Blast shuts down Ethereum layer-2 network

The closure is a setback for one of Ethereum’s better-known layer-2 projects, which once ranked among the largest by total value locked. Blast said users have until Oct. 26 to pull funds through its interface, after which withdrawals will still be possible only by interacting directly with Blast bridge contracts on Ethereum.

Blast was launched by Tieshun “Pacman” Roquerre, the founder of Blur, during the NFT boom and drew more than $2 billion in deposits before its mainnet launched in February 2024. But demand faded with the broader NFT slump, and Blast’s DeFi total value locked has dropped more than 98% from a June 2024 peak of about $2.2 billion, according to DeFiLlama.

For investors, the shutdown is another reminder that crypto infrastructure winners are not guaranteed to stay winners if fee generation lags incentives and operating costs. The fallout also speaks to the tougher economics facing layer-2 networks that depend on transaction activity, liquidity and developer traffic to justify their own existence.

The news lands as Ethereum itself trades around $2,703, above both its 50-day moving average and 200-day moving average, while Adalytica’s Ethereum Fear & Greed Index shows greed at 73 but has eased sharply from the prior day. That mix suggests sentiment remains supportive even as individual ecosystems within Ethereum continue to face shakeouts.

Broader crypto sentiment remains constructive, with Bitcoin’s fear-and-greed reading at 81, but the Blast wind-down highlights how capital can rotate quickly away from networks that fail to sustain usage. The next catalyst is whether other layer-2 projects can prove they have a cleaner route to profitability, or whether Blast becomes a template for further consolidation.