What is BLAST that has become popular on the Internet recently?
The BLAST project in Ethereum L2 technology is a compelling innovative platform with the following features:
Unique revenue model: BLAST, as a pioneering Ethereum second layer (L2) platform, provides native revenue from ETH and stablecoins. This revenue method is revolutionary in the L2 field. By leveraging the Shanghai upgrade of Ethereum, it implements an automatic rebase function for ETH and provides Treasury yields for stablecoins through USDB (Blast USD).
Asset preservation: BLAST was developed by Pacman, the founder of Blur, to combat asset depreciation for Blur users. In just 5 days, the platform attracted over $500 million in cryptocurrency investments. However, the projectâs multi-signature Gnosis Safe security mechanism has also attracted some criticism and security concerns.
Higher profits from ETH staking: BLAST attempts to make ETH staking more profitable through the concept of ânative yieldâ. It is a new second layer solution on the Ethereum blockchain. BLAST was developed by Blur contributors to improve the efficiency of ETH staking.
I found a video explaining the mechanism of BLAST mode. It became popular for no reason. It is full of strong Ponzi flavor. If you are interested, you can click on it and watch it:
Why is the whole Internet going crazy to deposit money into BLAST?
The BLAST project, which flaunts Ethereum L2 technology, has attracted a large amount of funding mainly for the following reasons:
Promise of high yields: BLAST attracted yield-seeking investors during its early access phase as it promised yields of up to 5% or more. This is thanks to the additional rewards BLAST offers in the form of its auto-rebasing stablecoin USDB. These USDB rewards are expected to be distributed in May 2024.
Unique Yield Model: BLAST is advertised as âthe only Ethereum L2 to offer native yields for ETH and stablecoins,â meaning it boosts yields by directing all ETH to Lido and using DAI to yield on MakerDAOâs U.S. Treasuries Rate. This unique model of BLAST is innovative in the cryptocurrency market.
Projects led by well-known developers: BLAST is led by Pacman, the founder of the well-known NFT market Blur. It is regarded as a new construction of the second-layer infrastructure, in which income-generating assets are regarded as first-class citizens. This novel way of thinking has attracted the attention and investment of a large number of investors.
Attracting Huge Funds: In just five days, the BLAST mainnet contract attracted $500 million in total value locked (TVL). Many people participate in BLAST to obtain L2 airdrops through its points system, which is one of the reasons why it attracts funds quickly.
The focus here is actually Blur founder Pacman! Let's pour cold water on this. Although the Blast project led by Pacman, the founder of the Blur project, has attracted a certain amount of attention in the market, this attention is not entirely based on the solid foundation of the project itself:
First of all, Pacman previously led the airdrop activity of Blur that killed OpenSea. He shorted Blur tokens worth US$100 million, forming a myth of wealth creation, but may have over exaggerated its actual impact on the Blast project, causing NFT traders to blindly Investing money requires more careful consideration.
Secondly, the sharp increase in the price of Blur tokens, although it may seem beneficial in the short term, may actually hide the risk of bubbles. This reflects the marketâs excessive expectations for Blur and its associated project Blast, rather than based on its long-term value. .
Finally, while Blast has raised funding from prominent investors, investors should be wary that this may just be hype based on Pacman's reputation rather than the sustainability and actual potential of the project itself. Investors should remain alert to these popular projects and rationally assess potential risks, rather than just being attracted by short-term market enthusiasm.
Doing technology for 5 years is not as good as others doing marketing for 5 days?
When analyzing the TVL growth of Ethereum L2 solutions zkSync and BLAST, we discovered an ironic phenomenon. The development trajectories and market responses of these two projects are very different, reflecting some of the current trends and issues in the cryptocurrency market.
The facts are before our eyes:
zkSync, a technology-focused Ethereum L2 solution, has grown its total value locked (TVL) to over $500 million after five years of hard work.
In contrast, BLAST achieved a TVL of more than 230 million US dollars in just 48 hours after its launch. Within 5 days, TVL directly surpassed zkSync to reach 520 million US dollars, and it is still growing.
This comparison reveals two key phenomena in the cryptocurrency market:
First, the BLAST projectâs rapid growth is partly due to its model and market expectations for airdrops, rather than its technology or long-term value. This situation shows that the cryptocurrency market is still highly dependent on hype and short-term trading behavior, rather than substantive technological innovation or the long-term sustainability of the project.
Second, zkSyncâs steady growth demonstrates the disconnect between technology development and market acceptance. Although zkSync has made significant technical progress, its TVL has not grown as rapidly as BLAST. This may indicate that investors and participants in the cryptocurrency market are more inclined to pursue short-term gains rather than long-term technological development and innovation.
This ironic phenomenon embodies some of the current core problems in the crypto market, including an excessive focus on short-term gains and a relative neglect of long-term technological development. This attitude could pose a threat to the health of the market, especially given that cryptocurrency is an emerging technology whose long-term success is highly dependent on technological innovation and sustainable development. Investors and market participants should pay more attention to the fundamentals and long-term prospects of projects rather than just being attracted by short-term hype.
What are the potential risks of BLAST that we need to know about?
Although BLAST has a strong expectation of making money through airdrops, we still need to read more industry comments to understand the possible risks of BLAST:
Security concerns caused by lack of basic functions: After BLAST obtained nearly $500 million in assets locked, its security aroused concern in the encryption community. BLASTâs platform lacks basic features such as a testnet, trading, bridging, rolling upgrades, or the ability to transfer transaction data directly to Ethereum. This lack may pose a threat to the security and operational stability of the platform.
Risks Revealed by Code Review: Critics such as Polygonâs developer relations officer Jarod Watts reviewed BLASTâs code and found that its architecture allowed unlimited withdrawal of all staked funds, raising concerns about mismanagement or abuse of the asset. The lack of standard layer two (L2) features means investors are effectively entrusting the integrity and security of their assets to a small team. The situation highlights broader transparency issues and intensifies calls for regulatory scrutiny of the rapidly expanding DeFi industry.
Risks of multi-signature (Multisig) contracts: BLAST emphasizes the effectiveness of its multi-signature security, a feature also adopted by other L2 solutions such as Arbitrum, Optimism and Polygon. BLAST claims that each signing key in its multi-signature setup is independently secure, and that these keys are stored in cold storage, managed by different entities, and geographically dispersed, aiming to enhance the platform's ability to resist various security threats. However, despite BLASTâs attempts to provide clarity, the crypto community remains skeptical of relying on a multi-signature setup without time locks or full transparency, which compares unfavorably to traditional financial systems.
Therefore, potential risks currently faced by the BLAST project include the security of its platform, potential vulnerabilities in the code, and reliance on multi-signature contracts. These risks may affect investor confidence in the project and pose challenges to its future stability and sustainability. Investors should have a clear understanding of these risks and conduct corresponding risk assessments when considering investing in BLAST projects.
