Blast closes its Ethereum layer-2 after earning $1,793 in a month

"The ongoing costs of maintaining Blast exceed the revenue generated by the L2, and we do not see a credible path to making the chain economically sustainable," the project said in its post on Friday ^[1]. "As a result, we've made the difficult decision to wind Blast down," the team wrote ^[18]. Annualized, last month's revenue comes to about $21,500 a year ^[1]. The post did not put a figure on the costs.

Deposits and revenue fell at different speeds. Deposits are down about 98%, while revenue fell roughly 1,950-fold, from about $3.5 million in a month to $1,793, according to DeFiLlama figures ^[2]. Measured against the money still on the chain, monthly revenue went from about 0.16% of deposits in June 2024 to about 0.0056% now, a 28-fold fall ^[3].

The published counts of the peak differ. CoinDesk, citing DeFiLlama, puts total value locked at about $2.2 billion in June 2024 ^[4]. Decrypt says more than $2.3 billion sat in the bridge by the February 2024 mainnet launch and had slid about 30% by the June airdrop ^[8]. That airdrop set aside $354 million worth of BLAST tokens for users ^[9]. At its best month of revenue, the chain would have needed about 101 months to earn as much ^[4].

CoinDesk reads the closure as part of a consolidation among blockchains ^[10]. A recent wave of exploits has drawn attention to security spending, it reported, and Coinbase and Robinhood are building networks of their own ^[20][10]. Smaller chains are left fighting for developers, users and transaction fees ^[11]. Bankless calls Blast "the poster child of the points-and-airdrop era of L2s" and wrote that "incentives can pull in capital fast, but they can't make it stay" ^[19][12].

Silicon Network complicates the distribution argument. It is linked to South Korean exchange Korbit, and it stopped taking deposits on Sept. 2 with about $9.75 million still on the chain, according to L2Beat ^[13].

I think the Blast record fits the Bankless reading best. Revenue peaked in June 2024, the month of the airdrop ^[3][9], and the reporting does not show Blast users moving to Coinbase's or Robinhood's networks. The squeeze argument still has force. A chain that needs revenue to recover nearly 2,000-fold ^[2] is competing with platforms that already have the users ^[11]. The incentive reading is wrong if a layer-2 with steady fee income and no airdrop history closes and blames security costs.