Blast to Wind Down Layer 2 Network After Operating Costs Outpace Revenue

Blast will begin a gradual shutdown of its Layer 2 network after concluding that ongoing operating and maintenance expenses have risen above the revenue generated by the chain, leaving no "viable path" to economic sustainability, according to a notice cited by CoinMarketCap. Users can withdraw via Blast's standard interface until October 26, 2026. Blast also urged users on October 2 via X to move funds to the Ethereum mainnet, including any balances held in Blast PWA. The team said withdrawals through the standard interface will be temporarily unavailable for about one week while it extracts Lido assets held by Blast. Even after the withdrawal delay is reduced to 24 hours, the withdrawal function will not be restored until the Lido process is complete. Once finished, withdrawals will resume with a new 24-hour waiting period. For users who do not complete withdrawals through the standard interface by the October 26 deadline, Blast said assets can still be recovered by interacting directly with the project's bridge contract on Ethereum Layer 1. The team said it will publish step-by-step instructions for contract-based withdrawals ahead of the deadline. Blast said its priority is to keep the wind-down process smooth and secure for users and developers that built on or supported the network. Blast has previously been described as built by Blur founder Pacman and backed by Paradigm. In related background, crypto.news reported in May 2025 that Blast ended its integration with Safe, citing third-party risk and availability concerns while it prepared its own multisignature wallet solution. Blast said users who accessed the multisig via the Safe interface could use BrahmaFi's custodial interface or self-custody, and it planned to integrate multisig functionality into Blast Mobile. The newsletter also highlighted U.S. tax considerations. The IRS generally treats transfers of digital assets between a taxpayer's own wallets, addresses, or accounts as non-taxable, with exceptions when digital assets are used to pay transfer fees or are withheld for such fees. Using digital assets to pay for goods or services is treated as a disposition that may trigger capital gains or losses. Exchanging digital assets for other property, including assets different in kind or degree, may also produce capital gains or losses, and is distinct from a self-transfer. The Blast ecosystem has seen other closures and signs of revenue pressure. Fantasy Top announced a shutdown earlier this year, saying it would refund pre-seed and seed investors at a 1:1 ratio per dollar invested and that it had been self-funded for two and a half years. The team said about $20 million had been returned to the community through ETH, BLAST, and player rewards, and that roughly 70% of lifetime revenue came in the first month after mainnet launch. A May 21 report cited DeFiLlama data showing a $4.25 million seed round backed by Dragonfly Capital and Manifold, and cumulative fees on Blast of $7.05 million. Another earlier exit involved Pacmoon, previously described as Blast's largest meme coin by market cap. An August 2024 report said Pacmoon planned to migrate to Solana and rebrand as ARMY, after a team member, Lamboland, complained about a lack of support for its native token and community. The plan asked holders to burn PAC tokens by an August 14 deadline to qualify for the ARMY airdrop.