Blast entry into the crowded layer-2 networks’ space features wild growth as the project’s total value locked (TVL) surpasses $560 million. While the Ethereum layer-2 network is not live, Blast attracts massive crypto deposits.
The growing interest in Ethereum layer-2 networks is evident in cash inflow into the new projects. Blast is living to replicate such accomplishments, particularly with the DeFi Llama data indicating burgeoning above $560 million after its announcement.
Blast Nets Record Figures in Infancy Stage
Blast involves the latest Ethereum scaling network unveiled on Tuesday, November 21. Though its entry into the crowded layer-2 networks mirrors Optimism and Arbitrum developers’ move to execute things efficiently and cheaper on Ethereum, that has proved a slow and costly blockchain.
Blast involves a project steered by Tieshun Roquerre, the cofounder of Blur, that has risen to become the largest NFT marketplace in Ethereum. Blur’s rise to the top is aided by its distinct provisions, among them rewarding the traders for usage and loyalty to the marketplace. Blast aims to replicate the same approach.
Blast idea involves users depositing their crypto, primarily staked Ethereum (ETH) and stablecoins, to derive returns. Days since its unveiling on Tuesday, Blast has witnessed wild uptake, with a single crypto wallet depositing 10000 ETH, translating into $21 million worth of crypto towards the project.
Some market observers have warned against the race to commit crypto towards the project. They indicate that Blast is yet to go live. Blast shrugged off the claims instead, hoping to keep the users’ funds until the project goes live in February.
The community has questioned the sudden rise of the layer-2 network activity, particularly concerned about the model’s safety and whether the investment is secure. Nonetheless, the project shows no signs of slowing, with the total value locked as of press time, which is $566.16 million from over 55,000 users.
Is Blast Model Replicating a Ponzi-like Scheme?
Some traders have alleged that the Blast model portrays Ponzi scheme-like arrangements. They allege that users are receiving Blast points for the May airdrop. The Roquerre-led project promises to offer sizable and risk-free yields estimated at 5% of the stablecoins and 4% of ETH staked by the user.
Pseudonymous NFT developer Phygital echoed the pronouncements of Polygon Labs’ Jarrod Watts, who regretted the need to use three out of five anonymous keys when signing up and executing transactions. Watts dismissed the profile that Blast is a layer two network by indicating that its current incarnation suggests otherwise.
The Polygon Labs executive likened investing funds into the Blast project to trusting three to five strangers to stake one’s crypto. Watts observed in his recent post on X (formerly Twitter) that one cannot withdraw the staked funds unless three signers decide; thus, it sounds risky.
Pacman Supports Blast Huge Rewards
Pacman indicated in a Friday, November 23 post on Elon Musk’s X. The project promises huge rewards since the yield arises from various decentralized finance projects in MakerDAO and Lido.
Pacman observes that the huge yield is the awareness that it is the default for all parties. He added that the project is democratizing higher yields.
Blast has revealed that one of the yield types involves the risk-free interest rate in ETH staking. Such pronouncement has attracted criticism from Lido members, including one by Sacha user who expressed skepticism on X and ruled out that no staking is entirely risk-free.
The spike in total value locked suggests that investors overlook whether Blast offers a risk-free opportunity as they plug huge crypto into the infant project. They are aware that the investment will only budge for a few months, though inspired by the hope of Blast living up to the promises.
Paradigm executive heading research Dan Robinson labeled Blast’s stance portrayed by crypto-centric venture capitalists. Robinson ultimately cautioned Blast on the need to embrace best practices in the sector, which is a bone of contention on the viability of its business model.
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