Summary
- Blast, a layer-2 network for Ethereum backed by Paradigm, is shutting down due to operational costs exceeding its earnings and a lack of sustainable solutions.
- Users must withdraw their assets by October 26 via Blast's interface; afterward, funds will only be accessible through Ethereum bridge contracts.
- Once valued at over $2.3 billion, Blast is part of a trend of Ethereum layer-2 networks shutting down this year, including Zero Network and Silicon Network.
Blast, the Ethereum layer-2 network that previously attracted billions with promises of yield generation and airdrops, has announced its closure.
The team shared on X that the network's operational expenses have outstripped its income, leaving no viable path to economic sustainability. "Consequently, we have made the tough decision to discontinue Blast," they stated.
Myriad: Predict Ethereum's next move.Users are encouraged to transfer their assets back to Ethereum’s main network, including any balances in Blast's progressive web app (PWA). To facilitate this, Blast will shorten its withdrawal delay to 24 hours, although there will be a temporary pause of about a week to extract the network's assets from Lido, a liquid staking platform.
The withdrawal deadline via Blast's regular interface is set for October 26. After this date, users can still retrieve their funds, but only by engaging directly with Blast's bridge contracts on Ethereum. The team plans to release detailed instructions before the deadline.
Blast was launched in November 2023 by the creators of the NFT marketplace Blur, promoting automatic yield on ETH and stablecoin deposits. Paradigm co-led its $20 million seed funding round, though the firm later criticized the project's initial messaging. Prior to its launch, users had deposited over $1.1 billion, with more than $2.3 billion locked in its bridge by February 2024.
The situation quickly deteriorated. Blast experienced a block production halt following Ethereum's Dencun upgrade in March 2024. An airdrop in June 2024 allocated $354 million in BLAST tokens to users, but many were left dissatisfied as total value locked had already dropped roughly 30% from its peak of $2.3 billion.
Blast is not the only layer-2 network shutting down. In May, Zerion announced it would wind down Zero Network, its gasless Ethereum layer-2, after 18 months, giving users until July 31 to migrate their assets. Similarly, Silicon Network, linked to the South Korean exchange Korbit, ceased deposits on September 2, allowing until December 31 for users to withdraw their remaining funds, which total approximately $9.75 million according to L2Beat data.
The overall industry is also contracting. Last month, Hong Kong-based CoinEx announced its closure on December 22, joining BitMEX and BitMart among the exchanges shutting down this year.