Blast Shuts Down Layer 2 Network Amid Unsustainable Operating Costs

Blast, a crypto infrastructure project, is shutting down its Ethereum Layer 2 network due to unsustainable operating costs. According to a statement from the team, the ongoing cost of maintaining the chain exceeds the revenue generated by the Layer 2 network.

The project had launched in November 2023 with a $20 million funding round led by Paradigm and Standard Crypto, and had attracted nearly 200,000 early-access users before its mainnet launch in February 2024.

However, the total value locked on Blast has plummeted from over $2 billion to just above $32 million, putting pressure on other crypto infrastructure projects to demonstrate sustainable economics.

The BLAST token dropped 17% on Friday, reducing its market capitalization to $23 million, reflecting investor concerns over the project's viability and the risk of rapid value erosion in the crypto sector.