Blast has completed a $20 million round of financing co-invested by Paradigm and Standard Crypto. Compared with Arbitrum, which is also in the Layer 2 network, it only received US$3.7 million in its first round of financing in 2019, and Optimism’s first round of financing in 2020 only reached US$3.5 million. Blast has such a high first-round financing. In addition to the participation of the Blur team, it is also inseparable from the support of members from MakerDAO, MIT, Yale University, Seoul National University and other teams and institutions of higher learning. The wealth-making effect of blockchain has made traditional finance ready to take action. Friends who want to participate in Blast private placement please add WeChat at the end of the article.
Among recent cryptocurrency projects, Blast is undoubtedly a shining star. In just three weeks since its launch, its TVL has exceeded US$800 million, creating impressive results. This result can even be described as "amazing" and has attracted widespread attention. So, who is Blast? Why did it gain so much attention and popularity as soon as it went online? Next, let’s take a closer look at this high-profile project.
core competitiveness
Blast Network is a brand-new Ethereum Layer 2 solution that has successfully received US$20 million in financing from institutions such as Paradim. At the same time, the TVL of the entire network has exceeded US$800 million. The founder of the project is Tieshun “Pacman” Roquerre, who is also the co-founder of the well-known NFT project Blur.
Blast Network aims to improve the efficiency of the Ethereum blockchain and solve the current problems of excessive congestion and high costs in Ethereum. In the future, BlastNetwork will pay more attention to improvements in speed, cost-effectiveness, and user-friendliness. Blast encourages users to deposit crypto assets by staking ETH and stablecoins to earn rewards. It is worth mentioning that Blast is currently very active, with only one wallet depositing 10,000 ETH, equivalent to approximately US$21 million.
Blast has attracted much attention in the market and seems to have mastered some cutting-edge technologies, but in fact, Blast is not a complex project. The core principle is to migrate the ETH originally locked in Layer 1 to LIDO to obtain the interest generated by Staking. This interest income will be automatically distributed to ETH holders on Layer 2 Blast. In the same way, the operation process of other stablecoins is the same, and they can all obtain RWA interest. So, in essence, Blast is a Layer 2 network where funds passively earn interest.
Model innovation
Blast adopts a two-layer technical solution similar to OP and ARB, namely Optimistic Rollup. The purpose of choosing the OP series is to achieve rapid implementation and enrich the ecology. However, Blast does not have much innovation at the technical level. Its real highlight lies in model innovation. At the current industry stage, model innovation is a very worthy of attention.
The future of layer 2 or Ethereum’s role in the industry usually requires a cycle of 10 to 20 years, because it takes such a cycle from the concept of technology to its implementation. In this cycle, the degree of innovation of the model has a very important influence on user data and funding effects.
Taking the current situation as an example, we cannot use layer2 directly. Although starknet and zksync provide a certain interactive experience, their use experience is not ideal. In comparison, arb and op perform slightly better and can currently be used for transfers. But we must admit that if it were not for the huge airdrop expectations or the money-making effect before BASE, almost no one would choose to use layer2.
Even during the airdrop, when the airdrop ends, layer2's transaction volume, number of active addresses, and TVL will all experience a cliff-like decline. This is an inevitable trend. However, the emergence of Blast has brought considerable changes to layer2. It provides interest-earning income from staking, which is Blast’s core competitiveness.
When users stake tokens into Blast, they will participate in other staking protocols based on the type of token. For example, if you deposit DAI, Blast will place it in the Maker DAO, and if you deposit ETH, it will be placed in Lido. Finally, Blast’s native stablecoin USDB is used to settle the proceeds and pass them back to users.
The services provided by Blast are similar to the early YFI, which focused on the DeFi aggregation revenue period. Blast has evolved into a layer 2 aggregation revenue generator, providing users with a wider range of stable revenue channels and operational convenience, avoiding complex operations between various DAPPS.
However, stable gains of 3 to 5 points are of little significance to retail investors. Therefore, Blast also specially proposed the "BlastPoint" reward mechanism. Specifically, users will receive an invitation code after depositing funds into Blast, which can be used to invite new users. If a new user deposits assets, the inviter will receive points, and the inviter will also receive additional points after the new user is recommended. Ultimately, based on points and pledged asset levels, users will have the opportunity to receive Blast’s airdrop benefits.
Now comes the most important question, how many airdrop rewards can Blast give? According to Blur’s airdrop rules in the past, two Twitter users received million-level airdrops in February this year based on the median Blur price of 0.75U. In addition, among the 80.15% who received it, 35.8% received rewards ranging from 75U to 750U; 39.6% received rewards ranging from 750U to 7500U, and 7.8% received rewards ranging from 7500U to 75000U. This shows that even with points ranking rewards, 40% of people are able to receive thousands of dollars in rewards, while even simple staking can result in hundreds of dollars in rewards. These are already very large airdrop volumes.
What is the situation with BLAST? On the day the advanced version was launched, the TVL was close to 90 million, and the number of participating addresses had reached 20,000+, with a huge growth rate. According to the circuit diagram:
January 2024: Launch the Blast test network and start airdrop activities for developers (50%)
February 24, 2024: Blast mainnet launched and withdrawals enabled
May 24, 2024: Blast points can be redeemed
According to the time point, May is just around the BTC halving cycle, and it may be supported by the bull market bubble, and the value of airdrops will be greater by then.
Blast
Therefore, we can conclude that Blast has no underlying innovation, and its core mechanism is still based on the superposition of Stake and RWA, allowing the funds originally deposited in Layer 1 to be utilized. However, despite its essence as a points airdrop, Blast's presence is still significant. It abandons the current ambiguous situation of Layer 2 - relying on the "guessing" model to attract a large amount of funds to be active on the chain. This model allows many Layer 2 project parties to easily obtain funds without investing too much effort.
The emergence of Blast undoubtedly taught a good lesson to those Layer 2 players who have been in a state of "laying down and winning" and doing nothing. After Blast’s public airdrop strategy was launched, those Layer 2 projects that relied too much on PUA were soon unable to maintain their original status and had to speed up the pace of currency issuance and airdrops. This change resulted in the liquidity of the Layer 2 market being gradually attracted to Blast, further enhancing its competitiveness in the market.
Liquidity is of extremely high value to Layer 2 projects. As Blast masters more and more liquidity, it gradually becomes a leader in the field, injecting new vitality into the entire Layer 2 field. Every Layer 2 project has been stimulated and influenced by it, constantly adjusting and optimizing its own strategies to cope with the new competitive environment.
It is foreseeable that the emergence of Blast may lead to two results.
1) layer2 issues currency wave. The emergence of Blast will take away most of the liquidity in the market. Other ZK-rollup layer2 players who are already indifferent, what other options do they have besides issuing tokens to stimulate traffic? , even if they are not in a hurry, the VCs who have invested heavily behind them will push hard;
2) layer2 shuffles the cards. The emergence of Blast has torn off the fig leaf of Layer 2. Mission PUA, airdrop bait, to Vitalik style involution, etc. The shortcomings and pain points of Layer 2 have been completely exposed. The entire industry is bound to accelerate the reshuffle and accelerate the survival of the fittest.
In short, Blast may not necessarily bring the compound-like governance token DeFi Summer to layer 2, but it will at least accelerate the layer 2 industry to the eve of Summer.
