Oct. 26 cutoff. Blast urged users to move their assets to Ethereum mainnet before that deadline. Tieshun "Pacman" Roquerre, the founder of NFT marketplace Blur, founded Blast. Blur launched in October 2022 and quickly challenged OpenSea by targeting professional traders with token incentives. Blur surpassed then-leading NFT marketplace OpenSea in trading volume by the end of 2022. Blur extended its lead in early 2023, supported in part by its token airdrop and trader rewards. Roquerre unveiled Blast in November 2023 with native yield on Ether (ETH) and stablecoins. Blast also offered a points program tied to an anticipated token airdrop. The strategy helped Blast attract more than $2 billion in deposits before its mainnet launched in February 2024. However, Blast's growth proved difficult to sustain amid a broader downturn in the NFT market. DeFiLlama data shows that Blast's decentralized finance total value locked has declined steadily from roughly $2.2 billion at its June 2024 peak, falling more than 98%. Blur has undergone a similar decline. Blur's total value locked now stands at about $27 million, down from above $200 million at its early-2024 peak.