Blast Layer 2 Network Shut Down Due to Unsustainable Economics
The Ethereum-based Layer 2 network Blast is shutting down due to unsustainable economics. The team announced that the costs of maintaining the network exceed its revenue, making it unprofitable to continue operations.
After launch in 2024, Blast attracted significant attention and users deposited over $1.1 billion on the platform. However, as user activity declined, the network's financial metrics worsened. The total value locked (TVL) peaked at over $2 billion in June 2024 but has dropped to $32 million. Network revenue fell even more sharply, from $3.5 million in June 2024 to just $1,793 last month.
The shutdown of Blast reflects a broader trend among blockchain networks, where competition is intensifying and smaller networks struggle to compete for developers, users, and fee revenue. The closure also highlights the importance of financial sustainability in maintaining network operations, including security costs that are increasingly under pressure due to hacker attacks and AI-based tools.