Blast Airdrop: A Ponzi Scheme or a Legit Opportunity?
Blast is an Ethereum L2 network with a native yield system for ETH and stablecoins. It uses Optimistic Rollup technology and is compatible with the Ethereum Virtual Machine (EVM).
At the time of writing, the Blast protocol has secured over $500 million in locked-in funds (according to DefiLlama), an impressive feat given the project's recent launch and its current pre-mainnet status.
Despite this initial success, Blast has been subject to considerable criticism, the grounds of which we explore in our article.
The project attracted $20 million from venture funds such as Paradigm and Standard Crypto, among other investors.
The team behind Blast boasts experience from prestigious institutions including MakerDAO, the Massachusetts Institute of Technology, Yale University, and Seoul National University.
Despite this initial success, Blast has been subject to considerable criticism, the grounds of which we explore in our article.
Founders and Investors
Blast, introduced on November 21, 2023, was developed by Tieshun Roquerre, the founder of the NFT marketplace Blur, who is also known on social network X as Pacman.The project attracted $20 million from venture funds such as Paradigm and Standard Crypto, among other investors.
The team behind Blast boasts experience from prestigious institutions including MakerDAO, the Massachusetts Institute of Technology, Yale University, and Seoul National University.
Yield System
Blast's website states that its native yield for users is provided through ETH staking and RWA protocols. Returns from decentralized protocols are automatically allocated to Blast users.The interest rate for ETH is set at 4%, while for stablecoins it is 5% (likely an annual percentage rate).
Initially, ETH profits are secured through liquid staking in the decentralized Lido protocol.
For stablecoin users, Blast offers USDB (Blast's stablecoin). The yield for USDB is derived from the T-Bill protocol in the MakerDAO network. Users can exchange USDB for USDC during bridge transfers to Ethereum.
How Blast Works Source: blast.io
Blast Airdrop
Blast launched with an announcement that users could receive an airdrop by participating in its early access program and earning points, a system reminiscent of the one used in the Blur project.Unlike Blur, however, Blast's program is accessible only through an invitation system. Users with access can generate invitations for others, earning points based on the amount of ETH or stablecoins their invitees lock into the Blast protocol.
Additionally, points can be accrued by staking BLUR tokens on the project's site and engaging with a fortune wheel feature.
Blast Leaderboard at the time of writing Source: blast.io
Criticism and Skepticism
Blast has attracted criticism for its incentive system, which some liken to a Ponzi scheme. Points accrue not only based on the number of one's referrals and the sum of their locked funds but also from the referrals of those referrals, resembling a pyramid structure.
Comment from Paradigm
Dan Robinson, the Head of Research at Paradigm, weighed in on the strategy surrounding Blast. He expressed reservations about the project's marketing campaign.For example, we don’t agree with the decision to launch the bridge before the L2, or not to allow withdrawals for three months, since we think it sets a bad precedent for other projects. We also think much of the marketing cheapens the work of a serious team,,” Robinson stated in a post on X.
Conclusions
Blast is unlikely to be a scam project, considering its founder has a strong reputation and a history of successful projects. However, the issues highlighted in the article are valid concerns.
It's noteworthy that Blast was launched with support from the investment firm Paradigm, a respected name in the cryptocurrency sphere. However, even Paradigm has had its share of errors, as seen in the case of Sam Bankman-Fried and the FTX exchange debacle.
Dmytro Psevdonimenko
Author
Has been exploring the enigmas of the crypto industry since 2017, transforming them into accessible narratives. Relies on dark chocolate and nuts as a secret source of energy and inspiration.
