Ethereum Layer-2 Blast Shuts Down After Assets Plunge 98%
Blast closes Ethereum network after two years
Blast, an Ethereum layer-2 blockchain network, is shutting down. The project announced the closure Friday, saying the economics of running the chain no longer work.
A layer-2 blockchain is a secondary network built on top of Ethereum that handles transactions more cheaply and quickly than the main Ethereum network. Over the years, Ethereum has launched many such layer-2 networks, but not all of them survive.
"Unfortunately, the economics of operating the chain no longer make sense," Blast said in a post on X. "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."
What the numbers show
- Total value locked on Blast peaked at over $2 billion in June 2024 and has fallen to $32 million, according to DeFiLlama data.
- Network revenue dropped to $1,793 last month, down from about $3.5 million in June 2024.
- Blast's native token, BLAST, fell 19% after the announcement and is down about 98% from its launch price.
- Before Blast even launched in 2024, users had deposited more than $1.1 billion, partly driven by expectations of a future token airdrop.
Why Blast could not sustain itself
The chain's finances deteriorated as speculative money moved elsewhere and user activity declined. Running a blockchain requires paying for development, infrastructure, and security — even when few people are using it.
Security costs have risen across the industry after a recent wave of crypto exploits, including a $270 million hack linked to North Korean intelligence. AI tools may also make it easier for attackers to find weaknesses in code, adding pressure on networks to spend more on security.
Competition has intensified as well. Large platforms with millions of users have launched their own Ethereum-based networks. Crypto exchange Coinbase rolled out its Base network, drawing activity from its existing user base. Robinhood also launched its own Ethereum-based network. These built-in audiences give those networks an advantage that standalone chains like Blast struggled to match.
What is still unclear
The article does not specify an exact shutdown date for Blast, nor does it detail what will happen to remaining user funds or the steps required for users to withdraw their assets from the network.
Why this matters
Blast's closure highlights a broader trend of consolidation in the blockchain space. As operating costs rise and larger platforms capture more users, smaller standalone networks may struggle to survive. The shutdown suggests that building a blockchain is not enough — without sustained user activity and revenue, even well-funded projects can become unsustainable.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.
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