Blast: Yield-driven Layer 2 Initiation

Blast airdropped tokens to the community on the evening of June 26, marking the end of a large-scale airdrop event. From the perspective of investment institutions, community enthusiasm, and TVL, Blast is the only heavyweight project this year that can be compared to ZKsync. After this massive and somewhat controversial airdrop, the future development of Blast itself and the Layer2 ecosystem is worth paying attention to.

1. Project Background

Environment-driven Innovation

In the traditional Layer 2 ecosystem, users obtain ecological tokens as returns through staking, while project parties use the staked tokens to complete transaction verification under the POS model. Since Layer 2 is built on Layer 1, the staked funds bear dual system risks, and Layer 2 projects usually offer staking rates higher than Layer 1 as compensation. In this context, how can we further enhance the capital returns of Layer 2? Blast was born in response.

Basic Information

Blast is an Ethereum Layer 2 network based on Optimistic Rollups, launched by the founder of a well-known NFT platform. Unlike other Layer 2 solutions that focus on scalability and cost reduction, Blast aims to address the shortcomings of Layer 1 while providing greater economic benefits. It is the first Layer 2 to offer fixed income from staking ETH and stablecoins. This income-oriented positioning may lead the development of Layer 2 to return to the financial attributes of Web3.

Development History

• Project launched in November 2023, received $20 million in seed round financing.
• Announce a unique yield model, providing 4% ETH and 5% stablecoin yield.
• Mainnet launch in February 2024
• The airdrop plan for May has been postponed to June, increasing the allocation.
• Official airdrop on June 26

market growth

Blast has gained market attention, with a TVL of 1.6 billion dollars as of the time of writing, ranking 6th in TVL and 11th among Protocols. Its locked assets account for 1.71% of all on-chain locked assets.

II. Token Economics

Token Functionality

Tokens have basic functions such as ecological governance, airdrop incentives, and staking rewards. In terms of governance, the Blast ecosystem has a relatively complete set of rules and systems.

Token Allocation

Total Supply: 10 billion

• Community 50%, 3 years linear unlocking
• Core contributors 25.5%, 25% unlocked after one year, 75% linear unlocking over three years
• Investors 16.5%, same as above
• Foundation 8%, 4-year linear unlock

Phase One Airdrop

• Blast Points users share 7%
• Blast Goal points users share 7%
• Certain NFT community received 3%

The top 0.1% wallets will have a linear release over 6 months to alleviate selling pressure. The number of Blast Goals is small, resulting in higher benefits.

3. Narrative Characteristics

Perfect compatibility with EVM

Blast adopts a contract-based free choice of "whether to Auto-Rebase", reflecting innovation while ensuring high compatibility.

A solution for multi-eating in one fish

Blast achieves native yields for ETH and stablecoins through Auto-Rebasing. Essentially, it automates the staking of locked tokens in DeFi, converting them into native token yields, allowing for compound interest while avoiding high gas fees. In the future, it is expected to operate independently from third-party platforms.

4. Ecological Construction

The Blast ecosystem encompasses multiple sectors such as SocialFi, GameFi, DeFi, and NFT, possessing strong narrative and integrative characteristics.

DEX leader Thruster

TVL reached $438 million, offering various AMM models and unique features such as lossless lotteries.

Leverage Lending Platform Juice Finance

TVL $394 million, offering lending and yield farming features, with permissionless lending and cross-margin characteristics.

Capital Efficiency Improvement Platform Zest

Utilize Blast's native ETH yield to enhance capital efficiency, providing users with higher returns and lower risk solutions.

SocialFi platform Fantasy

Combining social finance and trading card game elements, the total NFT trading volume is $93.11 million, with 36,700 participants.

V. Future Development and Risks

Development Trends

• Could become a landmark project
• Expected to continue attracting funds from other chains.
• Provide a good foundation for DeFi development

potential risks

• Increased the overall chain capital system risk
• User's fund disposal rights issue
• There are risks behind high returns

Overall, Blast's high-yield model has good prospects, but it also comes with increased risks. Its innovative model is worth continuous attention and may be adopted by other Layer 2 solutions.