Blast Off in Reverse: The $2.3B Layer-2 That Bridged Straight to the Exit 🪂

Ethereum layer-2 network Blast is winding down after its operating costs outpaced the revenue generated by the chain, the team said Friday in a post on X. "We launched Blast with the goal of building a self-sustaining chain for users and developers," the team wrote. "Unfortunately, the economics of operating the chain no longer make sense." The project said it sees no "credible path" to making the network economically sustainable and has asked users to migrate their assets to the Ethereum mainnet, including balances held in Blast's progressive web app (PWA).

The network will cut its standard withdrawal delay to 24 hours, though withdrawals will be temporarily paused for approximately one week while the team unwinds assets held through liquid staking protocol Lido. Users have until October 26 to withdraw through Blast's current interface. After that date, assets will remain accessible, but withdrawals will require users to interact directly with the Blast Bridge contract on Ethereum. The team said it will publish technical instructions for direct-contract withdrawals ahead of the Oct. 26 cutoff.

Blast was founded by Tieshun "Pacman" Roquerre, the founder of NFT marketplace Blur, which launched in October 2022 and surpassed then-leading OpenSea in trading volume by the end of that year. Roquerre unveiled Blast in November 2023 with native yield on Ether ($ETH) and stablecoins, along with a points program tied to an anticipated token airdrop. The strategy drew more than $1.1 billion in deposits before mainnet and more than $2.3 billion in its bridge by the February 2024 mainnet launch. Paradigm co-led a $20 million seed round, though the firm publicly criticized the launch's messaging at the time. The network briefly stopped producing blocks following Ethereum's Dencun upgrade in March 2024, and its June 2024 airdrop set aside $354 million worth of BLAST tokens, a distribution that many recipients viewed as underwhelming.

DeFi total value locked on Blast peaked at roughly $2.2 billion in June 2024 and has since fallen by more than 98%, according to DeFiLlama data. Blur's own TVL, which rose above $200 million at its early-2024 peak, now stands at about $27 million.

Blast is not the only layer-2 to fold this year. In May, wallet maker Zerion announced it would wind down Zero Network, its gasless Ethereum layer-2, after about 18 months, giving users until July 31 to bridge out. Silicon Network, an Ethereum layer-2 associated with South Korean exchange Korbit, stopped accepting deposits Sept. 2 and has set a Dec. 31 withdrawal deadline, with about $9.75 million still on the chain according to L2Beat data.