QuantCapOnce home to more than $2 billion in crypto assets, Blast is shutting down as activity fades, costs rise, and bigger platforms like Coinbase and Robinhood build networks of their own.
Once a $2 billion Ethereum layer-2, Blast is shutting down after assets plunge 98%
Once home to more than $2 billion in crypto assets, Blast is shutting down as activity fades, costs rise, and bigger platforms like Coinbase and Robinhood build networks of their own.
Blast said it will shut down after concluding that its Ethereum layer-2 network no longer makes economic sense to operate. The closure points to consolidation among blockchains as security costs rise and platforms such as Coinbase and Robinhood build their own networks. Blast activity has dried up after its speculative peak, with assets on the network falling 98% from $2.2 billion in June 2024.
Ethereum layer-2 network Blast is shutting down, a little over two years after its launch, as fading activity has left the blockchain unable to cover its operating costs.
“Unfortunately, the economics of operating the chain no longer make sense," the project said Friday in a post announcing the closure. “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."
Its native token, BLAST, fell 19% after the announcement, extending a steep decline since its debut. The token is now down about 98% from launch.
At its launch, Blast drew heavy interest early on. Before the network even went live in 2024, users had deposited more than $1.1 billion, fueled in part by expectations of a token airdrop, CoinDesk reported at the time.
The chain’s economics deteriorated quickly as speculative capital moved elsewhere and activity faded. Total value locked peaked over $2 billion in June 2024, according to DeFiLlama, and has since fallen to only $32 million. Meanwhile, Blast generated just $1,793 in revenue from network usage last month, down from a peak of about $3.5 million in June 2024, DeFiLlama data shows.
Its demise points to a broader shakeout among blockchain networks.
Running a chain means paying for development, infrastructure and security even after user activity dries up. A recent wave of crypto exploits has drawn additional attention to security spending, while AI tools may also make it easier for attackers to probe code for weaknesses.
Competition is getting tougher, too.
Large consumer platforms with built-in distribution have launched their own Ethereum-based networks. Crypto exchange Coinbase COIN$183.06 rolled out Base and has turned its exchange users and developer ecosystem into a source of activity, while Robinhood HOOD$113.82 launched its own Ethereum layer-2 network earlier this year, with massive early onchain activity.
That leaves smaller chains fighting for developers, users and transaction fees in an increasingly crowded market. Blast's closure shows what may happen when the economics no longer add up.
Users have until Oct. 26 to withdraw assets to Ethereum through Blast's interface, the team said in the X post. After that, withdrawals will require interacting directly with bridge contracts.
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