Journalist
Posted:
- Blast garnered massive attention over the last few weeks.
- Criticisms of it being a Ponzi scheme have surfaced.
Blast protocol, over the last few weeks, has taken the crypto world by storm. In a short period of time, Blast has managed to make significant progress across various sectors.
What is Blast?
Blast is a Layer 2 solution where users deposit crypto, like staked Ethereum and stablecoins, to earn returns.
In just four days, the Blast mainnet contract attracted $415 million in Total Value Locked (TVL). Many joined to get the Blast L2 airdrop through their points system.
According to ASXN’s research, they simplify things: 50% of the airdrop goes to developers, and 50% to Early Access Users.
The Early Access User airdrop is split between Blast deposits and Blur stakers.
However, this is a simple view. Staking and deposit amounts change, and they don’t consider how points are distributed, likely following a power law. Their analysis estimates that with $412 million TVL, $50 million of BLAST tokens could be earned.
But the real distribution will depend on how points are given out.
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The Blast mainnet contract has sucked up $415M in TVL in just 4 days, with many participants seeking to earn the Blast L2 airdrop via their points mechanism.
Let’s try to get a ballpark estimate of the return on deposited capital into Blast & from staking Blur: pic.twitter.com/GnzrLRwJt0
— ASXN (@asxn_r) November 24, 2023
If it looks like a duck, swims like a duck, then it probably is…
However, many members in the crypto community have been accusing Blast of being an elaborate Ponzi scheme due to its incentive program and high rewards.
The invite system, where users get points for inviting others, is causing controversy. Some say it looks like a pyramid scheme.
Critics note there’s no clear way for users to exit, which could be a problem for withdrawing funds or joining on-chain activities.
Master-Piece or Master-Ponzi…
Let’s expose the TRUTH about @Blast_L2 :
(🧵👇) pic.twitter.com/6u9iwV2LiD
— Landon Sousa | Avem (@avemfn) November 23, 2023
The CEO of Blast responded to these criticisms, addressing rewards and the invite system in a recent tweet. Though some say Blast seems like a pyramid scheme, the CEO has clarified that the yield comes from Lido and MakerDAO.
Realistic or not, here’s LDO’s market cap in BTC’s terms
Lido gets its yield from ETH staking, a part of Ethereum’s Proof-of-Stake mechanism. MakerDAO’s yield comes from on-chain T-Bills, important to the US economy.
I’ve seen a number of misunderstandings about Blast spreading around. While many of these are humorous memes, it’s important to set the record straight on a few points:
— Pacman | Blur + Blast (@PacmanBlur) November 24, 2023
Only time will tell whether Blast will have a long-lasting impact on the L2 sector. However, the protocol could act as a positive advertisement for the rewards on MakerDAO and Lido.
