Author: Trustless Labs
Blast conducted a community airdrop of $Blast tokens on the evening of June 26th, marking the conclusion of a major airdrop event. Without a doubt, judging from investment institutions, community enthusiasm, and TVL, Blast stands alone this year alongside ZKsync as a top-tier project. As Layer 2 advances to its next phase following the massive and controversial airdrop campaign, questions arise about the future development of Blast itself and the Layer 2 ecosystem.
I. Project Background
Driving Innovation in the Environment
Traditionally, in conventional Layer 2 ecosystems, users earn Layer 2 tokens by staking ecosystem tokens, stablecoins, and other assets. Simultaneously, Layer 2 projects incentivize token staking to secure and develop networks under a Proof-of-Stake (POS) model, aiming for mutually beneficial outcomes. Typically, due to Layer 2’s dependency on Layer 1, funds staked on Layer 2 face risks from both systems, necessitating higher staking rewards on Layer 2 to compensate for these risks. For instance, Polygon’s Matic offers annual rates typically ranging from 8% to 14%, while ETH on the Ethereum network offers rates of 4% to 7%. Is there a method to further increase capital returns on Layer 2? Thus, Blast emerged.
![img]
Figure 1 Blast-logo
Basic Information
Blast, founded by PacMan, the creator of Blur, is an Ethereum Layer 2 network based on Optimistic Rollups. Previously, PacMan’s Blur executed the fifth-largest airdrop in history. While other Layer 2 projects focus on expanding transaction capacity, increasing transaction speeds, and reducing gas fees, Blast concentrates on addressing deficiencies in Layer 1 while offering higher economic benefits. In essence, Blast is poised to become the first Layer 2 platform providing fixed returns on ETH and stablecoin staking. This narrative, centered on earnings, may guide Layer 2 development back to the financial attributes of Web3 itself.
Development Timeline
– November 2023: Project initiation; Blast, initiated by PacMan, founder of the NFT platform Blur, begins as an Ethereum scaling solution. The project secures a $20 million seed round led by Paradigm and Standard Crypto.
– November 2023: Milestone declaration; Blast announces its unique revenue model, returning ETH staking and RWA protocol earnings to users, offering 4% ETH returns and 5% stablecoin returns.
– February 2024: Mainnet launch; Blast officially launches its mainnet, although users could not withdraw locked funds initially, causing some discontent.
– May 2024: Airdrop plan; Originally scheduled for May, the BLAST token airdrop was postponed to June 26th, with increased distribution to compensate participants.
– June 26, 2024: Airdrop release; Blast conducts its airdrop, allocating 50% of rewards to developers (via Blast Gold points) and the remaining 50% to early users (including those who bridged funds to the network before mainnet launch).
Market Growth
Blast has garnered substantial market attention, with its Total Value Locked (TVL) reaching $1.6 billion as of the drafting time, ranking it 6th in TVL and 11th in Protocols. Its locked assets constitute 1.71% of all on-chain locked assets.
![img]
Figure 2 Blast TVL Share
![img]
Figure 3 Blast Metrics Variations
II. Token Economics
Token Functionality
The $Blast token functions similarly to other Layer 2 tokens, encompassing ecosystem governance, airdrop incentives, and staking rewards, without particularly distinctive features so far. However, in terms of ecosystem governance, Blast boasts more comprehensive governance regulations and rules compared to other Layer 2 ecosystems, potentially highlighting its advanced ecosystem development.
Token Allocation
Blast’s total token supply is 10 billion, distributed among the community, core contributors, investors, and the foundation.
– Community: 50% of airdrops, totaling 50,000,000,000 tokens, unlock linearly over three years from TGE.
– Core Contributors: 25.5% of airdrops, totaling 25,480,226,842 tokens, with 25% unlocking one year after TGE and the remaining 75% unlocking linearly over the following three years.
– Investors: 16.5% of airdrops, totaling 16,519,773,158 tokens, with similar unlocking terms as core contributors.
– Blast Foundation: 8% of airdrops, totaling 8,000,000,000 tokens, unlock linearly over four years from TGE.
![img]
Figure 4 Blast Airdrop Allocation
Phase One Airdrop
Users holding Blast Points will share 7% of the total supply as airdrop rewards based on their points. Similarly, Blast Goal holders will also share 7% of the total supply based on their points. The Blur Foundation will receive 3% of the total supply as airdrop rewards, allocated to the Blur community. Additionally, airdrops to the top 0.1% wallets will be released linearly over six months, effectively mitigating token dumping during release. Given the lower quantity of Blast Goal compared to Blast Points, holders of Blast Goal enjoy significantly higher benefits.
![img]
Figure 5 Blast Q1 Airdrop Distribution
III. Narrative Characteristics
Perfect Compatibility with EVM
High compatibility with the Ethereum Virtual Machine (EVM) is crucial for Layer 2 on ETH. Higher compatibility implies lower migration costs and faster ecosystem construction. While Blast isn’t the first to achieve EVM compatibility, its approach allows contracts to freely choose the “Auto-Rebasing” feature. Auto-Rebasing automatically adjusts bases, facilitating seamless DApp migration with minimal code changes.
Perfect Solution for Multiple Benefits
Blast’s ecosystem slogan touts it as the only Layer 2 offering native returns on ETH and stablecoins. How does it achieve this? ETH, not being an ERC-20 native token, typically requires conversion into tokens like WETH within DeFi platforms, incurring high gas fees that deter smaller users from staking activities. Similarly, ETH staking on platforms like Lido necessitates conversion to tokens like STETH, presenting similar issues.
Blast proposes an Auto-Rebasing solution aimed at automating the staking of tokens locked within contracts into platforms like Lido and MakerDAO without needing intermediary ERC-20 tokens. This approach updates user balances directly in native ETH, enabling continual token returns while bypassing high gas fees. Furthermore, Blast’s research team indicates future capability to move beyond Lido and MakerDAO for these operations, potentially offering staking rewards similar to those on the ETH chain.