Blast to wind down Ethereum network as costs top revenue

Blast said on Friday, Oct. 2, that it will wind down its Ethereum layer-2 network because the cost of maintaining it exceeds the revenue it earns. The team said it sees no credible path to making the chain sustainable, according to The Block’s report on Blast’s decision. A layer-2 is a network built to handle transactions separately from Ethereum’s main network. Blast is asking users to move their assets back to Ethereum.

The closure ends a project that offered automatic yield on ether and stablecoins. Blast said those returns came from ETH staking and real-world asset protocols. Its total value locked, or TVL—the value of assets held in its apps—has fallen to a little over $32 million, The Block reported, citing DeFiLlama. Blast had more than $2 billion in TVL ahead of its February 2024 mainnet launch.

How long can users withdraw through Blast’s interface?

Users can withdraw through the regular interface until Oct. 26, according to Decrypt’s report on the wind-down. Withdrawals will first pause for about a week while Blast removes its assets from Lido, a liquid staking protocol. After that process, withdrawals are set to resume with a 24-hour delay.

The date changes how users access their funds, but it is not a deadline after which the funds disappear. After Oct. 26, users will need to interact directly with Blast’s bridge contracts on Ethereum to withdraw. Blast said it will publish instructions before then. The request also applies to funds held in Blast’s progressive web app, or PWA.

What has changed since Blast’s early growth?

Blast attracted more than $2 billion in assets before its mainnet launch, helped by its promise of native yield on ether and stablecoins. The Block reported that the network now holds a little over $32 million in TVL, a steep fall from that earlier level. The project’s shutdown announcement points to operating costs and revenue as the reason for ending the network.

For users, the next step is to check their Blast balances and plan any withdrawal around the temporary pause and Oct. 26 interface deadline. Assets will remain withdrawable after that date, but the process will require direct use of the bridge contracts.

References

• The Block’s report on Blast’s decision — theblock.co
• Decrypt’s report on the wind-down — decrypt.co