News02 October, 20263 min read

Blast told developers to "ditch other L2s." Now it's shutting itself down

Blast attracted more than $2 billion before its mainnet even launched. Today, the chain says the economics no longer work.

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How it works

Blast, the Ethereum Layer-2 created by Blur founder Tieshun "Pacman" Roquerre, is shutting down less than three years after launching with backing from some of crypto's biggest investors and more than $2 billion deposited before its mainnet was even live.

The project said in a Friday post on X that keeping the network running now costs more than the chain brings in.

"Unfortunately, the economics of operating the chain no longer make sense: the ongoing costs of maintaining Blast exceed the revenue generated by the L2, and we do not see a credible path to making the chain economically sustainable."

Blast

Users have been asked to move their assets back to Ethereum by Oct. 26.

Blast started with a very different pitch

Blast emerged in late 2023 with an unusual promise. ETH and stablecoins deposited on the network would automatically earn yield, while developers could collect revenue generated from gas fees.

The project raised $20 million from Paradigm, Standard Crypto and other investors before launching its mainnet in February 2024. By then, users had already deposited more than $2 billion while waiting for the network to open.

The network was particularly aggressive when pitching developers. Its developer website, which remained online as of Friday evening, tells builders that "it's time to ditch other L2s" and says Blast offers the features of rival networks while providing "10x more value."

The same page argues that other layer 2 networks keep their gas-fee revenue, while Blast gives that money back to developers. Builders could either keep the revenue or use it to subsidize users.

The activity didn't last

The billions that arrived around launch have since largely disappeared. As of press time, DefiLlama shows about $65 million locked in Blast as TVL and roughly $118 million still bridged to the network.

And yet, Blast generated less than $10 in chain revenue over the previous 24 hours, according to the data platform.

Blast didn't say whether its decision to return gas revenue to developers played any role in the economics behind the shutdown.

For now, withdrawals will temporarily pause while the project unwinds assets held through Lido, a liquid staking protocol. They are expected to resume afterward with a 24-hour delay.

After Oct. 26, funds will still be recoverable, Blast said, but users will have to interact directly with its bridge contracts on Ethereum instead of using the normal interface.

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