Ethereum Layer 2 Blast to shut down as TVL drops more than 98% from peak

News Editor

2026-10-03 02:04:54

Ethereum Layer 2 network Blast said it will cease operations after concluding that the ongoing cost of maintaining the chain has exceeded the revenue generated onchain. In a post on X on Oct. 2, the team said it could not find a viable path to make the network economically self-sustaining and asked users to withdraw assets back to Ethereum mainnet, including balances held in Blast’s progressive web app. The normal withdrawal window will remain available until Oct. 26, 2026, though the first step in the shutdown process requires retrieving assets Blast placed in Lido, a process expected to take about one week and temporarily pause withdrawals. Data from DefiLlama shows Blast’s total value locked reached about $2.26 billion on June 6, 2024, but had fallen to roughly $32 million as of Oct. 3, a decline of more than 98%. Blast launched in November 2023 and promoted automatic yield on deposited ETH and stablecoins through ETH staking and real-world asset protocols. The Block previously reported that the project raised $20 million led by Paradigm and Standard Crypto, with mainnet going live in February 2024. The Block also said the BLAST token fell 17% on the day of the shutdown announcement, leaving its market capitalization at about $23 million.

Ethereum Layer 2 network Blast said it is winding down after deciding the cost to run the chain now exceeds the revenue it makes onchain.

In an Oct. 2 post on X, the team said it no longer sees a realistic path for the network to support itself economically, so it has chosen to stop operations.

Users asked to move assets back to Ethereum

Blast said every user should pull assets from Blast back to the Ethereum mainnet, including funds held in Blast’s progressive web app, or PWA.

The project said it plans to cut the withdrawal waiting time to 24 hours. But first comes the opening step of the shutdown: retrieving assets that Blast has parked in Lido, a process expected to take about one week. During that stretch, withdrawals will be paused.

Users can withdraw through the regular Blast interface until Oct. 26, 2026. After that, assets will still be recoverable, but users must interact directly with the Blast bridge contract on Ethereum mainnet. The team said it will publish detailed instructions before the deadline.

Blast wrote, "We are deeply sorry to the users and developers who trusted Blast, built on it, and supported this ecosystem."

TVL has fallen from $2.26 billion to about $32 million

Data from DefiLlama shows Blast’s total value locked reached about $2.26 billion on June 6, 2024. By Oct. 3, that number had dropped to about $32 million, a decline of more than 98% from the peak.

Blast launched in 2023 and mainnet went live in 2024

Blast launched in November 2023. It marketed automatic yield on deposited ETH and stablecoins, with returns coming from ETH staking and real-world asset protocols.

According to The Block, Blast raised $20 million at launch in a funding round led by Paradigm and Standard Crypto. Its mainnet went live in February 2024.

BLAST token fell 17% on the day of the announcement

The Block said the BLAST token slid 17% on the day Blast revealed the shutdown, leaving its market capitalization at about $23 million.

Blast had earlier carried out its first BLAST token airdrop in June 2024. According to Decrypt, that airdrop was worth about $354 million.

This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan.

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