Blast Layer 2 to Shut Down, Users Face $51M Withdrawal Hurdle

The crypto network Blast, which had $2.24 billion in value locked in June 2024, is closing down. Over the last 24 hours, it generated just $110 in revenue.

Blast operates as a Layer 2 (L2) network, a more affordable side chain built on Ethereum. It offered interest on deposited funds and pledged a token incentive. Users were drawn by that reward. Following the announcement, the Blast (BLAST) token dropped 19%.

Why Blast Is Shutting Down Now

On Friday, the development team stated that the chain's operating costs exceed its revenue, and no viable solution is apparent.

Blast will be shutting down.

We launched Blast with the goal of building a self-sustaining chain for users and developers. Unfortunately, the economics of operating the chain no longer make sense: the ongoing costs of maintaining Blast exceed the revenue generated by the L2, and…

— Blast (@blast) October 2, 2026

Tieshun Roquerre, who goes by Pacman online, is the creator of Blast and also founded Blur, a marketplace for non-fungible tokens. He shared a farewell message of his own.

“I’m disappointed that we weren’t able to make the chain sustainable over the long term, but I’m grateful to the users, developers, and teams who helped give Blast its moment, even if its run was shorter than we had hoped,” Pacman said.

According to DefiLlama, the total value locked on Blast has plunged to $32.3 million from its 2024 high, a decline of close to 99%.

Blast had posted negative revenue in March. The network had raised $20 million from venture investors.

Who Holds the Keys to Users’ Last $51 Million

L2BEAT, a platform that evaluates network security, reports that roughly $51 million in bridged assets from Ethereum remain in Blast's contracts. The bulk of that, $46.6 million, consists of staked ETH deposited with Lido, a yield service.

This explains why withdrawals are initially paused. Blast needs to withdraw its funds from Lido, a process that takes roughly one week. Once that is done, the withdrawal period shortens from seven days to 24 hours.

Users have until October 26 to utilize the standard application. After that date, they will need to interact directly with Blast's smart contracts on Ethereum.

According to L2BEAT, five key holders control those contracts. Any three of them can modify the contracts immediately or halt withdrawals. The fraud-proof mechanism on Blast, intended to allow anyone to dispute an incorrect record, was never fully operational.

“A malicious proposer can finalize an invalid state, which can cause loss of funds,” read an excerpt on the page.

L2BEAT points out the design risk but does not claim any wrongdoing.

Blast now joins a string of 2026 closures, including Lisk's blockchain shutdown and Bitcoin Layer 2 Botanix. Its deposits accumulated within weeks. Two years on, the network generates $110 daily.