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Blast’s Early Access Generates $60 Million TVL: Exciting Launch or Potential Rug Pull? 3m ago by

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Users are racing to bridge their assets to Blast, a new Layer 2 protocol on the Ethereum (ETH) network. However, there’s a catch.

Ethereum Layer 2s, such as Arbitrum, Optimism, Polygon, and others have attracted huge community interest. Meanwhile, another project has entered to compete with the established Layer 2s in the market.

New Ethereum Layer 2 Blast by Invitation Only

On Monday, Blast announced early access to the project, where users will be able to bridge to the platform after getting an invite code. The project claims that it is the only Ethereum Layer 2 with native yield for ETH and stablecoins.

Read more: Layer 1 vs. Layer 2: What Is the Difference?

The project received huge community interest, particularly because it is built by “Pacman”, the founder of the non-fungible token (NFT) marketplace Blur. Additionally, Blast has raised $20 million from notable investors such as Paradigm, Standard Crypto, eGirl Capital, and Andrew Kang.

The screenshot below from a Dune dashboard shows that over 19,000 addresses have deposited funds to Blast.

Number of Blast Depositors. Source: Dune

Within hours of the announcement of early access, the project has hit nearly $60 million in total value locked (TVL). Out of that, the project has staked over $50.6 million on the liquid staking platform Lido, and over $8 million is allocated to earn yield on Maker. Whereas $1 million worth of crypto assets remain idle.

Read more: Top 7 High-Yield Liquid Staking Platforms To Watch in 2023

Allocation of Funds Deposited to Blast. Source: DeBank

Airdrop Hype

Airdrop hunting is mainly believed to be the reason for the huge community interest. Plus another Layer 2 project, Arbitrum, conducted a $120 million airdrop earlier this year.

Read more: Best Upcoming Airdrops in November 2023

Also, Pacman’s primary project, Blur, received hype to a sizeable airdrop for the platform’s users. Pacman hinted at Blast’s airdrop and wrote on X (Twitter):

“In the meantime, if you participated in Blur’s Season 2, you can claim your S2 airdrop today. Blast is powering Blur Foundation’s Season 3.”

But, on the flip side, users who deposit their assets io Blast cannot withdraw them till February 2024. The project will only enable withdrawal after its mainnet goes live in February. On-chain analyst Hitesh Malviya wrote, warning about the risk of locking funds on Blast:

“If you deposit into Blast your ETH or stablecoin will remain locked until February, and you get smart contract related security risk too. Beware of this.”

Some also fear the possibility of rug pull. A crypto trader, “ImNotTheWolf, wrote:

“What if Blast is a rug pull scam with Ponzinomics advertising?”

Do you have anything to say about the new Ethereum layer-2 or anything else? Write to us or join the discussion on our Telegram channel. You can also catch us on TikTok, Facebook, or X (Twitter).

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