How Blast gained the community’s attention and why is it called a scam?

As a researcher with experience in the blockchain industry, I’ve been closely following the developments surrounding Blast, the Ethereum-based layer 2 network launched by Tieshun Roquerre, also known as Pacman. The project has gained significant attention from the community, but there are also criticisms labeling it a pyramid scheme.

As a network analyst, I’ve noticed a growing buzz around Blast, a layer 2 solution, within the cryptocurrency community. However, there are also voices of skepticism labeling it as a potential pyramid scheme.

Tieshun Roquerre, recognized by his nickname “Pacman,” introduced Blast, a layer 2 Ethereum network, to the public. He’s also the mastermind behind the Blur non-fungible token (NFT) marketplace.

With Blast, you can get native returns on Ethereum and stablecoins, at rates of 3.4% and 8% respectively. Initially, though, users couldn’t withdraw their earnings, which raised concerns that Blast might be similar to a pyramid scheme.

With Blast, users don’t have to worry about staking as it takes care of this process for them. Effectively making it a layer 2 solution, Blast offers native yield on users’ assets. As the network functions, it naturally connects these assets to the Ethereum mainnet for staking and subsequent earning of interest.

Users’ deposits in Blast generate returns through different mechanisms: ETH is staked in Lido’s liquid staking protocol for assurance, while stablecoins are utilized within MakerDAO’s DeFi system. The earnings materialize in the form of USDB, the project’s stablecoin. These rates compound over time, accruing to the entire balance rather than just the initial deposit. This model follows the Risk-Free Rate (RFR) framework for returns.

Blast Points and Blast Gold

In the platform Blast, Points and Gold pieces are automatically incorporated into deposits. These Points self-accumulate yet are further granted for making deposits, inviting new users, and activating multipliers. Multipliers can be acquired while testing the initial projects on Blast’s blockchain.

Blast Gold distributes ecosystem financial projects to users to provide liquidity, and the amount of funds deposited has a more significant influence. The Points and Gold awarded to users were converted into BLAST tokens as part of the airdrop on June 26.

As an analyst, I’d describe Blast’s scoring system as follows: This game offers two methods to earn points. Initially, you’ll receive spins, and each spin comes with a random point reward. Typically, the range is between 100 and 2,000 points. Occasionally, if fortune favors you, an investor might land a super spin, which amplifies the number of points gained from the spin by a factor of 2 to 9.

Users are rewarded with a percentage of the points earned by the investors they bring in. Specifically, users will receive 16% of the points that traders they refer accrue, and an additional 8% from the points earned by those new traders’ referrals.

Blast overtakes layer 2

As a crypto investor, I’ve noticed an impressive surge in Blast’s popularity. Within a short span of four months, it has outpaced many existing layer 2 protocols. Amazingly, it has already amassed several million user deposits. The network was launched at the end of February and currently boasts approximately 280,000 active users on a monthly basis.

Within a short period after its inception, Blast surpassed the capabilities of numerous prevailing layer 2 solutions with respect to the quantity of bridge deposits. When Blast introduced its token onto the exchange, it had amassed an impressive total value locked (TVL) from user assets worth over $2 billion.

Blast has crossed $2 Billion in Dapp TVL, making it the 6th largest onchain economy globally.
— Blast (@blast) May 28, 2024

Accusations of fraud

In my role as a researcher studying the details of the airdrop campaign, I can share that a significant portion, specifically 17 billion tokens, were distributed (representing approximately 17% of the total issuance). Among these tokens, an allocation of 7 billion was earmarked for individuals who had provided initial liquidity to the platform by holding Blast Points. These holders contributed either ETH or USDB stablecoin in exchange for their allocation.

As a researcher studying the Blast ecosystem, I can explain that out of the 7 billion BLAST tokens generated, 7 billion were allocated and dispersed among users who engage with decentralized applications (dApps) within the network. In return for their interaction, these users receive Blast Gold as rewards. Of this total token supply, 3 billion coins are earmarked for the Blur Foundation. The Blur Foundation is then responsible for distributing these coins to the Blur NFT marketplace community in various ways, including airdrops.

However, shortly after the airdrop was launched, the crypto community accused Blast of fraud.

Christian2022.eth, a user, expressed his belief that Blast is a deceitful venture and its creator has a history of dishonest practices. He arrived at this conclusion based on his own encounter with the platform. Specifically, he voiced frustration over not receiving an adequate number of tokens during the airdrop as an investor.

I recently invested over $50 million into Blast_L2 and received a $100,000 airdrop during their token generation event. however, I strongly suspect that Blast_L2 is a fraudulent project and PacmanBlur has a history of abandoning projects, or “rug pulling.” I have never before blocked anyone on CryptoTwitter, but I feel profoundly embarrassed for having trusted him. This will be my final tweet.
— Christian2022.eth (@Christianeth) June 26, 2024

Multiple users pointed out the prevalence of phishing links being spread throughout the network, disguised as Blast resource offers by the hackers. X number of users were significantly impacted by these scams. Deceptive ads emerged on social media platforms, with the creators falsely claiming that an airdrop had already started. The attackers urged those seeking coins to visit a separate website instead.

As an analyst, I’m concerned about the lack of transparency surrounding the claim link mentioned by @Blast_L2 in their recent tweets. In my experience, it’s not uncommon for potential scams to avoid sharing direct links in public announcements and instead direct users to private channels or external websites.
— Mihai ᛋ (@mihai673) June 26, 2024

What is next

As a network analysis specialist, I’ve come across developers intending to implement their application infrastructure and digital wallet on the Blast network. This network is anticipated to challenge MetaMask in the market.

Developers at Blast Companies evaluate competitors’ strategies in relation to Android OS, implying that layer 2 solutions primarily concentrate on enhancing network efficiency and rely heavily on external parties for building an ecosystem. In contrast, Blast intends to fully optimize not only the underlying infrastructure but also the entire suite of applications.

As a researcher studying the Blast phase one incentive system, I’ve discovered that it specifically targets categories of blockchain applications currently in demand from the market. Among these are decentralized exchanges (DEX), which include platforms facilitating derivatives trading and lending protocols.

Developers assert that the profitability calculation mechanism is expected to attract more users to the project due to its effectiveness, as demonstrated by Blur’s success in surpassing OpenSea. Rokerr aims to position Blast as the front-runner among layer 2 networks with this incentive system in place.

Why is everyone talking about Blast

The groundbreaking project, Blast, captivates a vast audience due to its unique innovations and prospect of extra earnings. As an advanced layer 2 solution on Ethereum, it holds immense growth potential. The enticing feature that rewards users for staking funds has drawn in numerous participants and investors alike.

2024-07-03 18:54