Blast to wind down Ethereum L2 after costs outpace revenue

What happened

Ethereum layer-2 (a network built on top of a blockchain to make transactions cheaper) network Blast is shutting down after its operating costs exceeded the revenue generated by the chain. Source: Blast The network will reduce its withdrawal delay to 24 hours, though withdrawals will be temporarily unavailable while Blast unwinds its Lido assets, a process expected to take about a week.

Roquerre unveiled Blast in November 2023 with native yield on Ether (ETH) and stablecoins (a digital token meant to hold a fixed value, usually one dollar) and a points program tied to an anticipated token airdrop. The strategy helped attract more than $2 billion in deposits before its mainnet launched in February 2024.

Once among Ethereum’s largest layer-2 networks by total value locked, Blast is urging users to move their assets to mainnet ahead of the shutdown. In a Friday post on X, Blast said it sees no “credible path” to making the network economically sustainable and asked users to withdraw their assets to Ethereum mainnet.

“Unfortunately, the economics of operating the chain no longer make sense.” Blast said it will publish instructions for withdrawing directly through the bridge contracts ahead of the Oct. 26 cutoff and urged users to move their assets to Ethereum mainnet before then.