BLAST: A Controversial Layer 2 Powerhouse

In the rapidly evolving world of blockchain technology, BLAST has emerged as one of the most talked-about Layer 2 (L2) networks. Known for its meteoric rise and contentious reputation, BLAST has sparked intense debate within the crypto community. While it has quickly become the fastest-growing blockchain of all time, amassing over 200 decentralized apps (dapps) and a staggering $2 billion in Total Value Locked (TVL) within just six months of its launch, it has also faced significant scrutiny. Allegations of a Ponzi scheme-like business model, accusations of code theft, and transparency issues have fueled a storm of controversy. Despite these challenges, BLAST's remarkable growth positions it as the sixth-largest on-chain economy.

Too good to be true yields

In simple words, BLAST is a Layer 2 network that pays you passive income just for using it. Unlike other L2 platforms where your money is just stale in your account, BLAST is designed to enable your assets to automatically generate yield once they are transferred, or bridged to the blast ecosystem.

The yield generation involves two primary components:

1. ETH Staking: Ethereum holders can lock up their ETH to support the network's operation and security. In return, they will receive rewards in the form of additional ETH.

2. On-Chain Treasury Bill (T-Bill) Protocols: When you bridge your stablecoins to BLAST, you will get rewarded with Blast's stablecoin, USDB. The yield from USDB comes from MakerDAO's on-chain T-Bill protocols. The way that the protocol works is similar to that of traditional treasury bills, offering a return over a set period of time. The yield generated is then distributed to the users.

Ponzi Scheme Allegations

One of the major criticisms directed at BLAST is its launch strategy, which some critics liken to a Ponzi scheme. The project’s initial approach promised substantial airdrops and unsustainable rewards in exchange for locking up assets before the network’s full completion.

In response, BLAST’s founder, Pacman, addressed these concerns by assuring that the high yields provided by BLAST are sourced from reputable platforms such as Lido and MakerDAO. He emphasized that these yields are integral to the project’s on-chain and off-chain economic models and are not inherently unsustainable.

Other Controversies

Although BLAST achieved some initial market success, the project also has received many criticisms, revealing issues and challenges with BLAST's actual operations. First, there were issues with the transparency and fairness of the airdrop mechanisms. Many large holders' users complain that despite heavily investing in the project, they did not receive an equal remuneration in terms of airdrop. This distribution method made users question BLAST's fairness and transparency.

Another controversy surrounding the project revolves around its airdrop. As Airdrop typically requires users to connect their wallets and sign transactions, this attracts a lot of scammers to leverage on the project for their illegal activities. Crypto security service Scam Sniffer reported that a user lost over $2,17,000 after signing multiiple phishing signtaure. Such incidents not only harmed user's interest, but it also tarnished the reputation of the project, causing users to question the project's security.

In addition, technical and functional issues also plagued and raised concerns about the project. Despite its claims to offer higher transactional speeds and lower fees for its users, some users found that its functionality did not meet expectations. For example, some users reported that during bridging operations, ETH had to be locked for several months, restricting liquidity.

At the beginning of this year, blockchain researcher Oxkaden also called out BLAST for stealing code and trying to pass it off as their own. On Jan 31, Pop Punk, the Pseudonymous founder of Gaslite also posted a side by side screenshot of the codebase for optimism and Blast, showing how similar both of the codes were.

Market performance amidst controversy

Despite all the controversy surrounding this token, BLAST manages to experience a 40% price surge within a few days of its launch. According to CoinMarketCap, BLAST's price has risen from $0.02 at the time of its release to $0.0281, marking a 40% increase, with a FDV of $2 billion.

BLAST's trading volume also reached a whopping $370 million after its launch, with a market capitalisation surpassing $480 million and an FDV exceeding $2.8 billion. Such market performance has undoubtedly sparked widespread discussion.

The Anomynous "Pacman"

Blast is led by Tieshun Roquerre, who is also known as Pacman. Pacman began his career as a software engineer at Teespring at a tender age of 24 years old. Pacman also founded Blur, the top NFT marketplace protocol on Ethereum with over 333,063 users and $7 billion worth of NFTs traded.

On November 21, 2023, Blast successfully raised $20 million from major investment funds including Paradign and Standard Crypto, eGirl Capital, Primitive Ventures and more.

Navigating challenges and criticisms in the sector

Blast’s ascent in the Web3 space, marked by significant TVL and user adoption, is accompanied by controversies and challenges. So what lies ahead for BLAST? Can it overcome all these challenges and continue to establish itself in the market? Or will it gradually lose its luster amidst user skepticism. Will we witness a more transparent, fair, and secure BLAST network, or will it ultimately disappoint? Only time will provide us with the answer.