The new Blast network, which is claimed to be the only Ethereum layer-2 (L2) with native yield for $ETH and stablecoins, has already attracted over $30million worth of inflows just a few hours after its launch.
Investors bridged this lump sum amount in $ETH and stablecoins on the project that went live on late Monday. This signified the continued demand for L2 networks that exist on top of layer-1 blockchain like Ethereum. Such a network helps extend the capabilities of the underlying base layer network, effectively resulting in reduced bottlenecks related to speed, cost and scalability.
A bridge, on the other hand, is a blockchain-based tool that serves as a gateway linking multiple separate blockchains. They allow for the transfer of data and assets between them.
Networks other than Blast don’t usually have yield, which means that the value of one’s asset on there depreciates over time. Whereas, a user’s balance on Blast compounds automatically, along with receiving Blast points.
The Blast yield comes from $ETH staking and RWA protocols. The yield from these decentralised protocols is passed back to Blast users automatically. The default interest rate on other L2s is 0%. On Blast, it’s 4% for $ETH and 5% for stablecoins.
In a recent post, the team said: “Blast natively participates in ETH staking, and the staking yield is passed back to the L2’s users and dapps. We’ve redesigned the L2 from the ground up so that if you have 1 ETH in your wallet on Blast, over time, it grows to 1.04, 1.08, 1.12 ETH automatically.”
However, the catch here is that users have to wait until the launch of the mainnet, scheduled for 24 February 2024, before they can withdraw any funds from the network. They cannot participate in on-chain activities during this time as well.
As of writing, Blast is invite-only too, requiring a code from invited users to gain access. Even though the early access is invite only, everyone who joins has been told to be rewarded with Blast Points. Users can redeem these points starting from May next year.
As per data available online, over $19m in Ether out of the total funds bridged has been staked on Lido. Here, it is set to earn as much as 4% annualised yield. About some $3m has been observed to be on Maker, whereas a smaller chunk of $150,000 in Dai ($DAI) stablecoins is seen in a wallet.
When bridging stablecoins, users receive Blast’s auto-rebasing stablecoin, $USDB. The yield for USDB comes from MakerDAO’s on-chain T-Bill protocol.
As per its official website, Blast’s goal as contributors is to grow the on-chain economy with the highest-yield L2 possible. Its team boasts members from FAANG, Yale, MIT, Nanyang Technological University, Seoul National University, who are said to have worked on some of the largest protocols in DeFi and Web3.
The network community is headed by pseudonymous figurehead @PacmanBlur, who is one of the co-founders of NFT marketplace Blur. Blast has also raised over $20m in a round led by Paradigm and Standard Crypto. Some of its other prominent investors include eGirl Capital, Primitive Ventures, Andrew Kang, Blurr.