Blast is winding down its Ethereum layer-2 blockchain after a dramatic loss of activity made the network too costly to operate. The project once held more than $2 billion in crypto assets, but declining usage and stronger competition from networks launched by Coinbase and Robinhood have changed its economics.

The project announced the closure Friday, slightly more than two years after Blast launched. According to the team, the ongoing cost of maintaining the chain has surpassed the revenue it produces, and there is no credible path to making the layer-2 economically sustainable.

The shutdown sent BLAST, Blast’s native token, down 19%. The token has now declined about 98% from its launch price, extending a steep fall since its debut.

Blast attracted substantial capital even before its network went live in 2024. More than $1.1 billion had been deposited by users ahead of the launch, with the prospect of a token airdrop helping drive early interest, CoinDesk reported at the time.

The early momentum faded as speculative capital shifted to other opportunities and activity on the network declined. According to DeFiLlama, Blast’s total value locked climbed above $2 billion in June 2024 but has since dropped to roughly $32 million. Revenue from network activity has followed the same trajectory, falling to just $1,793 last month from a peak of around $3.5 million in June 2024.

Blast’s shutdown is part of a wider shakeout among blockchain networks, particularly as the cost of maintaining infrastructure remains high while user activity becomes more fragmented.

Blockchain operators must continue paying for infrastructure, development and security even when transaction activity weakens. Recent crypto exploits have put additional attention on security costs, while AI-based tools could potentially allow attackers to examine blockchain code for vulnerabilities more efficiently.

The competitive landscape has also shifted as major consumer platforms bring their established audiences into Ethereum’s layer-2 ecosystem.

Coinbase launched Base and has drawn activity from its existing exchange users and developer community. Robinhood launched an Ethereum layer-2 of its own earlier this year and recorded significant onchain activity soon after.

For smaller chains, this means competing for developers, users and transaction fees against platforms with established distribution. Blast’s shutdown demonstrates how quickly a network’s economics can deteriorate when activity and revenue fall below the level required to maintain the chain.

Users can withdraw assets to Ethereum through Blast’s interface until Oct. 26, the team said in a post on X. After that date, withdrawals will require users to interact directly with the network’s bridge contracts.