- Blast will close its Layer 2 after operating costs exceeded network revenue.
- Users can withdraw through the normal Blast interface until October 26.
- BLAST fell 17% as the network prepared an orderly shutdown process.
The Blast shutdown will end the Ethereum Layer 2 after operating costs surpassed revenue. Blast announced the decision on October 2 and asked users to move assets to Ethereum mainnet. Meanwhile, BLAST dropped 17%, cutting its market capitalization to about $23 million.
Blast Shutdown Follows Sharp Decline in Network Activity
The Blast shutdown follows a steep decline in assets committed to the network. DeFiLlama data shows Blast now holds slightly above $32 million in total value locked. That compares with more than $2 billion before its February 2024 mainnet launch.
Blast designed the network around native yield for ETH and stablecoins. The platform generated returns through ETH staking and real-world asset protocols. However, current network revenue no longer covers the costs required to maintain the Layer 2.
The Blast shutdown marks a sharp reversal from the project’s early growth. Blast raised $20 million from Paradigm, Standard Crypto, and other backers in 2023. Nearly 200,000 early users helped push TVL above $2 billion before mainnet launched.
Blast Shutdown Gives Users Until October 26 for Withdrawals
The Blast shutdown process starts with the withdrawal of assets held through Lido. Blast expects that process to require about one week. Users cannot make withdrawals during this initial period.
Once Lido withdrawals finish, Blast plans to reopen transfers with a 24-hour delay. Users can then withdraw through the normal Blast interface until October 26. Afterward, users must interact directly with the bridge contracts on Ethereum.
The Blast shutdown does not make October 26 a final deadline for recovering assets. Funds remaining afterward can still move through the Ethereum bridge contracts. Blast plans to provide instructions for users who need that withdrawal method.
According to DefiLlama, about $63.03 million remained in Blast’s canonical Ethereum bridge on October 2. That figure excludes assets held inside decentralized applications running on Blast. The Blast shutdown therefore affects both bridged funds and remaining activity across the Layer 2 ecosystem.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.
