Blast, the Ethereum layer 2 network launched by the team behind the Blur NFT marketplace, is shutting down.
Users have until 26 October to withdraw funds through Blast’s own interface. The team said on Friday that operating costs now exceed the revenue the network generates, with “no credible path to sustainability.”
Why it is closing
Blast was built to attract deposits rather than activity. It paid native yield on ETH, through staking, and on its USDB stablecoin, and ran a points programme that rewarded users for parking funds on the network ahead of a token airdrop. Deposits poured in. Usage did not follow.
Once the airdrop was paid in June 2024, the reason to stay went with it. Monthly revenue has fallen from about $3.5m that month to under $2,000. Active addresses have dropped from around 37,000 at launch to about 2,600, and fees collected on the network’s decentralised exchanges now run to a few hundred dollars a day.
Blast was also squeezed from outside. Base, Arbitrum and Optimism now take around 80% of the sequencer fees earned across Ethereum layer 2s, leaving smaller networks competing for what is left.
What users need to do
Withdrawals are paused for about a week while Blast unwinds the staked ETH it holds through Lido, the liquid staking protocol. Once that is done, the withdrawal delay drops to 24 hours.
The 26 October deadline applies to the interface only. After it, funds can still be withdrawn, but only by interacting with the bridge contract on Ethereum directly, which is a harder process for most users.
From $2.3bn to $63m
Blast drew $2.3bn into its bridge by the time its mainnet went live in February 2024. It was backed by a $20m seed round co-led by Paradigm in 2023, and distributed a $354m airdrop.
The money did not stay. The canonical bridge now holds about $63m, a fall of more than 97% from the peak. DeFi activity on the network itself stands at roughly $21m.
The token
BLAST fell 44.5% on the announcement to about $0.00022, giving it a market value near $16m. Its all-time high of $0.52 was set in June 2024, the month of the airdrop. It now trades more than 99.9% below that level.
Blast is the clearest example yet of a network built on incentives rather than demand. Deposits arrived for points and an airdrop, and once the rewards were paid, the users left with them.
