Wannabe L2 Blast bursts onto scene promising high ETH yield — in 3 months

A brand new Ethereum layer-2 rollup, introduced Monday, has already attracted $27 million in whole worth locked (TVL), however there’s a twist: It doesn’t but exist.

The promised community, Blast, would launch as an optimistic rollup in February 2024, however its backers instantly started soliciting deposits into a wise contract “bridge.”

Within the span of half a day, the contract has amassed sufficient ether (ETH) and dai (DAI) to place it at quantity 16 in L2Beat’s TVL rankings, forward of established names equivalent to derivatives DEX Aevo and Arbitrum Nova.

The announcement touts Blast as “the one Ethereum L2 with native yield for ETH and stablecoins,” which means it faucets into Ethereum staking yield by directing all ETH to Lido and makes use of DAI to faucet MakerDAO’s rising US Treasury invoice yield by means of its Dai Financial savings Charge (DSR), at present at 5%.

Blast’s improvement group, led by pseudonymous Blur co-founder Pacman, raised $20 million from enterprise capital corporations Paradigm and Customary Crypto, joined by a motley crew of angel traders and crypto influencers.

Early response has targeted on the one-way nature of the “bridge” — when you cross you’ll be able to’t exit till after Blast really launches and withdrawals are enabled.

Usually, a bridge permits belongings to stream each methods. This contract is seemingly managed by a five-key multi-signature pockets. Nonetheless, of the 5 addresses, one accommodates no ether and has no transaction historical past, and the opposite 4 have been lately funded by a single tackle.

That calls into query the independence of the signing cohort.

Blockworks has contacted Pacman, Paradigm and Customary Crypto for clarification.

The usage of Lido has drawn the ire of Ethereum neighborhood members involved with centralization danger in staking suppliers, together with Dankrad Feist, who known as it “a really dangerous thought” on X.

“ETH and liquid staking derivatives are totally different belongings with totally different danger profiles (and rewards), and customers ought to have a selection about which one they wish to use,” he stated.

It ought to come as no shock, on condition that Paradigm is an investor in each Lido and Blur.

Critics additionally query using a multi-level-marketing model referral marketing campaign, which doles out factors, of unknown worth, to incentivize sending invites to potential new customers.

The positioning explicitly guarantees an airdrop primarily based on early entry participation. Factors earned are anticipated to be redeemable in Could 2024.

Factors techniques have more and more been used as a progress bootstrapping mechanism by protocol builders — together with Pacman’s prior advertising and marketing of Blur — and are extensively seen as a precursor to an airdrop or one thing else of worth.