Ethereum (ETH) veterans and DeFi analysts pointed out increasing risks associated with what is arguably TVL’s fastest-growing crypto network. The long-awaited 2024 airdrop may not be as generous as it seems, and the network itself may be exploiting the L2 story.
Explosion: Ethereum L2 or not?
Ethereum-based protocol Blast using the L2 label is the result of a trend to ‘market single-node chains as Ethereum L2s’. Co-founder of Arbitrum’s Offchain Labs, Steven Goldfeder, attributes this confusing status quo to the silence of the Ethereum (ETH) community.
This is funny, but also a sad reflection of the state of many misusing the term L2 for marketing/growth.
By staying silent while our friends and some of our most trusted brands marketed single-node chains as Ethereum L2s, we created a trend that has now grown much bigger.… https://t.co/snoYHJaOq2
— Steven Goldfeder (💙,🧡,🖊️,🦀) (@sgoldfed) November 22, 2023
As such, in many cases the story of T2 scaling is only used by projects to drive marketing and growth activities. Lately, this trend has “got a lot bigger” as the industry has created a monster.
Goldfeder commented on one of the promotional materials illustrating Blast’s technical solution. Blast developers emphasize that the product is better than Optimism and Arbitrum because dominant Ethereum L2s fail to offer native yield programs and share gas initiatives.
According to the Blast promo, they are both limited in the incentives for liquidity providers and contributors. Blast’s creators highlighted that the new product offers 10x more value compared to leading Ethereum L2s.
However, some analysts and developers believed that it should be described as a sidechain solution protected by a multi-sig contract. For example, one of the first Dune dashboards on Blast, created by 21 Shares, shows a disclaimer:
Note: Blast is not L2 yet, but they do allow users to deposit via a multi-sig contract.
Some other trackers, like L2Beat, listed Blast in the “upcoming” section. At the time of writing, the project has collected over $260 million in TVL, surpassing Starknet, Scroll, and Polygon zkEVM.
Blast airdrop math could disappoint farmers
As U.Today previously reported, the euphoria surrounding Blast could result in a liquidity crisis for Ethereum (ETH), as the first unlock will take place in February: savers will not be able to withdraw any coins for three months.
The majority of Blast liquidity providers are most likely interested in a retroactive airdrop. At the same time, a DeFi analyst who goes by @stacy_muur on Twitter compared the prospects of the Blast airdrop to some recent campaigns.
I don’t understand why you burp Blast.
Simple math ↓In just two days, @Blast_L2 has collected 38,000 airdrop participants.
This number matches the number of users who received this week’s $PYTH airdrop, which was valued at $75 million.
On average, $PYTH farmers received $2,000 per wallet.…
— Stacy Muur (@stacy_muur) November 23, 2023
At current numbers, the average airdrop bonus could only be around $700, bringing the return ratio to a mediocre 10%.
Launched on November 21, 2023, Blast is promoting itself as the first Ethereum (ETH) L2 with native yield capabilities. It resumes all injected liquidity in Lido and in Maker’s T-bills program.