Blast has quickly attracted over $320 million in deposits, promising high APYs and an upcoming token airdrop. Its unique approach positions it as a notable new player in the Layer 2 field.
Blast, a new Layer 2 project from the founder of Blur — the largest NFT marketplace — is creating a buzz in the crypto space. Within days of its launch announcement, the project had already attracted over $320 million in deposits. With its aggressive marketing strategy, Blast stands a good chance of drawing both liquidity and developer talent away from established Layer 2 (L2 ) networks.
The project plans to launch on the mainnet next year, although currently, the technical details of its L2 implementation are still unclear. However, it has opened a one-way bridge to its smart contract, allowing users to deposit funds. As an incentive, the project offers a 4% APY for ETH and a 5% APY for stablecoins deposits. Additionally, users who bridge their funds will receive an airdrop of the L2’s native token.
Notably, users depositing ETH or stablecoins into this smart contract will not be able to withdraw their funds until Blast’s mainnet launch in February 2024. The project also plans to distribute the airdrop in May of the same year.
Additionally, the project has introduced a “pyramid scheme” where users earn points (convertible to airdrop in the future) for bringing new users into the system. This aspect of the project has attracted significant criticism, with some X (formerly Twitter) users labeling it a “Ponzi scheme.”
Source: blast.io
Nevertheless, Blast’s offer has garnered considerable interest, leading to an exponential increase in deposits to Blast’s smart contract. Users are placing their trust in the reputation of the project’s founder, known for launching Blur, and the project’s prominent backers, including Paradigm and Standard Crypto.
Moreover, the project promises to offer incentives that are currently absent on other L2 networks. These incentives may play a significant role in attracting talent and liquidity to the new network upon its launch.
First, Blast plans to offer a yield to all users with ETH and stablecoins on their L2 network. This yield is automatic, users won't need to engage in any extra staking activities, as bridged ETH and stablecoins will automatically earn yield. To achieve this, they collaborate directly with ETH staking provider Lido and employ MakerDAO’s on-chain T-Bill protocol for high yield on stablecoins.
Second, the project is introducing a significant innovation by planning to distribute 100% of gas fee revenue directly to developers, a departure from the current practice where L2 networks retain this revenue. Developers will have the flexibility to either keep this revenue or use it to offset gas fees for their users. This approach presents a compelling incentive for developers to start building on Blast, potentially drawing a larger user base to the network.
If this is the case then other Layer 2 solutions might also need to begin redistributing these fees to developers. The situation could compel all Layer 2 networks to fundamentally reevaluate and revise their financial models, as they would no longer be able to rely on the substantial fee revenue (tens of millions of dollars annually) they previously enjoyed.
Source: blast.io
Blast will also be EVM compatible, which means that all the infrastructure (code, tools, documentation) familiar to Ethereum developers will work out of the box. This implies that migrating existing dApps to this new chain won't be too difficult.
Overall, Blast appears to be a promising L2 chain with the potential to revolutionize the sector. Its TVL is likely to keep growing as more people engage in the airdrop game. We will continue to Observe and report on its developments.