Blast shuts down Ethereum layer 2 as costs exceed revenue

Blast, an Ethereum layer 2 network built by Blur founder Tieshun Roquerre, said on Oct. 2, 2026 that it will shut down because running the chain costs more than it earns. The team published the decision in a post on X, writing that it sees no credible path to making the network economically sustainable. The shutdown ends a run that once placed Blast among the largest layer 2 networks by deposits.

The team asked all users to move assets back to Ethereum mainnet, including balances held in the Blast progressive web app. In the same post, Blast set Oct. 26, 2026 as the last day for withdrawals through its normal interface. After that date, funds will stay recoverable only by interacting directly with the bridge contracts on Ethereum, and the team said it will publish instructions for that route before the cutoff.

Withdrawals face a short freeze first. Blast said it will begin by pulling its assets out of Lido, a process it expects to take about one week, and withdrawals will be unavailable during that period. Once the Lido exit finishes, withdrawals will resume with a shorter 24-hour delay, down from the longer waiting period users faced before, according to the announcement.

Roquerre, known as Pacman, founded Blast after building Blur into a challenger to OpenSea. Blur launched in October 2022 and passed OpenSea in trading volume by the end of that year on the back of token incentives for professional traders, as Cointelegraph wrote on Oct. 2. He unveiled Blast in November 2023 with native yield on ether and stablecoins plus a points program tied to a coming token airdrop. The tactic worked at first. Points seekers parked funds for months before the network opened fully, which pushed deposits past $2 billion ahead of the February 2024 mainnet launch, according to the Cointelegraph account.

Money arrived fast. Blast opened for deposits in November 2023 with withdrawals disabled and drew about $300 million within days, backed by a $20 million investment round, Unchained reported on Oct. 2. Its mainnet went live in February 2024, and the BLAST token arrived in June 2024 at an initial fully diluted valuation of $2 billion.

The deposits did not stay. DeFi apps on Blast held about $32 million on Oct. 2, down from a peak near $2.26 billion in June 2024, based on DefiLlama figures cited in the Unchained report. Cointelegraph gave the peak as roughly $2.2 billion and the fall as more than 98 percent, citing the same DefiLlama data. L2Beat counted about $90 million in total value secured on the chain, with around $50 million bridged through the canonical bridge.

The token fell with the network. BLAST traded near $0.00028 on Oct. 2, down about 32 percent over 24 hours and roughly 99 percent below its June 2024 high, with a market value near $20 million based on CoinGecko figures in that report. Blur has followed a similar slope, with its total value locked near $27 million against an early-2024 peak above $200 million, according to DefiLlama figures from Oct. 2.

Blast stood out at launch because yield was built into the chain itself. Ether and stablecoins bridged to the network were staked automatically, and the interest flowed back to holders instead of sitting idle. That pitch, paired with the points program, pulled in deposits before the network ran fully. The design also tied Blast to outside staking returns, which left its income exposed when user activity and fee revenue fell short of the cost of running the chain.

The team closed its message with an apology to users and developers who backed the network. Its priority now, the post said, is making the shutdown as smooth and safe as possible, starting with the Lido withdrawal and the shortened delay once exits reopen. In the same thread, the team warned users to watch for copycat accounts and to trust only the official @blast account. After Oct. 26, withdrawals need direct interaction with the bridge contracts on Ethereum, a route the team has not yet documented.