Inside L2 Blast: A Critical Evaluation
Blast is a protocol that employs optimistic rollups and is compatible with the EVM. The platform, introduced in November 2023, delivers 4-5% passive income per year. Users who deposit ETH receive a dividend of 4%, while those who deposit stablecoins (USDC, USDT) receive a yield of 5%.
As a result, we are discussing an analog of projects such as Optimism, Arbitrum, and other comparable networks. Since these networks capture the outcome of several transactions in the main blockchain, they are necessary for scaling Ethereum. At the same time, consumers earn lesser costs, while transfers are faster than the standard Ethereum chain.
The NFT marketplace’s creator, Blur «Pacman», and a group of former MakerDAO developers announced the Blast project’s launch on November 21, 2023. Within 24 hours of the project’s launch, it had amassed over $130 million in user funds. Blast launched a testnet on January 16, 2024, and the mainnet on February 29, 2024.
Why did the project become so popular so quickly?
- The Blast project’s early investors, which included Paradigm, Standard Crypto, and several other players, contributed a total of over $20 million to the initiative, much of which was used for marketing.
- Second, Tieshun «Pacman» Rockerre, who is renowned for developing the NFT marketplace Blur, is the developer of Blast. Early adopters have received hundreds of millions of USD in NFTs and BLUR tokens from this Rockerre business.
- Thirdly, you had to first enter a referral code from a user who was already working on the project in order to communicate with Blast. After staking Ethereum, this individual gets the associated code.
During the airdrop in the summer of 2024, the user received more money if their referrals contributed more ETH to the protocol. Of the 100 billion tokens that will be released, 17% will go to early adopters.
The L2 network team distributed 50 billion BLAST, or 50% of the 100 billion BLAST tokens, to the community. The distribution of coins will take place progressively over three years, the developers added. The remaining assets will be allocated as follows:
- 25 billion BLAST, or 25.5%, went to the primary donors.
- 16.5%, or 16 billion BLAST – to investors.
- 8%, or 8 billion BLAST – to a fund that will spend assets on the development of the Blast ecosystem.
The platform uses a mechanism called auto-rebasing to automatically modify users’ token balances, reflecting the yields earned. This automation enables simplified asset management, liberating consumers from the need to actively track and claim their revenues.
Protocols like MakerDAO, which allow stablecoins like USDC to be used to generate DAI, which is subsequently transformed into USDB, Blast’s native stablecoin, also make it easier to generate yield on stablecoins. For users, this technique produces continuous yield.
Key features include:
- Auto-rebasing to make asset management easier.
- Automatic returns for stablecoins and Ethereum.
- Applying DeFi techniques to yield stablecoins.
The ecosystem of Blast is made for developers as well as users. Blast fosters an atmosphere that is favorable to the creation and upkeep of DApps on its platform by sharing the money collected from gas fees.
Significant advantages of this redistribution include reduced transaction costs for end users, increased accessibility and appeal of DApps, and a consequent increase in adoption.
With 100 billion tokens in circulation, a sizable portion is devoted to community engagement through airdrops and campaigns. The distribution and use of $BLAST raises concerns about the long-term impact on the Blast ecosystem, including how it will position itself against competitors and address issues regarding decentralization and transparency. The $BLAST token is essential to platform governance, allowing holders to actively participate in protocol decisions.
Views regarding the new network
It was impossible to ignore the tremendous excitement around the debut and the record-breaking collection for a second-layer solution in such a short period of time. Blast was accused of running a Ponzi scam by numerous engineers and cryptocurrency entrepreneurs. Others, on the other hand, believed that this strategy was the best marketing strategy for starting a new network and actively generating money. Many in the industry think that this approach accelerated the development of the L2 solution and encouraged additional users.
According to Total Value Locked (TVL) on websites like CoinGecko, the project was one of the top ten Ethereum Layer 2 networks at the time of publication.