Trustless Labs
Blast airdropped $Blast tokens to the community on the evening of June 26th, marking the end of a massive airdrop event. Undoubtedly, in terms of investment institutions, community enthusiasm, and TVL, Blast is the only project this year that can be compared to ZKsync. Layer2 has entered the next stage, and after the large-scale and controversial airdrop, what lies ahead for Blast itself and the future development of the Layer2 ecosystem?
I. Project Background
Environment-Driven Innovation
In the conventional Layer 2 ecosystem, users obtain Layer2 ecosystem tokens as rewards by staking ecosystem tokens, stablecoins, and other tokens. At the same time, Layer2 projects are willing to provide token incentives for users to participate in network maintenance and development through token staking and transaction verification in the POS model. Generally speaking, because Layer2 is built on Layer1, funds staked on Layer2 bear the risks of both Layer2 and Layer1 systems. Therefore, Layer2 projects often need to provide interest rates higher than Layer1 staking as risk compensation. For example, on the Polygon network, the annual interest rate for Matic is generally between 8% and 14%, while on the ETH network, the annual interest rate for ETH is generally between 4% and 7%. Is there a way to further increase the capital gains obtained by Layer2? This is where Blast comes in.
Figure 1 Blast-logo
Basic Information
Blast is an Ethereum Layer2 network based on Optimistic Rollups, launched by PacMan, the founder of Blur. Blur, created by PacMan, has distributed the fifth-largest airdrop in history. Unlike other Layer2 projects that focus on increasing transaction capacity, improving transaction speed, and reducing gas fees, Blast focuses on improving the shortcomings of Layer1 while providing higher economic benefits. Overall, Blast will be the first Layer2 to offer fixed income for staking ETH and stablecoins. This narrative based on income perspective may guide the development of Layer2 from technical attributes back to the financial attributes of Web3.
Development History
November 2023, Project Launch: Blast was founded by PacMan, the founder of the NFT platform Blur, as an Ethereum scaling solution. The project received a $20 million seed round of financing led by Paradigm and Standard Crypto.
November 2023, Pivotal Announcement: Blast announced its unique income model, which returns the income from Ethereum staking and the RWA protocol to users. The project offers 4% ETH income and 5% stablecoin income.
February 2024, Mainnet Launch: Blast officially launched its mainnet, but users were unable to withdraw funds locked on the platform, leading to dissatisfaction among some users.
May 2024, Airdrop Plan: The BLAST token airdrop, originally scheduled for May, was postponed to June 26th due to unforeseen circumstances, and the airdrop allocation was increased to compensate participants.
June 26, 2024, Airdrop Announcement: Blast will conduct the airdrop on June 26th. 50% of the airdrop rewards will be allocated to developers (through Blast Gold points), and the remaining 50% will be allocated to early users (including users who bridged their funds to the network before the mainnet launch).
Market Growth
Blast Chain has been highly sought after in the market and has continued to grow. As of the time of writing, its TVL has reached $1.6 billion, making it the 6th-ranked chain in terms of TVL and the 11th-ranked chain in terms of Protocols. Its locked assets account for 1.71% of all locked assets on the chain.
Figure 2 Blast lockup asset ratio
Figure 3 Blast key performance indicators
II. Token Economics
Token Functionality
The $Blast token has similar functionalities to other Layer2 tokens, including ecosystem governance, airdrop incentives, and staking rewards. So far, there are no particularly prominent features. However, in terms of ecosystem governance, the Blast ecosystem has more comprehensive governance rules and regulations compared to other Layer2 ecosystems, which may reflect the relative completeness of the Blast ecosystem construction.
Token Distribution
The total supply of Blast tokens is 10 billion, distributed to the community, core contributors, investors, and the foundation.
The community receives 50% of the airdrop, totaling 50,000,000,000 tokens, linearly unlocked within 3 years from the TGE date.
Core contributors receive 25.5% of the airdrop, totaling 25,480,226,842 tokens. 25% is unlocked 1 year after the TGE date, and the remaining 75% is linearly unlocked in the following 3 years.
Investors receive 16.5% of the airdrop, totaling 16,519,773,158 tokens. 25% is unlocked 1 year after the TGE date, and the remaining 75% is linearly unlocked in the following 3 years.
The Blast Foundation receives 8% of the airdrop, totaling 8,000,000,000 tokens, linearly unlocked within 4 years from the TGE date.
Figure 4 Blast airdrop allocation
Phase One Airdrop
Users holding Blast Points will share 7% of the total supply as airdrop rewards based on the number of points they hold.
Users holding Blast Goal will share 7% of the total supply as airdrop rewards based on the number of points they hold.
The Blur Foundation will receive 3% of the total supply as airdrop rewards to be distributed to the Blur community.
In addition, airdrops for the top 0.1% of wallets will be linearly released within 6 months, effectively reducing the token dump during the release. Meanwhile, the number of Blast Goals is much smaller than Blast Points, so holding Blast Goal provides higher benefits than holding Blast Points.
Figure 5 Blast Q1 airdrop distribution
III. Narrative Features
Perfect Compatibility with EVM
High compatibility with the EVM is crucial for Layer2 on ETH. The higher the compatibility, the lower the migration cost and the faster the ecosystem construction. Although perfect compatibility with the EVM is not unique to Blast, Blast has adopted a free-choice approach to compatibility, demonstrating a certain level of innovation.
Blast’s perfect compatibility with the EVM relies on the contract’s ability to freely choose whether to “Auto-Rebase.” Auto-Rebasing refers to automatically resetting the base. In the contract, the choice to participate in this mechanism can be made. For contracts that do not need to choose this mechanism, DApps can be easily migrated with minimal code modifications.
Perfect Solution for Multiple Benefits
The slogan of the Blast ecosystem is the only Layer2 that can achieve native income for ETH and stablecoins. How is this achieved?
ETH is not a native ERC-20 token. Generally, in cross-chain and DeFi scenarios, when we deposit ETH into a contract, the wallet can obtain a corresponding amount of WETH or other tokens. The obtained WETH can generate income in DEXs, lending platforms, liquidity pools, etc. However, this process often incurs high gas fees, preventing users with small funds from participating in staking activities. Additionally, staking ETH on platforms like Lido requires converting it to STETH, which also faces similar loss issues.
In this regard, Blast proposes the Auto-Rebasing solution, which aims to automatically update user account balances without the need for WETH, STETH, or any other ERC20 tokens. Currently, ETH staked in Blast is automatically interacted with Lido for staking, directly updating the native ETH balance without user intervention to automatically generate income. In addition, the native stablecoin USDB provided by Blast can be converted to DAI through MakerDAO’s T-Bill protocol when bridging back to Ethereum.
Although this solution may seem complex, it essentially automates the staking of tokens locked in the contract in Lido, MakerDAO, and other DeFi platforms, continuously converting them into native token income, achieving compounding interest operations while avoiding high gas fees. At the same time, the Blast development team has indicated their ability to decouple from Lido and MakerDAO in the future, which means that funds staked in Blast may not only receive Blast chain staking rewards but also have similar basic benefits as the ETH chain.
