Blast: The Pioneer of Layer2 Yield Narratives

Blast airdropped tokens to the community at 10 PM on June 26, marking the nearing end of this highly anticipated airdrop event. Based on investment institutions, community enthusiasm, and TVL, Blast is undoubtedly a top project this year that can rival ZKsync. As Layer2 enters a new phase, the future development of Blast and the entire Layer2 ecosystem is worth paying attention to.

1. Project Background

Environment-driven Innovation

In traditional Layer 2 ecosystems, users obtain ecosystem tokens as rewards through staking, while project teams use the staked funds to complete transaction verification. Since Layer 2 is built on Layer 1, the staked funds face dual system risks; therefore, Layer 2 projects usually need to offer staking rates higher than those of Layer 1. Blast was born to further enhance capital returns in Layer 2.

Basic Information

Blast is an Ethereum Layer 2 network based on Optimistic Rollups, launched by PacMan, the founder of Blur. Unlike other Layer 2 solutions that focus on scalability and cost reduction, Blast aims to address the shortcomings of Layer 1 and provide greater economic efficiency. It is the first Layer 2 to offer fixed income for ETH and stablecoin staking, shifting the focus of Layer 2 development from technical attributes to the financial attributes of Web3.

Development History

• November 2023: Project launch, secured $20 million in seed round financing
• November 2023: Announce a unique yield model, offering 4% ETH and 5% stablecoin yield.
• February 2024: Mainnet Launch
• May 2024: Airdrop plan postponed to June 26
• June 26, 2024: Official airdrop begins

Market Growth

Blast is highly sought after in the market, with a TVL of $1.6 billion, ranking 6th among all chains, accounting for 1.71% of total locked assets.

2. Token Economics

token function

$Blast token has basic functions such as ecological governance, airdrop incentives, and staking rewards. In terms of ecological governance, the Blast ecosystem has relatively complete governance rules and regulations.

Token Allocation

Total supply of 10 billion coins:

• Community: 50%, 3-year linear unlocking
• Core contributors: 25.5%, 25% unlocks after one year, 75% unlocks linearly over the following 3 years.
• Investors: 16.5%, allocation method same as core contributors
• Foundation: 8%, 4-year linear unlocking

First Phase Airdrop

• Blast Points holders share 7% of the total supply
• Blast Goal holders share 7% of the total supply
• The Blur Foundation receives 3% for distribution to the Blur community.
• The top 0.1% wallet airdrop will be released linearly over 6 months.

3. Narrative Characteristics

Perfect compatibility with EVM

Blast adopts the freely selectable "Auto-Rebasing" feature, achieving high compatibility with EVM, reducing migration costs, and accelerating ecosystem development.

A perfect solution for one fish to eat multiple times.

Blast achieves native yields for ETH and stablecoins through the Auto-Rebasing scheme. This scheme automatically stakes locked tokens in DeFi platforms such as Lido and MakerDAO, converting them into native token yields while avoiding high gas fees. Users can simultaneously receive Blast chain staking rewards and a base interest rate close to that of the ETH chain.

4. Ecological Construction

The Blast ecosystem covers multiple tracks including SocialFi, GameFi, DeFi, and NFT, forming a diversified ecosystem.

DEX leader Thruster

Thruster is a yield-focused DEX with a TVL of $438 million. Features include:

• Inheriting the AMM model
• Provide simple and complex mode UI
• Utilize Blast chain for automated staking rewards
• Design weekly no-loss lottery to attract users

Leveraged Lending Leader Juice Finance

Juice Finance is the largest leveraged lending platform on the Blast chain, with a TVL of $394 million. Main features:

• Leveraged Lending: Up to 3x Leverage
• Yield Farm: Offers a variety of strategy vaults
• No permission lending and cross-margin features

Capital effect enhances platform Zest

Zest leverages the native ETH yield of the Blast chain to enhance capital efficiency, offering a higher yield and lower risk auxiliary solution.

SocialFi leader Fantasy

Fantasy is a social finance trading card game with a total trading volume of $93.11 million and 36.7K participants. Features include:

• Cards based on well-known figures in the Crypto Twitter community
• Earn native Blast chain rewards and trading volume share by holding cards
• Weekly competitions are ranked based on trading activity and social influence.

5. Future Development and Risk Opinions

Future Development Trends

• Blast may become a symbolic project
• Long-term attraction of funds from other chains
• Provide fertile ground for DeFi development

Risk Analysis of Concealment

• Technical aspect: Optimize capital efficiency, reduce individual operational risks
• Risk Level: Increase the systemic risk of the entire chain funding system
• Permission levels: May affect users' rights to manage funds

Overall, the Blast high-yield accompanied by increased systemic risk is still attractive to small capital investors. Its yield characteristics may be adopted by other Layer 2 solutions, warranting continued attention.