- Blast, a new Ethereum Layer 2 network, has quickly attracted over $30 million in investments from prominent backers, despite withdrawal restrictions until February.
- Blast offers unique staking yields and BLAST points, with the majority of funds staked on Lido and MakerDAO.
Rapid Growth of Ethereum’s Latest Layer 2 Network
Blast, the newest addition to Ethereum’s Layer 2 landscape, has made an impressive entrance, securing over $30 million in ether and stablecoins within hours of its launch. This influx signifies the burgeoning demand for Layer 2 networks, which aim to alleviate Ethereum’s challenges related to speed, cost, and scalability.
Once you have access, you can bridge to earn yield (4% for ETH + 5% for stablecoins) and Blast Points ahead of the Mainnet launch in February (2024).
Early access members get more points based on how much they bridge and who they invite.
— Blast (@Blast_L2) November 20, 2023
Understanding the Appeal of Blast
Blast has captivated investor interest with its innovative approach. The network allows depositors to earn yields on transferred ether in addition to BLAST points. Notably, Blast’s design enables native participation in Ethereum staking, with the staking yield benefiting the users and decentralized applications (dApps) on the network. This mechanism allows the value of ether in a user’s wallet to grow over time.
A Closer Look at Funds Allocation
The majority of the bridged funds have been staked on Lido, amounting to over $19 million, with an expected annualized yield of up to 4%. Additionally, around $3 million is allocated to MakerDAO, and a smaller portion of $150,000 in dai stablecoins is held in the wallet. Users bridging stablecoins receive Blast’s auto-rebasing stablecoin, USDB, with its yield derived from MakerDAO’s T-Bill protocol.
Withdrawal Restrictions and Access Limitations
Currently, Blast operates as an invite-only network, with access requiring a code from invited users. The mainnet launch, scheduled for February, will mark the opening of fund withdrawals and on-chain activities. BLAST points redemption is set to begin in May.
Backing from Prominent Investors
Blast has garnered support from leading investors, including Paradigm and Standard Crypto. The project, led by pseudonymous figurehead @PacmanBlur, raised over $20 million in funding. @PacmanBlur also highlighted Blast’s role as an extension of the Blur ecosystem, aiming to provide sophisticated NFT products to users while enabling yields on idle assets.
Market Reaction and Future Prospects
Following the announcement of Blast, BLUR prices witnessed a 12% rise, underscoring the market’s positive response to the new network. Blast’s integration into the broader Ethereum ecosystem and its innovative yield-generating features position it as a potentially significant player in the evolving landscape of Layer 2 solutions.