Ethereum Layer 2 Blast: Divided Opinions on Its Impact in Crypto World

• A Whopping $225 Million Staked in Blast Despite Skepticism
• Blast: Lukewarm Reception, Strong Backing
• The Team and Supporters
• Staked Assets and Blast Points
• Stake in Staking Protocol Lido and The Criticism
• Points or Pyramid Scheme?
• The Layer-2 Debate
• Crypto Exchanges and Layer-2 Networks
• Anticipation Despite Delayed Launch
• Related Token Prices and Blast's Ecosystem

A Whopping $225 Million Staked in Blast Despite Skepticism

Despite the temporary unavailability of withdrawals until March, Blast has seen a massive inflow of over $225 million since Monday. Staking assets and referring new users can gain Blast points, a reward mechanism that has sparked conversations about its similarity to pyramid schemes. Blast is currently the seventh largest holder of staked ether.

Blast: Lukewarm Reception, Strong Backing

Scheduled to go live in March, Blast is a layer-2 blockchain that has managed to attract more than $225 million in staked ether and stablecoins since its inception, notwithstanding a mixed reaction from crypto investors. Touted as the premier layer-2 network that retains native staking, Blast aims to generate yield via ether staking and real-world assets in due course. Layer 2s are networks erected on top of layer-1 blockchains like Ethereum$2,315 -2.42%, aimed at accelerating and cheapening transactions.

The Team and Supporters

The project is led by @PacmanBlur, an anonymous co-founder of the popular NFT marketplace Blur. The appeal of the network has been partly credited to its backers that include reputable crypto fund Paradigm and eGirl Capital, a consortium of crypto-native investors, to name a few.

Staked Assets and Blast Points

However, staked assets cannot be withdrawn until the Blast bridge becomes operational in February. In the interim, users can earn Blast points, which can be exchanged for an airdrop slated for May. Additional Blast points can be earned by users by recruiting other users via unique referral links. Therefore, as of Thursday, Blast operates on an invite-only basis, necessitating a code from an existing user to gain access.

Stake in Staking Protocol Lido and The Criticism

The bulk of the $225 million that Blast received has been staked on the liquid-staking protocol Lido, making Blast the seventh-largest holder of staked ether, as per Etherscan. However, the very act of restaking on Lido in exchange for dispensing relatively unknown Blast points has drawn flak from the crypto community.

Points or Pyramid Scheme?

There have been comparisons of Blast points to a pyramid scheme, as early users could potentially gain more points based on the number of users they onboard. Technical documents reveal that users receive an additional 16% points when their invited users attract more participants, and another 8% if their referrals bring in further people.

The Layer-2 Debate

There are ongoing debates about the need for more layer-2 networks in the already congested decentralized finance (DeFi) space. There are a total of 232 blockchains as per DeFiLlama, many of which share functionalities and users. Among them, Ethereum holds the biggest share with 55% of the total value locked, followed by Tron with 17%, and BSC with 6%.

Crypto Exchanges and Layer-2 Networks

Crypto exchanges such as Coinbase and Kraken have debuted their own layer-2 networks recently. However, it is noteworthy that Blast's total value of $225 million is fast approaching that of Coinbase's Base, which currently stands at $284 million.

Anticipation Despite Delayed Launch

The delayed launch of the Blast blockchain, which is not expected for another four months, has not dampened the eagerness of investors who continue to invest heavily in the platform, regardless of the ambiguity surrounding Blast points. Andrew Kang, the co-founder of Mechanism Capital, declared that Blast had been his first new L2 investment since Arbitrum.

Related Token Prices and Blast's Ecosystem

Meanwhile, the closely associated Blur token has seen a price surge of 18% in the past 24 hours, pushing its weekly gain to nearly 40%, as some investors view it as a beta bet to Blast. The founder of Blur, @PacmanBlur, stated earlier this week that Blast was an extension of the Blur ecosystem allowing Blur users to earn yields on idle assets while enhancing the technical features necessary to provide sophisticated NFT products to users.

Edited by Jonathan Stoker