Blast has airdropped $Blast tokens to the community at 10 pm on June 26, which also announced the end of a huge airdrop feast. There is no doubt that in terms of investment institutions, community enthusiasm and TVL, Blast is the only king-level project that can be compared with ZKsync this year. Layer 2 has entered the next stage. After the large-scale and controversial airdrop event, how will Blast itself and the Layer 2 ecosystem develop in the future?
Background of the project
Environment drives innovation
For a long time, in the conventional Layer 2 ecosystem, users obtain Layer 2 ecological tokens as income by staking ecological tokens, stablecoins and other tokens. At the same time, Layer 2 project parties use the pledged tokens to complete transaction verification and other behaviors in the POS mode, and are also willing to provide tokens to encourage users to participate in the maintenance and development of the network to achieve a win-win situation. Generally speaking, since Layer 2 is built on Layer 1, the funds pledged on Layer 2 need to bear two system risks from Layer 2 and Layer 1, so Layer 2 projects often need to provide a higher interest rate than Layer 1 pledge as risk compensation. Taking the Polygon network as an example, Matic's annual interest rate can generally reach 8%-14%, while the annual interest rate of ETH on the ETH network is generally 4%-7%. So is there a way to make the capital gains obtained by Layer 2 a step higher? So Blast came into being.
Figure 1 Blast-logo
Basic Information
Blast is an Ethereum second-layer network based on Optimistic Rollups launched by PacMan, the founder of Blur. Blur, created by PacMan, once distributed the fifth largest airdrop in history. Compared with other Layer 2 projects that are aimed at expanding transaction capacity, improving transaction speed, and reducing gas fees, Blast focuses on improving the shortcomings of Layer 1 while providing higher economic benefits. Overall, Blast will be the first Layer 2 to provide fixed income for ETH and stablecoin staking, and this narrative based on the perspective of income may guide the construction of Layer 2 to return from technical attributes to the financial attributes of Web3 itself.
development path
In November 2023, the project was launched: Blast was founded by PacMan, the founder of the NFT platform Blur, and began to operate as an Ethereum expansion solution. The project received a $20 million seed round of financing led by Paradigm and Standard Crypto.
In November 2023, a turning point announcement: Blast announced its unique yield model, returning the profits from Ethereum staking and the RWA protocol to users. The project provides 4% ETH returns and 5% stablecoin returns.
February 2024, mainnet launch: Blast officially launches the mainnet, but before that users were unable to withdraw funds locked on the platform, which caused dissatisfaction among some users.
May 2024, Airdrop Plan: The BLAST token airdrop originally scheduled for May was postponed to June 26 for some reason, and the airdrop allocation amount was increased to compensate participants.
June 26, 2024, airdrop: Blast will airdrop on June 26, with 50% of the airdrop rewards allocated to developers (through Blast Gold points) and the other 50% allocated to early users (including users who bridged funds to the network before the mainnet launch.
Market growth
The Blast chain has been highly sought after by the market and it continues to grow. As of the time of writing, its TVL is as high as $1.6 B, making it the 6th chain in TVL and the 11th chain in Protocols. Its locked assets account for 1.71% of all locked assets on the chain.
Figure 2 Blast locked assets ratio
Figure 3 Changes in Blast indicators
Token Economics
Token Function
$Blast tokens will be similar to other Layer 2 tokens in terms of token functions, with basic functions such as ecosystem governance, airdrop incentives, and staking income, and so far they do not have too many outstanding features. However, in terms of ecosystem governance, the Blast ecosystem has more complete governance regulations and rules and regulations than other Layer 2 ecosystems, which may reflect the relative completeness of the Blast ecosystem construction.
Token Allocation
The total supply of Blast tokens is 10 billion, allocated to the community, core contributors, investors, and the foundation.
The community will receive 50% of the airdrop, totaling 50,000,000,000 tokens, which will be unlocked linearly within 3 years from the TGE date.
Core contributors will receive 25.5% of the airdrop, totaling 25,480,226,842 tokens, of which 25% will be unlocked 1 year after TGE, and 75% will be unlocked linearly over the next 3 years.
Investors received 16.5% of the airdrop, totaling 16,519,773,158 tokens, of which 25% will be unlocked 1 year after the TGE, and 75% will be unlocked linearly over the next 3 years.
The Blast Foundation received 8% of the airdrop, totaling 8, 000, 000, 000 tokens, which will be unlocked linearly within 4 years from the TGE date.
Figure 4 Blast airdrop distribution
Phase 1 Airdrop
Users holding Blast Points will share 7% of the total supply of airborne rewards based on the number of points they hold.
Users holding Blast Goal points will share an airdrop reward of 7% of the total supply based on the number of points they have.
The Blur Foundation will receive an airdrop reward of 3% of the total supply to be distributed to the Blur community.
In addition, the airdrops of the top 0.1% of wallets will be released linearly within 6 months, which greatly reduces the huge selling pressure when the tokens are released. At the same time, the number of Blast Goals is far less than that of Blast Points, so the benefits of holding Blast Goals are far higher than Blast Points.
Figure 5 Blast Q1 airdrop allocation
Narrative Features
Perfect compatibility with EVM
The compatibility of EVM is very important for Layer 2 on ETH. The higher the compatibility, the lower the migration cost and the faster the ecosystem construction. Although the perfect compatibility of EVM is not original to Blast, the Blast chain has adopted a free choice approach in compatibility, which reflects a certain degree of innovation.
Blast’s perfect compatibility with EVM relies on the function that contracts can freely choose whether to use Auto-Rebasing. Auto-Rebasing means automatic rebasing. In the contract, you can choose whether to participate in this mechanism. For contracts that do not need to choose this mechanism, DAPP migration can be easily completed with less code modification.
The perfect solution to eat more fish
The slogan of Blast ecosystem is that it is the only Layer 2 that can achieve native returns on ETH and stablecoins. How is this solved?
ETH is not an ERC-20 native token. Generally speaking, in blockchain and DeFi, we deposit ETH into the contract, and the wallet can obtain the corresponding amount of WETH, etc. The converted WETH can obtain income in DEX, lending platforms, liquidity pools, etc. In such a process, high gas fees are often lost, resulting in users with smaller funds being unable to participate in staking activities. At the same time, ETH staking on platforms such as Lido needs to be converted into STETH, etc., and also faces similar loss problems.
At this time, Blast proposed the Auto-Rebasing solution, which aims to automatically update the user's account balance without WETH, STETH or any other ERC 20 tokens. At the same time, the ETH staked in Blast is currently automatically staked with Lido, directly updating the native ETH balance, allowing users to automatically obtain returns without any operation. In addition, the native stablecoin USDB provided by Blast can be exchanged for DAI when bridged back to Ethereum through MakerDAO's T-Bill protocol.
This plan seems very complicated. In essence, it is to automatically stake the tokens originally locked in the contract in DeFi such as Lido and MakerDAO, and continuously convert them into native token income, realizing compound interest while avoiding high gas fees. At the same time, the Blast R&D team has shown that it will be able to achieve this operation without Lido and MakerDAO in the future. Therefore, the funds staked in Blast may not only obtain the staking rewards of the Blast chain itself, but also have a base interest rate similar to that of the ETH chain, achieving a perfect one-fish-two-kill.
Figure 6 Blast vs. other L2
Ecological Construction
Blast's ecological construction covers multiple tracks such as SocialFi, GameFi, DeFi, NFT, etc. Compared with the traditional Layer 2, the Blast ecosystem has better narrative and comprehensiveness, integrating multiple functions and features to form a diversified ecosystem.
DEX Leader Thruster
Thruster is a yield-first DEX built for degens, supported by Blast Points chads, founders and an excellent community. Its TVL has grown rapidly since March and is currently as high as $438m. In the Blast airdrop event, users can obtain Blast Points and Thruster Credits points by cross-chain and providing liquidity, and enjoy multiple benefits
Figure 7 Thruster TVL Growth
Thruster inherits the AMM model of conventional DeFi, allowing users to provide liquidity and earn fees.
Thruster provides web UI in simple and complex modes, which brings convenience to users.
Thruster utilizes the USDB and ETH staking income automated by the Blast chain, thereby improving the liquidity and trading efficiency of the DEX itself and providing support for the launch of new tokens.
Thruster has uniquely designed a weekly lossless lottery, Thruster Treasure pool rewards, which has attracted a large number of active users to participate.
图 8 Thruster—logo
In addition, Thruster also provides versions of different AMM models. For example, Thruster V3 uses centralized liquidity AMM with different transaction fee structures, which is suitable for high-frequency traders.
Juice Finance, the leader in leveraged lending
Juice Finance is currently the largest leveraged lending platform on the Blast chain. It uses an innovative cross-margin Defi protocol, mainly providing lending and yield farming functions, and optimizing users' earnings and point acquisition by integrating Blast's native rebase tokens (such as ETH, WETH and USDB) and gas refund mechanisms. Its current TVL is as high as $394m.
Figure 9 Juice Finance TVL Growth
Leveraged Lending: Users can lock WETH as collateral in the protocol and borrow up to 3 times the USDB. USDB can be deployed in other yield strategies on the Blast chain to maximize returns.
Yield Farm: Similar to other yield farms, Juice Finance provides users with a variety of strategy vaults. Users deposit USDB to earn returns. It is worth mentioning that Thruster is also included in the strategy vault service provided.
Figure 10 Juice Finance
Compared with other lending platforms, Juice Finance also has permissionless lending and cross-margin functions, providing a basis for users to fully utilize their financial advantages to make capital gains.
Capital effect enhancement platform Zest
Figure 11 Zest platform
On conventional mortgage platforms, the general mortgage rate reaches 150%, which cannot fully exert the utility of tokens. Zest will use the native ETH income of the Blast chain to
Improve capital efficiency. When a user stakes $150 worth of ETH in Zest, he or she can get $100 worth of zUSD and $50 of Leveraged ETH. The yield of ETH is inherited by zUSD, and the volatility is inherited by Leveraged ETH. Because all fluctuations of ETH are absorbed by Leveraged ETH, zUSD has risk-free leveraged returns, which improves capital efficiency.
Therefore, compared with other platforms, Zest provides an auxiliary solution with higher returns and lower risks, which is suitable for working with other DeFi to achieve higher returns.
Figure 12 Zest profit chart
SocialFi Faucet
Fantasy is a revolutionary social finance trading card game that combines elements of social finance and trading card games to provide users with a new interaction and revenue model.
Figure 13 Fantasy Market
The Fantasy project was originally launched by Travis Bickle on the Blast mainnet on May 1 and became one of the 47 winning works in the BIG BANG competition. Compared with traditional SocialFi projects, Fantasy defines a new way to link social media influence with platform currency and collections, and points out a new direction for SocialFi to improve user stickiness.
Essential features: The Fantasy platform provides cards with well-known traders, investors, industry analysts and project initiators from the Crypto Twitter community as avatars, and uses cards as a medium for profit distribution, which distinguishes it from traditional SocialFi.
Income features: Players holding cards can passively earn 1.5% of their card transaction volume in ETH while earning 4% native income from the Blast chain itself.
Nature of the competition: Players purchase cards to form decks, and are ranked and rewarded based on market trading activity and social media influence in weekly competitions.
As of the time of writing, the total NFT transaction volume on the Fantasy platform has reached $93.11 M, with 36.7K participants, making it the 5th SocialFi in the Blast chain overall ranking.
Figure 14 Fantasy data
Although Fantasy has done a good job of connecting users to the platform through card decks, it is still a big challenge to retain users and even attract more users to participate after the rewards. So far, the actual user base of Web3 cannot be compared with the user base of traditional media platforms, and users are much more profit-seeking than traditional platforms, so this problem is also a dilemma that all SocialFi platforms must face.
Future development and risk opinion
Figure 15 Blast promotional image
Future trends
Compared to all previous Layer 2, Blast is the first to narrate the economic benefits of Layer 2. In essence, it is similar to the first Layer 2 solution that attempts to solve the expansion of Layer 1 - both have pioneered a new research idea and path. Therefore, it is undeniable that Blast is very likely to become a symbolic project like Uniswap. The future development of Blast may be related to the following points.
Due to the high-yield characteristics of Blast, in the long run it will inevitably draw funds continuously from other Layer 2 chains and the Ethereum chain itself until the profit characteristics of the Blast chain are balanced with those of other chains.
The automatic income capability of the Blast chain provides fertile ground for the development of DeFi. DeFi projects built on Blast naturally have higher and more stable income than DeFi projects on other chains, and will also develop faster.
Hidden risk analysis
Blast Chain relies on the powerful Auto-Rebasing function to automatically obtain Layer 1 staking income and avoid monetary losses caused by inflation. This is essentially an automated way of killing two birds with one stone, obtaining both Layer 1 and Layer 2 income on Layer 2 at the same time.
From a technical perspective, Blast achieves automated staking through Auto-Rebasing and reduces the gas fees for staking, while reducing the personal risks of single user operations and optimizing overall capital efficiency.
From the perspective of risk level, obtaining income through staking through Lido and MakerDAO will undoubtedly greatly increase the systemic risk of the entire chain funds. At the same time, it is still unknown whether it will cause losses due to the inability to recover funds in time due to market fluctuations.
From the perspective of authority, Blast’s automatic pledge of funds to Lido and MakerDAO means that users automatically bear the corresponding risks. It is worth considering whether this infringes on users’ rights to dispose of funds.
In general, Blast's high returns are not free, and they are accompanied by an increase in the overall risk of the fund system. However, for individuals with small funds, the increase in returns is obviously much greater than the increase in risk, and it still has a very good prospect. At the same time, the return characteristics of Blast are likely to be adopted by other Layer 2s, and it is also worth continuing to pay attention to.
