Blast is a new EVM-compatible optimistic rollup on Ethereum that provides native yield for ETH and stablecoins like USDC, USDT, and DAI. Currently, Blast has a total value locked (TVL) of more than $1 billion. The platform has attracted over $1 billion in stablecoins and ETH from depositors participating in its staking and yield program. The Layer 2 network is set to launch its testnet in January 2024 and mainnet in 2024, and has received a significant amount of resources. So, What Is Blast in Cryptocurrency?
Learn more about “What Is Blast?”
Pacman, the creator of Blur, an NFT marketplace on Ethereum, started the project. VCs like Paradigm and Standard Crypto support it. Blast has gained attention in the crypto community for its staking program and unique yield concept for network users.
Blast, an EVM-equivalent Layer 2 optimistic rollup network, aims to provide higher transaction throughput and lower fees. By combining multiple transactions (up to 10,000) and processing them together, Blast will offer faster transaction speed and reduced fees for each transaction.
Optimistic rollups operate under the assumption that all transactions are valid by default, with withdrawals needing a 7-day challenge period before being included in the main Ethereum blockchain. Blast, being an EVM-equivalent network, enables developers to easily migrate their decentralized applications from EVM networks without any modifications to the original code. Ethereum dApps deployed on Blast will run in their original form without any need for transcription or translation into a different language.
Blast asserts that it is the pioneer Layer 2 network to provide native yield for ETH and stablecoins, in addition to a gas fee subsidy for dApps. These features are said to benefit developers and users. The network’s lower fees are expected to allow traders on Blur, an NFT marketplace created by Blast, to trade NFTs with reduced costs and generate yield from dormant assets. Additionally, Blast is reportedly developing NFT perpetuals.
How Blast Works
AUTO REBASING
Users transact in ETH. Dapps are built around ETH. Blast was designed from the ground up so that ETH itself is natively rebasing on the L2.
L1 STAKING
Blast only became possible this year following Ethereum’s Shanghai upgrade. ETH yield from L1 staking, initially Lido, is automatically transferred to users via rebasing ETH on the L2.
T-BILL YIELD
Users who bridge stablecoins receive USDB, Blast’s auto-rebasing stablecoin. The yield for USDB comes from MakerDAO’s on-chain T-Bill protocol. USDB can be redeemed for DAI when bridging back to Ethereum.
Conclusion
The expected controversy surrounding Blast’s crypto staking program is due to several factors. Firstly, the staking program’s relevance to the platform’s technology and its setup are being questioned. The program goes against the decentralized staking theories by having multi-sig control over staked assets. Additionally, the management of the staked assets is also a concern. Another issue is the value of the airdrop points received by stakers in comparison to the amount they have staked and the associated risk. Despite these concerns, the controversy has brought attention to the project, overshadowing the technology it aims to deliver.
Blast’s developer suggests a potential application for the Blast Layer 2 network on the Blur marketplace, specifically for NFT traders. The main goal is to lower gas fees for traders on Blur using Blast. Additionally, there is an idea to generate yield for assets on the Blur marketplace. L2 networks have already shown their effectiveness in offering faster and more affordable transactions. However, it will be intriguing to observe how the platform enhances financial value for NFT traders and other users with the native yield concept.
It’s crucial to grasp the risks and benefits of the staking program before investing in the platform. While this article focuses on Blast’s technology, readers should be cautious and conduct their own research before engaging with any crypto project.