Blast: The Pioneer of Layer2 in Creating Profit Narratives

On the evening of June 26, Blast airdropped $Blast tokens to the community, marking the conclusion of this highly anticipated airdrop event. From the perspective of investment institutions, community enthusiasm, and TVL, Blast is undoubtedly a top project this year that can stand shoulder to shoulder with ZKsync. As Layer 2 enters a new phase, how Blast itself and the Layer 2 ecosystem will develop after this large-scale and somewhat controversial airdrop has become a focal point of industry attention.

1. Project Background

Environment-driven Innovation

For a long time, in the traditional Layer 2 ecosystem, users have obtained Layer 2 token rewards by staking ecosystem tokens, stablecoins, and so on. Meanwhile, Layer 2 project teams use these staked funds to complete transaction verification under the POS model and provide token incentives for users to participate in network maintenance and development, achieving a win-win situation. Since Layer 2 is built on top of Layer 1, the staked funds must bear double system risks, so Layer 2 projects usually offer staking interest rates higher than Layer 1 as compensation. So, is there a way for Layer 2 to achieve higher capital returns? Blast was born to create a new revenue model.

Basic Information

Blast is an Ethereum Layer 2 network based on Optimistic Rollups technology, launched by Blur founder PacMan. Unlike other Layer 2 solutions that focus on scaling, speeding up, and reducing gas fees, Blast is dedicated to addressing the shortcomings of Layer 1 while providing higher economic benefits. It is the first Layer 2 to offer fixed income for ETH and stablecoin staking, redirecting the construction of Layer 2 from technical attributes back to the financial essence of Web3.

Development History

• November 2023: Project launch, secured $20 million in seed round financing.
• November 2023: Announce a unique yield model, offering 4% ETH and 5% stablecoin yield
• February 2024: Mainnet officially launched
• May 2024: Airdrop plan postponed to June, and allocation amount increased.
• June 26, 2024: Conduct $Blast token airdrop

market growth

As of the time of writing, Blast Chain has seen rapid growth, with its TVL reaching $1.6B, ranking 6th among all chains, 11th in terms of the number of protocols, and locking assets accounting for 1.71% of the entire network.

2. Token Economics

Token Function

The $Blast token has basic functions such as ecological governance, airdrop incentives, and staking rewards, and its ecological governance system is relatively complete.

Token Distribution

Total supply of 10 billion pieces, distributed as follows:

• Community: 50%, 3 years linear unlocking
• Core contributors: 25.5%, 25% unlocked after one year, 75% subsequently unlocked linearly over three years.
• Investors: 16.5%, 25% unlocks after one year, 75% subsequently unlocks linearly over the next 3 years
• Blast Foundation: 8%, 4-year linear unlock

Phase 1 Airdrop

• Blast Points users share 7%
• Blast Goal points users share 7%
• The Blur Foundation receives 3% for distribution to the Blur community.

The airdrop for wallets in the top 0.1% will be released linearly over 6 months, alleviating selling pressure at the time of token release.

3. Narrative Features

Perfect compatibility with EVM

Blast adopts a freely selectable "Auto-Rebasing" option to achieve perfect compatibility with EVM, reducing project migration costs and accelerating ecosystem construction speed.

A perfect solution for one fish to eat multiple times.

Blast achieves native yields for ETH and stablecoins through the Auto-Rebasing scheme. This scheme automatically stakes locked funds on DeFi platforms such as Lido and MakerDAO, continuously converting them into native token yields, allowing for compound interest operations while avoiding high gas fees. In the future, Blast is expected to independently implement this functionality away from these platforms, providing users with multiple revenue streams.

4. Ecological Construction

The Blast ecosystem covers multiple fields such as SocialFi, GameFi, DeFi, and NFTs, forming a diversified ecosystem.

DEX leader Thruster

Thruster is a yield-focused DEX, with TVL rapidly growing to $438m. It inherits the conventional AMM model and offers both simple and complex UI modes, leveraging automated staking rewards on the Blast chain to enhance liquidity and trading efficiency.

Leveraged Lending Leader Juice Finance

Juice Finance is the largest leveraged lending platform on the Blast chain, with a TVL of $394m. It offers lending and yield farming features, integrating Blast's native rebasing token and gas refund mechanism to optimize user returns.

Capital effect enhances platform Zest

Zest utilizes the native ETH yield of the Blast chain to offer higher returns and lower risk solutions, suitable for use in conjunction with other DeFi projects.

SocialFi leader Fantasy

Fantasy is an innovative project that combines social finance and trading card games, pointing to a new direction for SocialFi to enhance user engagement. As of now, its total NFT trading volume has reached $93.11M, with 36.7K participants.

5. Future Development and Risk Opinions

Future Development Trends

• Blast is expected to become a symbolic project, continually attracting on-chain funds from other chains.
• Blast Chain provides fertile ground for the development of DeFi, expected to spawn more high-yield DeFi projects.

Risk Analysis of Concealment

• Technical Aspect: Auto-Rebasing optimizes capital efficiency but increases system risk.
• Risk Level: Staking through third-party platforms may lead to funds not being recoverable in a timely manner.
• Permission Levels: Automatic staking actions may involve issues related to user fund disposal rights.

Overall, the high returns of Blast come with increased systemic risk, but it remains attractive for individual small investors. Its revenue model may be adopted by other Layer 2 solutions, warranting continued attention.