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Blast, an imminent Ethereum scaling solution, has managed to secure $20 million in Ether and stablecoins hours after the blockchain project went live this Monday, attracting investors with the promise of the “native yield”. Developed by Pacman, founder of the NFT marketplace Blur, Blast will launch as an optimistic rollup in February 2024, yet supporters have immediately begun to demand deposits into a smart contract bridge. The blockchain project received considerable community interest, but only time will tell if it will live up to the hype. At any rate, depositors can earn a yield on Ether and Blast points, which depends on the number of assets bridged.
According to Binance, Blast is the first Layer 2 network with native yield, so it’s set to redefine the blockchain experience. Blast capitalizes on Ethereum staking yield by guiding Ether to Lido and deploys DAI to profit from MakerDAO’s US Treasury holdings, the organization behind the DAI stablecoin. The Ethereum scaling solution has been redesigned from the ground up so that users’ balances automatically accrue staking yields via rebases. Users must wait until the launch of the mainnet before they can withdraw any funds from the platform or take part in on-chain activities.
On Monday, Blast Announced Early Access to The Blockchain Project
Blast announced early access to the blockchain project this Monday, with the points earned expected to be redeemable in May 2024. To get started, you need an invitation, which can be obtained by quote tweeting Blast’s thread and expressing your enthusiasm for the project. If you make a nice impression and get the invite code, you’ll be able to bridge to the platform; the process is much like other Layer 2 solutions. You must connect your wallet to the platform and carefully follow the instructions. The moment the mainnet will launch, the dApps will go live, and withdrawals will be possible.
Indeed, the bridge contract uses multi-signature, being owned and controlled by five people, but there’s no reason to worry because it takes advantage of the same security model as other Layer 2 solutions, such as Optimism, Arbitrum, or Polygon. As far as the money invested is concerned, more than $19 million has been staked on Lido and $3 million on MakerDAO. Most importantly, users bridging stablecoins are gifted with Blast’s auto-rebasing stablecoin, namely USDB, which adjusts its supply to maintain price stability. USDB is a fully decentralized, low-risk, stable asset backed by a real asset, so it’s one-to-one redeemable with the US dollar.
Blast Is Promoted as A Second Layer Protocol on Top of Ethereum
The Web3 ecosystem is constantly evolving, and the introduction of Blast, a new Layer 2 solution for Ethereum, has caught everyone’s attention. For the sake of clarification, Layer 2 is a blockchain built on top of Ethereum to scale its capabilities. On account of the increasing number of people using the platform, Ethereum has been experiencing various limitations, and to solve the pressing issues, Ethereum has introduced scaling solutions to process transactions, store data, and reach consensus. Polygon is one of the most popular Ethereum Layer 2 scaling solutions, with tremendous potential for growth and mainstream adoption.
Blast seeks to set itself apart from other Layer 2 solutions by making available a native yield. More exactly, the protocol aims to provide more inclusive, profitable staking for Ether and stablecoin holders than its competitors, allowing balances to compound automatically. Part of the network’s allure can be attributed to its advocates, of which mention can be made of Paradigm, one of the most significant institutional liquidity networks in cryptocurrency. Let’s not forget about airdrop hunting, a lifeline for those struggling with the ever-expanding, ever-changing cryptocurrency space. The NFT marketplace Blur distributed roughly 300 million tokens worth $107 million.
The Layer 2, Not Launched Yet, Will Be An EVM-Compatible Optimistic Rollup
The Layer 2 blockchain will be an optimistic rollup, stacking several off-chain transactions before submitting them to Ethereum. Simply put, it reduces computation on the main Ethereum chain, ensuring considerable improvements in processing speeds by finalizing transactions outside the blockchain. The reason why it’s called an optimistic rollup is that it undertakes off-chain transactions are accurate and complete and doesn’t publish validity proofs for transaction batches posted on-chain. As mentioned earlier, the increased activity on Ethereum comes at a cost – scalability. The limits on block sizes and times reduce the network’s ability to scale and accept more users.
Optimistic rollups and ZK rollups aren’t the same thing; the former uses fraud proofs, while the latter uses validity proofs to prove transaction validity. Other differences include capital efficiency, data compression, EVM compatibility, liveness requirements, and security properties. ZK rollups ensure better privacy and security, but they’re not widely accepted in the DeFi space, so optimistic rollups are a viable alternative. The Ether invested will be staked on the Blast platform, and withdrawals will be available after the mainnet is launched, which is expected to occur in February 2024.
Final Thoughts
There are some risks associated with the blockchain project so far, such as the potential impact on the price of Ether. As opposed to Bitcoin, Ethereum doesn’t have an interest in introducing scarcity to raise prices, which has become a pressing concern for the community. What is important to understand is that just because it’s less expensive to run the network, that doesn’t mean Ether value gets affected. Gas prices will still be high, so Ethereum will have no choice but to burn Ether to increase scarcity, avoiding the vastly exceeding demand.
Blast is designed to support Blur with Layer 2 solutions, creating a mutually beneficial relationship for both platforms. It shouldn’t come as a surprise that Blur plans to test and use its apps on Blast, including NFTs, elevating the overall experience. The promised network will be launched soon enough, but that hasn’t reduced the appetite of investors, so it’s expected that more capital will pour into the platform in spite of the uncertainty surrounding Blast points. Users must be careful when working with an early-stage crypto protocol.
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