Blast to wind down after value locked falls more than 98%

Blast will wind down its Ethereum layer-2 network after operating costs overtook revenue, leaving users to move their assets to Ethereum. The Block’s report on Blast’s announcement says the project sees no credible path to making the chain sustainable. A layer-2 is a network built on top of Ethereum to handle transactions.

The decision comes as Blast’s total value locked (TVL), or the crypto held in its apps, has fallen from a peak of about $2.2 billion in June 2024 to roughly $32 million. That is a drop of more than 98%, according to Cointelegraph’s report, citing DeFiLlama data. Blast had attracted more than $2 billion in deposits before its mainnet, or live network, launched in February 2024.

Why is Blast closing the network?

Blast said the cost of maintaining the chain now exceeds the revenue it generates. The project said it could not see a credible way to make the network economically sustainable. It launched in November 2023 with a plan to build a self-sustaining chain for users and developers.

Blast had offered native yield on Ether and stablecoins, with returns generated through ETH staking and real-world asset protocols. The project automatically distributed those returns to users, The Block reported. But the network’s large early deposits did not translate into enough revenue to cover its running costs, according to the project’s explanation.

When can users withdraw their assets?

Users can withdraw through Blast’s regular interface until Oct. 26, the project said. Blast is asking users to move assets to Ethereum mainnet, including balances held in its PWA, or web app. After Oct. 26, assets will remain withdrawable, but users must use Blast’s bridge contracts on Ethereum directly.

Before regular withdrawals resume, Blast will withdraw its Lido assets, a process expected to take about a week. Withdrawals will be temporarily unavailable during that period. After it is complete, the withdrawal delay will be 24 hours, according to the project’s plan reported by The Block and Cointelegraph.

What does the 98% decline measure?

The decline refers to TVL, not the price of the BLAST token. DeFiLlama data cited by Cointelegraph puts Blast’s TVL at roughly $2.2 billion at its June 2024 peak and about $32 million now. The figure tracks assets deposited in apps on the network; it does not mean those assets disappeared. Users are being asked to withdraw them to Ethereum as Blast winds down.

References

• Block’s report on Blast’s announcement — theblock.co
• Cointelegraph’s report, citing DeFiLlama data — cointelegraph.com