Recently announced Ethereum layer-2 scale network Blast, led by the founder of top NFT marketplace Fadehas raised more than half a billion dollars in escrow funds from users looking for returns and rewards, as well as received significant criticism over its rollout. And now early investor Paradigm has joined the list of parties that had problems with the launch.
On Sunday Paradigm Head of Research and General Partner Dan Robinson shared a post on X (aka Twitter) who scrutinized Blast’s launch and attributed its comments to “we at Paradigm,” suggesting it reflected the attitude of the prominent cryptocurrency VC-focused company.
“There are many components of Blast that I’m excited about and would like to communicate with people about,” Robinson wrote. “That said, we at Paradigm believe this week’s announcement crossed the line in both messaging and execution.”
“For example, we do not agree with the decision to launch the bridge before the L2, or not to allow withdrawal for three months, as we believe this sets a bad precedent for other projects,” he continued. “We also think that a lot of the marketing cheapens the work of a serious team.”
There are a lot of components of Blast that I’m excited about and would like to communicate with people about. That said, we at Paradigm think this week’s announcement crossed the line in both messaging and execution. For example, we do not agree with the decision to…
— Dan Robinson (@danrobinson) November 26, 2023
Blast is billed as an Ethereum layer-2 network that offers “native yield for Ethereum and stablecoins,” allowing users to stake (or lock up) their funds in the network to earn interest-like returns.
The network is also promising Blur-like “rewards” for users, enticing early adopters to tie up their money in anticipation of a possible airdrop on the horizon. Blurring has already happened worth hundreds of millions of dollars of its BLUR token to NFT traders, catapulting the market for former leader OpenSea, and that historical example could be attractive to crypto users.
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However, while users have excitedly locked up their funds ahead of Blast’s 2024 network launch, bringing the total value of Blast (TVL) currently to around $535 million, per data from DeFi Lama– the team has also received significant criticism during the process.
Essentially, early adopters are locking their funds into a bridge that will eventually connect from Ethereum to Blast, but the Blast network isn’t actually live yet. And those funds won’t be able to be withdrawn until the expected mainnet rollout in February, which poses security concerns due to the industry’s history. network bridges be exploited for large sums of crypto. Some traders and industry builders also call Blast a Ponzi scheme, due to its reward and referral model.
Blast and Blur co-founder Tieshun ‘Pacman’ Roquerre has rebuked and written such complaints a Twitter thread on Friday that there were “a number of misunderstandings” surrounding Blast and that efforts were being made to address these.
1/ There’s a meme going around that Blast is a Ponzi. The returns Blast offers users can feel too good to be true, so this meme is understandable. But to put it simply: the revenue that Blast provides comes (initially) from Lido and MakerDAO.
Lido Proceeds Come From ETH Staking…
— Pacman | Blur + Blast (@PacmanBlur) November 24, 2023
He also said Friday that Paradigm — one of the investors in Blast’s $20 million seed round — had no role in Blast’s rollout plans. Pacman even revealed at the time that Paradigm had asked the Blast team to “make changes” to the launch and that Blast was considering them, but that it would ultimately make all decisions internally.
Robinson on Sunday praised Pacman and his team for launching Blur, which disrupted the NFT market and delivered significant rewards to users in the process. Ultimately, however, Robinson said Paradigm and Blast disagreed on certain elements of the rollout, and he felt the need to advocate for industry best practices on Paradigm’s behalf.
Someone got $8.4 million in the latest Blur NFT Marketplace airdrop
“We have discussed our concerns with the team and appreciate their willingness to engage with us, but there are still many areas of disagreement,” Robinson wrote. “We invest in strong, independent founders with whom we do not always agree. But we understand that people may look to us to set an example of best practices in crypto.”
“We do not endorse these types of tactics and take our responsibility in the ecosystem seriously,” Robinson concluded.
Declutter reached out to both Paradigm and Blast for comment, but did not immediately hear back from either side.