Blast Deposits Top $1.1 Billion Ahead of Ethereum L2 Launch and Airdrop

Blast, an upcoming Ethereum layer-2 scaling network from the creator of leading NFT marketplace Blur, has now pulled in more than a billion dollars’ worth of deposits from users vying to earn yield and points towards an upcoming token airdrop.

Some $1.13 billion worth of cryptocurrency has been deposited into the Blast bridge as of this writing, according to both the official website and DeFiLlama, making it the 23rd largest protocol by total value locked according to the latter resource. Over 86,000 users have contributed funds thus far.

According to Blast, users are earning about a 4% annual return on deposited Ethereum (ETH) and 5% on stablecoins. Furthermore, they’re earning “Blast Points,” which will play into their respective share of the upcoming BLAST token airdrop.

According to the Blast website, the airdrop is set for May 2024.

Blast aims to make an impact in the crowded Ethereum scaling market—which includes networks like Polygon, Arbitrum, Optimism, and Base—by incentivizing users with both native yield on staked cryptocurrency along with a share of tokens via airdrops. Crypto protocols use airdrops to give out tokens to early users and contributors, typically aiding in decentralized governance as well.

Pulling in users with the allure of token rewards is the same strategy that worked wonders for Blur, which dethroned one-time leader OpenSea to become the leading NFT marketplace in February. Blur has airdropped more than $800 million worth of BLUR tokens to NFT traders in 2023 across two waves, based on the peak value of the token, per data from CoinGecko.

Both Blast and Blur were founded by Tieshun “Pacman” Roquerre, and both were backed by prominent crypto venture capital firm Paradigm. However, Blast’s rollout has been controversial—even for its backers.

Users are depositing cryptocurrency into a bridge that does not currently connect to the actual Blast network that’s in development, and funds cannot be withdrawn until February 2024. The overt emphasis on earning yield and rewards before the network is even live has apparently rubbed some crypto users the wrong way.

In late November, just days after Blast was revealed to the world, Paradigm Head of Research and General Partner Dan Robinson wrote that the firm believed that the “announcement crossed lines in both messaging and execution.”

“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,” he continued. “We also think much of the marketing cheapens the work of a serious team.”

Blast and Pacman did not respond to the comments. However, in advance of Robinson’s tweet, Pacman wrote that Paradigm had not been involved in Blast’s go-to-market rollout, and that the VC firm—which co-led Blast’s $20 million raise—had already asked the Blast team to make some changes.

He added that Paradigm’s suggestions were “under active consideration,” but that it would ultimately be Blast’s call.

In December, Robinson tweeted that Paradigm had worked with Blast to develop a “new time-locked upgrade system,” which he said would “set a better precedent for future projects who may try to emulate them.”

Edited by Ryan Ozawa.