Blast Deposit Contract on Ethereum Sees Rapid Growth to $390 Million

According to Blockworks, the value sent into the Blast deposit contract on Ethereum has increased significantly to $390 million in just a few days. The smart contract, which serves as a bridge for an optimistic rollup under development, has received approximately $340 million in ether and $50 million in stablecoins since its launch on Monday. The contract is controlled by a Safe 5-key multisig, with three keys required to execute transactions. However, one of the five keys has no transaction history, and the other four show initial ether deposits from the same Ethereum account, making it impossible for an outside observer to determine if the keys were generated by five independent entities or individuals. The project is backed by VC firms Paradigm and Standard Crypto, as well as several influential crypto personalities and traders. Development is led by Blur co-founder Tieshun Roquerre, who goes by the pseudonym "Pacman." Roquerre, a former Thiel Fellow and MIT dropout, has stated that each signer is a unique contributor to Blast and that the project uses the same security model as other L2s, such as Optimism, Polygon, and Arbitrum. However, these networks have additional security components besides a multisig. For example, Arbitrum has a publicly elected security council with 12 members, only two of whom are on the Offchain Labs development team. Deposited ether cannot be withdrawn until February 2024, when the development team must modify the deposit contract, presumably alongside the launch of an actual rollup. Ethereum layer-2 tracker L2BEAT lists the project in its "Upcoming" section, but if it were active today, it would rank between zkSync Era, which launched mainnet in October 2022, and dYdX V3, the StarkEx rollup that has been active since April 2021. Many crypto observers have expressed surprise at Blast's rapid growth in the face of uncertain risks. Some have criticized the project, calling it an "onchain hedge fund" that is "proving regulators' point." A straw poll conducted by Tangent Ventures founder Jason Choi has garnered over 2,500 respondents, with the unscientific opinion poll putting the odds of an exploit of the deposited crypto assets between now and February at 64%.