Blast, an Ethereum layer-2 network founded by Blur creator Tieshun “Pacman” Roquerre and backed by venture firm Paradigm, announced on October 2 that it will permanently shut down. The team cited operating costs that now surpass the revenue generated by the chain and said it sees no credible path to long-term economic sustainability.

The decision ends a project that launched its mainnet in February 2024 after drawing more than $2.3 billion in deposits through a bridge from Ethereum. Blast had marketed native yield on ether and stablecoin balances as a core feature, attracting significant capital ahead of its token launch and airdrop.

Sharp Decline in Activity and Metrics

Total value locked on Blast peaked above $2.2 billion in June 2024 near the token launch. It has since fallen roughly 98 percent to approximately $32 million, according to data from DefiLlama. Network fee revenue followed a similar trajectory, dropping from a high of about $3.5 million to $3.66 million in June 2024 to just over $1,800 to $2,000 in the most recent month.

The native BLAST token also suffered steep losses. It traded near $0.00028 after the announcement, representing a decline of 98 percent to 99 percent from its 2024 peak near $0.03. The token’s market capitalization stood below $20 million to $30 million, and it fell further by 19 percent to more than 30 percent on the day of the news.

Withdrawal Timeline and Process

Users have been instructed to move all assets back to the Ethereum mainnet, including balances held through the Blast progressive web app. The standard interface will remain available for withdrawals until October 26.

Before full withdrawals resume, the network will first unwind positions held through the Lido liquid staking protocol. That process is expected to take about one week, during which withdrawals will be temporarily unavailable. Once complete, the withdrawal delay will be reduced to 24 hours.

After the October 26 deadline, assets will still be recoverable, but users must interact directly with Blast’s bridge contracts on Ethereum rather than the web interface. The team said it will publish detailed instructions for that process before the cutoff and strongly encouraged holders to complete transfers earlier.

Context of Launch and Competitive Pressures

Blast emerged from the team behind the Blur NFT marketplace and raised a $20 million seed round co-led by Paradigm. Its pre-launch campaign generated more than $1.1 billion in deposits before mainnet activation, later climbing past $2.3 billion locked in the bridge. The network briefly experienced an outage following Ethereum’s Dencun upgrade in March 2024 and saw mixed reactions to its June 2024 airdrop of tokens valued at roughly $354 million at the time.

The shutdown occurs amid broader consolidation among Ethereum scaling solutions. Larger platforms with built-in user bases, such as Coinbase’s Base and Robinhood’s layer-2 network, have captured significant activity. Running a dedicated chain requires ongoing spending on development, infrastructure and security even as transaction volume declines, a challenge that has also led other smaller layer-2 projects to wind down earlier this year.

Blast did not release detailed figures on its exact operating expenses or remaining revenue streams. The team stated that its immediate priority is ensuring an orderly process so users can safely return assets to Ethereum mainnet.