Critics have raised concerns about the inherent risks of Blast’s model, particularly the practice of staking on the Lido liquid betting protocol in exchange for Blast points.
Despite some skepticism from the crypto community, Blast, an ethereum Layer-2 blockchain that will be available in March, has successfully raised over $301 million in ethereum (stETH) and stablecoins since its introduction on Monday, according to tech/2023/11/23/ethereum-layer-2-blast-has-crypto-users-split-on-its-impact/” target=”_blank” rel=”nofollow noopener”>reports.
Blast, led by the pseudonymous @PacmanBlur, co-founder of the popular non-fungible token (nft) marketplace Blur, sets itself apart by incorporating native staking, a feature not commonly found in other Layer 2 networks.
The protocol has attracted attention not only for its unique technical approach, but also for its high-profile backers, including prominent crypto fund Paradigm and “eGirl Capital,” a group of crypto-native investors.
One of Blast’s distinctive features is its native staking capability, a functionality that sets it apart from other Layer 2 networks. The protocol aims to generate returns through staking on ethereum and real-world assets, giving users a single path for capital growth.
However, one notable caveat is that staked assets cannot be withdrawn until the Blast Bridge goes live in February. Meanwhile, users receive “explosive points,” which serve as a novel incentive mechanism.
Controversies and criticisms around the explosion staking model
Critics have raised concerns about the inherent risks of Blast’s model, particularly the practice of staking on the Lido liquid betting protocol in exchange for Blast points. Some argue that the platform is bringing Total Value Locked (TVL) to a chain that does not yet exist, raising questions about the overall security and reliability of the protocol.
Additionally, the Blast Points system has attracted attention within the crypto community, with some comparing it to a pyramid scheme. Notably, users cannot withdraw their staked assets until the Blast bridge goes live, forcing them to interact with the platform by acquiring Blast points.
These points can be earned by introducing other users through unique referral links, creating a structure where early adopters can potentially earn more points based on the number of users they bring. The whitepapers reveal that users can receive 16% bonus points when they are invited. users attract more participants, and another 8% if the second level attracts more people.
This has raised concerns about the sustainability and transparency of the protocol. A cryptocurrency trader at X commented that “Blast is really crazy,” highlighting concerns about converting eth deposited into stETH into a multi-signature by anonymous developers.
The growing number of Layer 2 networks in the DeFi space has also sparked debates about whether there is a genuine need for more platforms like Blast. With 232 existing blockchains, according to DeFiLlamaThe market is already saturated with several platforms that share similar features and users.
ethereum remains the largest, with 55% of the total value locked, followed by Tron and BSC. So the question arises: does the DeFi space need another Layer 2 network, especially one with such a unique staking mechanism?
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