Blast is shutting down its Ethereum layer-2 network after a sharp decline in activity left the project unable to generate enough revenue to cover operating expenses. The network once held more than $2 billion in crypto assets and now faces an increasingly competitive market as Coinbase and Robinhood develop their own Ethereum networks.
The project announced the shutdown Friday, slightly more than two years after launching. Blast said the cost of maintaining the chain had overtaken its revenue and that it could not find a credible route toward making the network financially sustainable.
BLAST, the project’s native token, dropped 19% following the announcement. The decline extended a broader selloff that has left the token roughly 98% below its launch price.
Blast entered the market with significant early momentum. More than $1.1 billion had been deposited before the network officially launched in 2024, with expectations of a future token airdrop helping attract users, according to CoinDesk.
That initial capital eventually moved elsewhere as speculative interest and network activity declined. DeFiLlama data shows Blast’s total value locked peaked above $2 billion in June 2024 but has fallen to about $32 million. Revenue from network usage has also collapsed, reaching only $1,793 last month compared with roughly $3.5 million in June 2024.
The shutdown adds to signs of consolidation across the blockchain sector, where smaller networks are facing pressure from declining activity and rising operating demands.
Running a blockchain requires ongoing spending on infrastructure, development and security, even when transaction volumes fall. A series of recent crypto exploits has placed additional focus on security requirements, while AI tools could make it easier to identify vulnerabilities in blockchain code.
Competition has also intensified as established consumer platforms launch networks that can draw on existing users.
Coinbase’s Base has benefited from the exchange’s large user base and developer ecosystem, while Robinhood launched its own Ethereum layer-2 earlier this year and quickly generated substantial onchain activity.
Smaller networks now have to compete more aggressively for developers, users and transaction fees. Blast’s shutdown underscores the challenge of maintaining a blockchain when network revenue falls below the cost of operating it.
Blast users have until Oct. 26 to move their assets back to Ethereum through the project’s interface. After that date, the team said in an X post, users will need to interact directly with the bridge contracts to withdraw their funds.
