Journalist
Posted:
- Blast has received enormous attention in recent weeks.
- Criticisms have surfaced that it is a Ponzi scheme.
The Blast protocol has taken the crypto world by storm in recent weeks. In a short time, Blast has managed to make significant progress in various sectors.
What is explosion?
Blast is a Layer 2 solution where users deposit cryptocurrencies, such as staked Ethereum and stablecoins, to earn returns.
In just four days, the Blast mainnet contract raised $415 million in Total Value Locked (TVL). Many joined to get the Blast L2 airdrop through their points system.
According to ASXN’s research, they simplify things: 50% of the airdrop goes to developers and 50% to Early Access users.
The airdrop for Early Access users is split between Blast deposits and Blur stakers.
However, this is a simple representation. Wagering and deposit amounts change, and they do not take into account how points are distributed, probably due to a power law. Their analysis estimates that $412 million TVL could earn $50 million worth of BLAST tokens.
But the real distribution will depend on how points are awarded.
1/
The Blast Mainnet contract has sucked in $415 million in TVL in just four days, with many participants trying to earn the Blast L2 airdrop through their points mechanism.
Let’s try to get an estimate of the return on paid-up capital in Blast and on deploying Blur: pic.twitter.com/GnzrLRwJt0
— ASXN (@asxn_r) November 24, 2023
If it looks like a duck and swims like a duck, then it probably is…
However, many members in the crypto community accuse Blast of being an elaborate Ponzi scheme due to its incentive program and high rewards.
The invitation system, where users receive points for inviting others, is causing controversy. Some say it looks like a pyramid scheme.
Critics note that there is no clear way for users to quit, which could be a problem when withdrawing funds or participating in on-chain activities.
Masterpiece or Master Ponzi…
Let’s expose the TRUTH about it @Blast_L2 :
(🧵👇) pic.twitter.com/6u9iwV2LiD
— Landon Sousa | Avem (@avemfn) November 23, 2023
Blast’s CEO responded to this criticism and addressed rewards and the invitation system in a recent tweet. While some say Blast appears to be a pyramid scheme, the CEO has made it clear that revenue comes from Lido and MakerDAO.
Realistic or not, here is the market cap of LDO in terms of BTC
Lido makes its revenue from staking ETH, part of Ethereum’s Proof-of-Stake mechanism. MakerDAO’s returns come from on-chain T-Bills, important to the US economy.
I’ve seen some misunderstandings about Blast spreading. While many of these are humorous memes, it’s important to set the record straight on a few points:
— Pacman | Blur + Pop (@PacmanBlur) November 24, 2023
Only time will tell if Blast will have a long-lasting impact on the L2 sector. However, the protocol could act as a positive advertisement for the rewards on MakerDAO and Lido.