Upstart Layer 2 Blast Draws In $100M With Airdrop Scheme

Blast, an upcoming Layer 2 network, has pulled in over $100M of ETH and DAI deposits since unveiling an airdrop program on Nov. 20.

Set to launch as an optimistic rollup in February 2024, Blast touts native yield for ETH and stablecoins as a novel feature. Blast taps Ethereum’s native staking yield by directing all ETH deposits to Lido and DAI deposits to MakerDAO's DSR, which currently yields 5%.

While ETH will be used to transact on Blast, users’ ETH balances will automatically accrue staking yield through rebases. Similarly, USDB, the chain’s native auto-rebasing stablecoin, accrues yield from Maker and can be redeemed for USDC on Ethereum.

Blast has raised $20 million in funding from venture capital firms Paradigm and Standard Crypto, along with a diverse group of angel investors and crypto influencers.

Developed by a team led by Pacman, the pseudonymous co-founder of leading NFT marketplace Blur, Blast was launched on the same day as Blur’s second airdrop, which added 300M BLUR tokens to the circulating supply.

While large unlocks generally precede bearish price action, BLUR can be staked to earn BLAST tokens, leading the token to rally 10% in the past day on rising demand from traders. Indeed, the staking contract currently holds over 313M BLUR, serving as a highly effective sink for the newly unlocked tokens.

Community Criticism

While DeFi traders pile into Blast hoping for a lucrative airdrop, concerns have emerged regarding the network’s one-way bridge.

Once users deposit assets, they cannot be withdrawn until February, when Blast is slated to launch its mainnet. The bridge is controlled by a multi-signature wallet with five addresses, but questions have been raised about the independence of the signing cohort.

This hasn’t stopped airdrop farmers from piling in, however, with over 40,000 ETH and 17M in stablecoins deposited in just over a day.

Blast's referral program has also raised eyebrows, with many criticizing its use of multi-level marketing tactics.

Early adopters have been allocated 50% of the BLAST community airdrop, scheduled to take place in May 2024, with the remaining half reserved to incentivize developers to build on the network.