Blast Shuts Down After $2.3B Ethereum L2 Peak

Blast, a Paradigm-backed Ethereum layer-2 network launched by the Blur team, is shutting down after concluding that operating costs exceed revenue and that it has no credible path to long-term sustainability. Blast attracted more than $1.1 billion in deposits before launch and reached over $2.3 billion in bridged total value locked before its February 2024 mainnet launch. It promoted built-in yield on ETH and stablecoins, then distributed about $354 million worth of BLAST tokens through an airdrop. User activity later weakened following technical problems and dissatisfaction with the airdrop. Blast’s TVL fell sharply from its peak to about $32 million, while monthly revenue dropped from roughly $3.5 million in June 2024 to $1,793 recently. The BLAST token fell 19% after the shutdown announcement and is down about 98% from its launch. Blast is asking users to withdraw assets to Ethereum. Withdrawals will pause for about a week while the network removes assets from Lido, then the delay will be reduced to 24 hours. Users can use Blast’s standard interface until 26 October. After that, funds will remain recoverable through Blast’s Ethereum bridge contracts, increasing attention on bridge risk and liquidity. The closure, alongside the wind-down of other smaller Ethereum layer-2 projects, highlights intense competition from networks such as Coinbase’s Base. For traders, it reinforces concerns over L2 token valuations, liquidity, operating costs and long-term sustainability.