Blast: The Beginning of Profit Narratives

Blast airdropped tokens to the community at 10 PM on June 26, marking the end of a large-scale airdrop event. From the perspective of investment institutions, community enthusiasm, and TVL, Blast is the only top project this year that can rival ZKsync. Layer 2 has entered a new phase; how will Blast itself and the Layer 2 ecosystem develop after this large and somewhat controversial airdrop?

1. Project Background

Environment-driven Innovation

In traditional Layer 2 ecosystems, users earn ecosystem tokens as rewards through staking. At the same time, project parties use staked tokens to complete transaction validation under the POS model and provide token incentives for users to participate in network maintenance and development, achieving a win-win situation. Since Layer 2 is built on Layer 1, the staked funds bear double system risks, and Layer 2 projects usually need to offer staking rates higher than Layer 1 as compensation. So is there a way for Layer 2 to achieve higher capital returns? Blast has emerged to address this.

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 scaling, speed, and cost reduction, Blast is dedicated to improving the shortcomings of Layer 1 and providing higher economic efficiency. Blast will be the first Layer 2 to offer fixed income staking for ETH and stablecoins, and this yield-centric narrative may guide the construction of Layer 2 back to the financial attributes of Web3.

Development History

• The project will launch in November 2023, having secured $20 million in seed round financing.
• In November 2023, a unique yield model was announced, offering 4% ETH and 5% stablecoin yields.
• Mainnet launch in February 2024
• Airdrop plan to be announced in May 2024
• Airdrop executed on June 26, 2024

market growth

Blast Chain is highly sought after in the market. As of the time of writing, its TVL has reached $1.6 billion, ranking 6th among all chains and accounting for 1.71% of the total locked amount.

2. Token Economics

token functionality

$Blast token has basic functions such as ecological governance, airdrop incentives, and staking rewards, but currently lacks outstanding features. However, the governance rules and regulations of the Blast ecosystem are relatively complete.

Token Allocation

The total supply of Blast tokens is 10 billion.

• Community receives 50%, linear unlock over 3 years
• Core contributors will receive 25.5%, 25% will be unlocked after one year, and 75% will be unlocked linearly over the following three years.
• Investors receive 16.5%, 25% unlocked after one year, and 75% subsequently unlocked linearly over three years.
• The foundation receives 8%, linear unlocking over 4 years

Phase One Airdrop

• Blast Points holders share 7%
• Blast Goal holders share 7%
• The Blur Foundation receives 3% for distribution to the Blur community.

Airdrops for wallets 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 much lower than Blast Points, providing higher effective benefits.

3. Narrative Features

Perfect compatibility with EVM

Blast achieves perfect EVM compatibility through the contract's feature of freely choosing "whether to Auto-Rebase". This approach facilitates DAPP migration and demonstrates innovation.

A perfect solution for one fish to eat multiple times.

Blast proposes the Auto-Rebasing( auto rebase) solution, allowing for automatic updates of user account balances without the need for tokens such as WETH. Staked ETH automatically interacts with Lido to directly update the native ETH balance. USDB can be exchanged for DAI when bridged back to Ethereum through MakerDAO's T-Bill protocol.

Essentially, this is the automation of staking locked tokens in DeFi, continuously converting into native token yields, achieving compound interest while avoiding high gas fees. In the future, Blast is expected to achieve this functionality independently from Lido and MakerDAO, allowing users to earn staking rewards from both the Blast chain and the ETH chain.

4. Ecological Construction

The Blast ecosystem covers multiple sectors including SocialFi, GameFi, DeFi, and NFTs, featuring stronger narrative and comprehensiveness.

DEX leader Thruster

Thruster is a yield-focused DEX designed specifically for degens, with a TVL of $438 million. Main features:

• By adopting the AMM model, users can provide liquidity to earn fees.
• Provide both simple and complex UI modes
• Utilize Blast chain to automate staking rewards to improve liquidity and trading efficiency
• Design weekly lossless lottery to attract user participation

Leverage Lending Leader Juice Finance

Juice Finance is the largest leveraged lending platform on the Blast chain, with a TVL of $394 million. Main features:

• Leverage Lending: Use WETH as collateral to borrow up to 3 times USDB
• Yield Farm: Provides various strategy vaults
• Permissionless lending and cross-margin features

Capital effect enhances platform Zest

Zest utilizes the native ETH yield of the Blast chain to enhance capital efficiency. Users can stake $150 worth of ETH to receive $100 in zUSD and $50 in Leveraged ETH. zUSD inherits the ETH yield rate, while Leveraged ETH takes on volatility, achieving risk-free leveraged returns.

SocialFi leader Fantasy

Fantasy is a new type of platform that combines social finance and trading card games. Main features:

• Provide cards based on well-known figures in the Crypto Twitter community
• Holding the card earns 4% native yield from the Blast chain and 1.5% ETH from card trading volume.
• Weekly card deck competitions will be held, with awards based on trading activity and social media influence rankings.

As of the time of writing, the total trading volume of Fantasy NFT reached 93.11 million USD, with 36,700 participants, ranking 5th in the Blast chain SocialFi.

V. Future Development and Risk Analysis

Future Development Trends

• Blast may become a symbolic project, on par with Uniswap's status.
• The high yield characteristics will continue to attract funds from other chains until yields balance.
• Blast Chain provides a solid foundation for DeFi development, and related projects may achieve faster growth.

Risk Analysis of Privacy

The Auto-Rebasing feature of the Blast chain enables automatic acquisition of Layer 1 staking rewards, but it also introduces potential risks:

• Technical aspect: Optimize capital efficiency, but increase overall system risk.
• Risk Aspect: Staking through third-party platforms may result in losses due to market fluctuations.
• Permission level: Users automatically assume risks, which may impair their fund disposal rights.

Overall, the high returns of Blast come with increased systemic risks, but it remains attractive to small capital users. Its yield characteristics may be adopted by other Layer 2s and are worth ongoing attention.