Newsletter
- The Ethereum layer-2 network Blast supported by Paradigm will be shut down, as its operating costs are higher than its revenue, and there is no credible and sustainable path forward.
- Users are required to extract their assets through the Blast interface before October 26th. After that date, it is still possible to withdraw funds, but only through the bridging contract on Ethereum via Blast.
- Blast once held over $2.3 billion in assets, and now, like Zero Network, Sil, and Network, it has joined the list of tokens that have been discontinued from the Ethereum layer-2 network this year.
Ethereum’s layer-two network Blast, which once attracted billions of dollars in funds thanks to its built-in rewards and airdrop promises, is announcing its withdrawal.
The team stated on X on Friday that the cost of maintaining the operation of this network is now higher than its revenue, and they cannot see a credible path to make this chain economically sustainable. The team wrote: "Therefore, we have made a difficult decision to gradually shut down Blast."
The team requires users to migrate their assets back to the Ethereum mainnet, including the balances stored in Blast PWA (progressive web application). Blast indicates that the withdrawal delay will be shortened to 24 hours, but before that, withdrawals will be temporarily suspended for about a week in order to withdraw the network assets from the liquidity collateral protocol Lido.
Users are required to withdraw their assets through the Blast interface before October 26th. After that date, withdrawals will still be possible, but they can only be done by interacting directly with the bridge contract on Ethereum associated with Blast. It is stated that operational instructions will be published before that time.
Blast was launched in November 2023 by the team behind NFT Market Blur. It is primarily designed to provide automatic earnings for ETH and stablecoin balances. Paradigm co-led its $20 million seed financing round, although that institution publicly criticized its promotional claims at the time of its launch. Before the official launch of the platform, users had already deposited over $1.1 billion; by February 2024, when the mainnet went live, the assets locked in its bridge contracts exceeded $2.3 billion.
However, its development soon became fraught with difficulties. In March 2024, after the Ethereum Dencun upgrade, Blast temporarily ceased to produce blocks. In June 2024, it allocated BLAST tokens worth $354 million to users, but this disappointed many users. By that time, its total locked-up value had declined by about 30% from its peak of $2.3 billion.
Blast is not the only Layer 2 network to be shut down. In May of this year, wallet developer Zerion announced that it would shut down its Ethereum Layer 2 network Zero Network approximately 18 months later, giving users a deadline of July 31st to transfer funds across chains.
The Ethereum layer-2 network Sil associated with the South Korean exchange Korbit ceased to accept deposits on September 2nd. According to L2Beat data, users were given a withdrawal deadline until December 31st, and there are currently approximately $9.75 million in assets still on the chain.
A wider range of industries are also contracting. CoinEx, headquartered in Hong Kong, announced last month that it would close on December 22nd, joining the list of BitMEX and BitMart, becoming part of this year's wave of exchange closures.
