CryptoSlate
Blast said on Oct. 2 that it will shut down its Ethereum layer-2 network because maintaining the chain costs more than it earns. The native-yield project, which disclosed $20 million in funding from Paradigm and Standard Crypto in November 2023, asked users to move assets to Ethereum mainnet by Oct. 26 if they want to withdraw through its normal interface. Blast said it sees no credible path to making the network economically sustainable.
Why it matters
Blast was designed to pass returns from ETH staking and real-world-asset protocols to users. Its website identifies Lido and MakerDAO as yield sources. The shutdown shows that offering native yield has not been enough to cover the cost of operating this layer-2 network.
Blast must first withdraw assets from Lido, a process it expects to take about a week. User withdrawals will be unavailable during that unwind. Once it is complete, withdrawals will resume with a 24-hour delay. Blast has not specified an exact reopening date.
Market impact
The immediate issue for users is access to their funds, not the Oct. 26 date alone. Blast has urged users to move balances, including assets held in its web app, before then. Assets will remain withdrawable afterward, but users will have to interact directly with bridge contracts on Ethereum mainnet instead of using Blast’s normal interface. Blast said it will publish instructions for that route before the cutoff.
The roughly one-week Lido unwind and the 24-hour delay after withdrawals resume are separate stages. Users should distinguish both from the Oct. 26 interface cutoff when planning an exit.
Frequently asked questions
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Why is Blast shutting down its layer-2 network?
Blast says maintaining the chain costs more than it earns and that it sees no credible path to making the network economically sustainable.
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What happens to Blast withdrawals during the Lido unwind?
User withdrawals will be temporarily unavailable while Blast withdraws assets from Lido, a process expected to take about a week. Blast has not specified an exact reopening date.
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What withdrawal delay will apply when Blast reopens exits?
Withdrawals will resume with a 24-hour delay after the Lido unwind is complete. That delay is separate from the temporary withdrawal pause.
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Can users still withdraw from Blast after Oct. 26?
Yes. Assets will remain withdrawable, but users will need to interact directly with bridge contracts on Ethereum mainnet rather than use Blast’s normal interface.
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Does the Oct. 26 cutoff apply to assets in Blast’s web app?
Blast has urged users to move assets to Ethereum mainnet before Oct. 26, including balances held in its web app.
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