Blast Cuts Losses, Shuts Down Ethereum Layer-2 Network Amid Unsustainable Costs

Blast's Ethereum layer-2 network will shut down on an unspecified date after October 26, forcing users to withdraw their assets by then. The project raised $20 million from Paradigm and Standard Crypto but concluded that operating costs now exceed revenue.

The team cited economic unsustainability as the reason for shutting down the L2, stating there is no credible path to achieving profitability. Withdrawals will be temporarily unavailable for about a week while Blast withdraws its Lido-staked assets, followed by a 24-hour withdrawal delay.

A high-profile exit, Blast's shutdown highlights funding and adoption risks for Ethereum layer-2 projects. The team apologized to users and developers who built on the chain, warning them of potential scams impersonating Blast.