Blast Yield-Generating L2 + Airdrop

Everything That You Need to Know

The Launchy Team
November 28, 2023

📢 Sponsor | 💡 Telegram | 📰 Past Editions

Blast Yield-Generating L2
Everything That You Need to Know

Blast is a “yield-generating” L2 that rehypothecates bridged assets.
Blast was built by Tieshun Roquerre, the founder of the NFT marketplace Blur, also known as “Pacman.”
The bridged assets are secured by a 3/5 multisig of anonymous individuals.
The referral marketing strategies that resemble MLM have gained Blast a lot of criticism.
BLUR stakers and users that have deposited stables and ETH on Blast will be eligible for the upcoming airdrop in 2024.

Ethereum L2 Blast goes live in early access mode following a $20M investment from Paradigm and others.

Blast was built by Tieshun Roquerre, the founder of the NFT marketplace Blur, also known as “Pacman.”
Flashbots strategy leads Hasu, Delegate CEO Foobar, and the members of the investment group “eGirl Capital” also participated in the round.
Blast is designed to support Blur with L2 solutions, creating a symbiotic relationship between both platforms.

Blast Timeline
Early Access (now) - bridge to earn yield + Blast Points
Mainnet (Feb 24) - dapps go live, withdrawals enabled
Redemption (May 24) - Blast Points can be redeemed
— Blast (@Blast_L2)
11:39 PM • Nov 20, 2023

Blast stakes ETH natively, passing the yield to its L2 users and dApps, allowing their balances to grow automatically over time.

Blast claims to be the only Ethereum L2 with native yield for ETH and stablecoins.
Blast provides yields on stablecoins like USDC, USDT, and DAI, deposited in protocols like MakerDAO, with returns in USDB, Blast's auto-rebasing stablecoin.
Blast offers users automatic compounding with a 4% yield on ether and 5% on stablecoins, plus rewards called "Blast Points."

Criticism on Blast

Prominent figures and organizations in the crypto space are questioning whether Blast qualifies as an L2:

Arbitrum's Offchain Labs' co-founder, Steven Goldfeder, stated that Blast abuses the term L2 for marketing/growth by "marketing single-node chains as Ethereum L2s."

This is funny but also such a sad reflection on the state of many abusing the term L2 for marketing/growth.
By staying silent as our friends and some of our most trusted brands marketed single-node chains as Ethereum L2s, we've created a trend that has now grown much larger.… twitter.com/i/web/status/1…
— Steven Goldfeder (💙,🧡,🖊️,🦀) (@sgoldfed)
3:15 PM • Nov 22, 2023

Some analysts and developers argued that it should be described as a sidechain solution protected by a multi-sig contract.
Dune dashboards on Blast created by 21shares put a disclaimer that “Blast is not an L2 yet but they have started allowing users to deposit via a multi-sig contract”

Moreover, Blast also receives criticism from the crypto community pointing out its “clever” marketing strategy and legal risks:

Members earn rewards for inviting others and a smaller portion from the invitees of their referrals, @Tytaninc compares this to a pyramid scheme.
Gabriel Shapiro suggests the arrangement could be legally dubious, particularly as it's managed by a 'multisig' system, likening it to a crypto hedge fund with potential regulatory and legal risks.

legally speaking, this is beyond crazy, particularly when only managed by a multisig
you are simply investing in a crypto hedge fund
— _gabrielShapir0 (@lex_node)
11:13 AM • Nov 21, 2023

@wassielawyer describes Blast's offer as a 3-month loan with LIDO/MKR yields and potential future tokens, extendable at will by the borrower (i.e., Blast), plus a promotion fee in future tokens.

Demystifying the Criticism & Understanding the Multi-Sig System and Its Risks

@jarrodWattsDev demystify the risk plus criticism of Blast’s multi-sig system and find the answer to whether Blast is qualified to be categorized as an L2:

On Blast’s multi-sig system:

Blast uses OpenZeppelin's UUPSUpgradeable contract for its proxy, enabling updates to the implementation contract while keeping the same address.
A major concern on the upgradeability is that the multi-signature owners could alter the contract for malicious purposes.
However, such upgradeable contracts are standard in most L2s like Optimistic Rollups (Optimism, Arbitrum) and zkEVMs (Linea, Scroll, zkSync), allowing changes sometimes without notice or with short delays.
Publicly known security council members, like in Polygon's PIP-29 proposal, add transparency to this process.
The Safe contract controlling the Blast contracts is configured with 5 signers, requiring a majority (3/5) to execute transactions. All five signers are new wallets with unidentified owners.

On Blast claim that it is an L2:

@jarrodWattsDev argued that Blast is not an L2 as Blast smart contract accept funds from users and stakes users’ fund into protocols like LIDO.
He argued that because there's no testnet, no transactions, no bridge, no rollup, and no sending of transaction data to Ethereum, therefore, it’s not an L2.

Airdrop

According to 0xRamen’s Dune Dashboard, Blast has amassed more than $570M in TVL.

Blast is planning token airdrops for developers in January 2024 with its testnet launch and for community members in May 2024,

Blast will allocate half of the tokens to each group (developer and early access community) based on their points.
Early access community members get more points based on how much they bridge and who they invite.
The airdrop in May 2024 can also be earned by "staking" BLUR which depends on BLUR staked and the staking duration.

Here’s a thread from 0xRamen that guestimates the value of Blast airdrop

4/ if we assume FDV of BLAST is $1b, 5% airdrop to bridgers
then $1b FDV * 5% = $50m airdropped
$50m airdropped / $240m TVL = 21% in rewards by May'24 when the token drops
annualized, that's 42% in APY on top of base yields of stETH and sDAI
— 0xRamen (@0xRamenUmai)
4:53 AM • Nov 23, 2023

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time but it would mean the world to us 🙇

Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.