Blast: A New Era of Yield-Oriented Investment

On the evening of June 26, Blast completed its token airdrop, marking the end of a significant airdrop feast. In terms of investment institutions, community enthusiasm, and locked-up volume, Blast is the only top project this year that can rival ZKsync. Currently, Layer 2 has entered a new stage; after this large-scale and somewhat controversial airdrop, how will Blast itself and the Layer 2 ecosystem develop?

1. Project Background

Environment-driven innovation

In traditional Layer 2 ecosystems, users earn Layer 2 token rewards by staking tokens, while project parties use the staked funds for transaction verification and other operations. Since Layer 2 is built on top of Layer 1, the staked funds face dual system risks, which is why Layer 2 projects often offer staking yields higher than Layer 1 as risk compensation. Blast has emerged to further enhance the capital returns of 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, speed, and reducing gas fees, Blast focuses on improving the shortcomings of Layer 1 while providing higher economic benefits. It is the first Layer 2 to offer fixed income staking for ETH and stablecoins, and this income-based narrative may guide the development of Layer 2 from technical attributes back to the financial attributes of Web3.

Development History

• November 2023: Project launch, received $20 million in seed funding
• 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, increased allocation.
• June 26, 2024: Official airdrop

Market Growth

Blast chain is favored by the market, with its locked amount ( TVL ) reaching 1.6 billion USD, ranking 6th in TVL and 11th in the number of protocols. Its locked assets account for 1.71% of all locked assets on the chain.

2. Token Economics

Token Function

$Blast token has basic functions such as ecological governance, airdrop incentives, and staking rewards, similar to other Layer 2 tokens. In terms of ecological governance, the Blast ecosystem has a relatively complete set of governance rules and regulations.

Token Allocation

The total supply of Blast tokens is 10 billion, distributed as follows:

• Community: 50%, linear unlocking over 3 years
• Core Contributors: 25.5%, 25% unlocked after one year, 75% subsequently unlocked linearly over 3 years.
• Investors: 16.5%, 25% unlocked after one year, 75% subsequently unlocked linearly over three years.
• Blast Foundation: 8%, linear unlocking over 4 years

Phase One 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.

Airdrops for wallets ranked in the top 0.1% will be released linearly over 6 months to alleviate selling pressure during token releases. The number of Blast Goals is far less than Blast Points, resulting in higher effective benefits.

3. Narrative Characteristics

Perfect compatibility with EVM

Blast's perfect compatibility with EVM relies on contracts freely choosing "whether to Auto-Rebase". This provides flexibility for DAPP migration.

A perfect solution for one fish to eat many.

Blast achieves native yields in ETH and stablecoins through the Auto-Rebasing( automatic rebase) mechanism. Users can obtain staking rewards without the need for intermediate tokens like WETH, thus avoiding high gas fees. Currently, Blast interacts with Lido and MakerDAO and is expected to independently implement this feature in the future, providing users with multiple revenue streams.

4. Ecological Construction

The Blast ecosystem covers multiple sectors such as SocialFi, GameFi, DeFi, and NFTs, forming a diversified ecosystem.

DEX leader Thruster

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

• Inheriting the AMM model, providing liquidity mining
• Simple and complex UI modes
• 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:

• Margin lending: up to 3x leverage
• Yield Farm: Offers a variety of strategy vaults
• Unlicensed lending and cross-margin features

Capital effect enhances platform Zest

Zest leverages the native ETH yield of the Blast chain to enhance capital efficiency, providing risk-free leveraged returns of zUSD and Leveraged ETH.

SocialFi leader Fantasy

Fantasy is a social finance trading card game that combines elements of social finance and card games. Features:

• Cards based on well-known figures in the Crypto Twitter community
• Cardholders can earn native rewards from the Blast chain and receive a share of card transaction volume.
• Weekly competitions are held, ranked by trading activity and social influence.

As of now, the total trading volume of Fantasy NFT has reached 93.11 million USD, with 36,700 participants.

5. Future Development and Risk Opinions

Future Development Trends

• Blast may become a flagship project, similar to Uniswap.
• The high yield feature is expected to continue attracting funds.
• Provide a fertile ground for DeFi projects

Risk Analysis of Concealment

• Technical Aspect: Auto-Rebasing optimizes capital efficiency
• Risk aspect: Increased the systemic risk of the entire blockchain funding system.
• Permissions aspect: may involve issues related to users' rights to dispose of funds

Overall, the high returns of Blast come with increased systemic risk, but it remains attractive to small investors. Its revenue model may be adopted by other Layer 2 solutions, which is worth continued attention.