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

2 mins
Updated by Geraint Price
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In Brief

  • Over 19,000 users have deposited funds to Blast, a new Ethereum Layer 2 protocol, raising $60 million in total value locked.
  • Blast, developed by Pacman, the founder of non fungible token (NFT) marketplace Blur, offers native yield for ETH and stablecoins.
  • Despite the hype, users depositing assets to Blast cannot withdraw them until February 2024, raising security concerns.
  • promo

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.
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
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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In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Harsh Notariya
Harsh started investing in crypto during the 2021 bull market. He took the opportunity of the market crash in May to learn more about Bitcoin and blockchain technology. Since then, he has helped metaverse projects build an engaging community and educate them on Web3. He has also helped Web3 creators write educational blogs around crypto.