Blast Blockchain Development

While Ethereum developers are trying to increase the scalability of the main blockchain, other ecosystem participants are offering their solutions. The most effective were 2nd-layer add-ons that reduce the load on the mother network. The Blast team went even further and offered users a built-in passive income generator. Investors can deposit Ethereum and some stablecoins to receive a profit of 4-5% per annum. In a few months, users have invested over $2.4 billion in it – more than in many well-known projects.

The announcement of the new blockchain project took place in November 2023, when the developers closed a $20 million funding round with the participation of Paradigm, Standart Crypto, eGirl and several other private investors. The team presented Blast as an EVM-compatible 2nd-layer network with the ability to receive passive income from blocking Ethereum and some stablecoins.

At the same time, a bridge was launched for making deposits at 4-5% per annum. The developers warned that profit withdrawal would be available in February 2024 after the launch of the main network. In addition, users were promised points for their activity, which could later be exchanged for the native BLAST token.

In January 2024, the team launched a testnet and simultaneously initiated a competition for developers. The creators of the most promising projects could apply for a special airdrop and integration into the main network at launch. By this time, the chain’s TVL exceeded $2.4 billion, and the number of connected wallets was 180 thousand.

The main network was launched as planned – on February 29, 2024. In one day, users withdrew $1.3 billion from the project. When the first wave of excitement subsided, TVL began to recover.

By mid-March 2024, the total amount of assets locked in the protocol is $1.01 billion. The network unites 56 DeFi projects in various categories – DEX, lending platforms, farming, etc.

The team conducted one of the most successful campaigns to launch L2. The upcoming airdrop of the native token acted as an additional incentive for users (demand) and developers (supply). Blast (BLAST) is a cryptocurrency of the same name, which will be unlocked in May 2024.

Blast is the first L2 protocol with a built-in passive income accrual function. The main objective of the platform is to provide basic income on deposited ETH and stablecoins. Among the features of the project, the following should be noted:

The network uses a native income model. User assets are invested in the Lido and Maker protocols, and profits from bets and US Treasury bonds are distributed among the participants.

Thanks to the reinvestment mechanism, users can receive some products in the ecosystem conditionally free of charge. For example, customers have the right not to pay fees for gas or token exchange.

In the future, the team plans to replace Lido and Maker with their own products. The project aims to create a community of developers. The goals also include scaling by launching their own applications.

During the Bing Bang competition, developers received applications from 3 thousand teams. The best projects entered the ecosystem.

After switching to Proof-of-Stake, Ethereum provides investors with a return of 4-5% per annum. On-chain protocols of tokenized treasury bonds bring holders about 5% over the same period. However, these products cannot be accessed through 2-layer chains. The new project provides such an opportunity, combining the high speed and scalability of L2 with the functionality of the main blockchain.

Blast is an add-on to the Ethereum blockchain designed to speed up transactions, reduce network fees, and provide basic returns for investors. In essence, it is an optimized protocol compatible with the EVM (Ethereum Virtual Machine), which increases the basic returns for users and developers. This result allows for the creation of new business models for dApps that are not available in other 2nd layer chains.

The team is creating a fundamentally new L2 network with expanded functionality. This is the first L2 blockchain that provides direct profit from staking Ethereum and ecosystem stablecoins. The network unites developers of decentralized applications with a built-in mechanism for obtaining returns and cryptocurrency users.

The former create supply, the latter ensure demand. The incentive for both parties is the native cryptocurrency. To participate in the distribution, you need to get special points. They are awarded for activity in the blockchain (transferring coins via a bridge) and social networks. The more points a user collects before the distribution, the higher the chance of receiving a large airdrop.

The protocol is built on the Optimistic Rollup concept, proposed by the Optimism team for creating L2 networks. The technology allows unloading Ethereum by processing transactions in groups (cumulative packages) outside the blockchain. The process looks like this:

Transactions are executed in Ethereum, then grouped together and sent to a smart contract for off-chain processing. Validators confirm the transactions in a batch.

The result is sent to the Ethereum network for verification and inclusion in a block. Since transactions are processed off-chain, there is a risk of malicious actions or sending incorrect information to Ethereum. To eliminate risks, Optimistic Rollup uses a fraud proof technique.

If illegitimate interventions are detected, the smart contract can activate a rollback of the operation and return the system to the state before the suspicious actions were performed.

This ensures the security of transactions, but harms decentralization. Operators in the L2 network receive significant powers and can restrict user actions. In addition, it becomes possible to hide real data. Therefore, the launch of Blast caused a lot of controversy in the community.

To attract customers, the team launched a blockchain bridge with the ability to deposit crypto assets in the Lido and Maker protocols at 4% and 5%. Just a month after the launch, the number of project users exceeded 100 thousand, and the TVL reached $ 1 billion. Thus, the developers implemented a fundamentally new marketing strategy for the first time – to create a minimum viable product (MVP) and actively offer it.

By the time the main network was launched, the volume of locked liquidity in it exceeded $ 2.4 billion. This immediately put the project in a better position to attract developers compared to other L2s.

An additional incentive for participants was the promise of a large-scale distribution of the native Blast coin (BLAST). Given the previous successful experience of the airdrop organized by the founder of the current project and the Blur platform, the excitement is supported by high user expectations.

Many analysts draw a direct parallel between the new L2 network and the leading NFT marketplace. It is clear that Blur needs a 2nd layer blockchain to develop. The reason is that Ethereum is hampered by congestion and high fees to reach its full potential. Many assume that Blast is a contender for the role of the key L2 network on Blur. At the same time, the new chain will be able to use the popularity of the marketplace to develop its own ecosystem.

Token

The project gained popularity even before the launch of the testnet and mainnet. This was facilitated by the support of large investors, the authority of the creator, the possibility of passive income and participation in the airdrop. Blur. In early 2023, this project distributed $450 million in NFTs and its own tokens among early users.

The team launched the native cryptocurrency BLAST in June 2024. The token plays a central role in the ecosystem and acts as a unit of payment in applications. Before that, ETH performed this function.

The protocol generates investment income in 2 ways. These include:

Placing client funds in the Lido liquid staking protocol. Income from deploying bets on L1 is automatically transferred to users by rebasing ETH to L2.

Purchase of tokenized treasury bonds on the Maker platform. Users exchange USDT, USDC, DAI stablecoins for the Blast protocol stablecoin — USDB with an automatic rebasing function. The yield of the derivative token is determined by the Maker protocol. USDB can be exchanged for USDC in a reverse transaction.

The built-in yield generation mechanism in L1 allows Blast to offer users some services conditionally free of charge. For example, the protocol automatically returns fees for gas spent when launching dApps to developers. Application creators can use these funds at their own discretion or subsidize users when paying for operations.

Conclusion

Many analysts draw a direct parallel between the new L2 network and the leading NFT marketplace. It is obvious that Blur needs a 2nd layer blockchain to develop. The reason is that Ethereum is hampered by congestion and high fees to reach its full potential. Many assume that Blast is a contender for the role of the key L2 network on Blur. At the same time, the new chain will be able to use the popularity of the marketplace to develop its own ecosystem.