Blast layer-2 network shuts down with $51 million in user funds at stake

Blast, the Ethereum layer-2 network that once held $2.24 billion in deposits, is shutting down after its daily chain revenue collapsed to $110. The closure leaves roughly $51 million in user funds routed through contracts controlled by just five wallet keyholders, raising questions about how smoothly the final withdrawals will go.

• Blast’s token fell 19% after the team announced the shutdown on Friday, October 2, 2026
• Value locked on the network has dropped to $32.3 million, down nearly 99% from its 2024 peak
• Users have until Monday, October 26, 2026 to withdraw through Blast’s standard app before contracts shift control

• $2.24B Blast’s peak network value locked, reached in June 2024
• $110 chain revenue earned in the 24 hours before shutdown
• 19% BLAST token decline following the shutdown announcement
• $51M bridged ETH still sitting in Blast’s contracts today

Blast, an Ethereum layer-2 network built by Blur founder Tieshun Roquerre, said in a post on X on Friday (October 2, 2026) that it is shutting down, according to BeInCrypto. The team said operating costs now exceed the revenue the chain generates, with no credible fix in sight.

Chain revenue fell from billions in deposits to $110 a day

Blast launched in 2024 promising interest on deposits and a future token reward, pulling in $2.24 billion in deposits. Two years later it earns $110 a day.

BeInCrypto reported the project showed early strain when it posted negative revenue in March 2026, months ahead of Friday’s announcement. Blast had raised $20 million from investors before launch. Value locked on the network has since fallen to $32.3 million, a drop of nearly 99% from its 2024 peak, according to DefiLlama.

The BLAST token fell 19% on the shutdown news. Holders who had bridged funds in anticipation of interest payments and token rewards were left absorbing the loss.

Founder Tieshun Roquerre says Blast’s “run was shorter than we had hoped”

Blast was founded by Tieshun Roquerre, known online as Pacman, who also built Blur, the digital collectibles marketplace. He posted his own farewell to the project on X.

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.

Tieshun Roquerre, Blast founder, posted on X

Blast joins a string of 2026 network closures, including Lisk’s blockchain shutdown and the Bitcoin layer-2 project Botanix. Its deposits arrived in weeks; the revenue to sustain them never materialized at scale.

Five keyholders control the last $51 million before the October 26 deadline

About $51 million bridged from Ethereum still sits in Blast’s contracts, according to L2BEAT, a site that rates layer-2 network safety. Most of that, $46.6 million, is staked ETH held with Lido, an interest-bearing staking service, which is why withdrawals are expected to freeze first while Blast unwinds that position.

Blast must pull its funds out of Lido, a process that takes about a week. After that, the standard withdrawal wait drops from seven days to 24 hours.

Users have until Monday, October 26, 2026 to withdraw through Blast’s normal app. After that date, they must interact with Blast’s Ethereum contracts directly. L2BEAT’s data shows five keyholders control those contracts, and any three can alter them instantly or pause withdrawals. Blast’s fraud-proof system, intended to let anyone challenge a false record, never fully worked, according to a note on the L2BEAT page: “A malicious proposer can finalize an invalid state, which can cause loss of funds.” L2BEAT flags this as a design risk and does not allege any actual misuse.

The BlockWest read. Blast’s unwind is a stress test for how layer-2 “exit windows” actually work once incentive-driven liquidity leaves. Allocators treating bridged ETH as cash-equivalent should price in multisig custody risk, not just smart-contract risk, before parking funds on any L2 chasing yield or token rewards. Any three of the five keyholders can alter contracts instantly or pause withdrawals, not the Lido unstaking delay, is the real bottleneck here.

Blast’s standard withdrawal app remains open until Monday, October 26, 2026, after which users holding a share of the remaining $51 million must interact with the network’s Ethereum contracts directly, under the control of five keyholders who can alter them with three signatures.

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