Victim loses $130,000 in phishing incident

While Layer 2 networks have become immensely popular in recent months, scammers are targeting newly launched ones and duping investors through creative phishing schemes to misappropriate funds.

Blast, the recently launched layer 2 ethereum network, has caught the attention of these malicious entities, with one victim losing over $130,000.

Explosive phishing scam

A scammer posed as Paradigm partner Matt Huang to support phishing links for Blast. Bitrace was the first to flag the incident, which caused economic damages of more than $130,000. According to the popular blockchain analytics data company, the imposter’s message in the official Blast tweet “has not yet been processed.”

Blast, which went live on November 20, has rapidly gained popularity amid growing interest in layer 2 solutions within the ethereum ecosystem. It has prominent investors, including Paradigm, which led a $20 million investment round alongside Standard crypto.

In its first week, Blast has attracted a total value locked (TVL) of more than $375 million, according to data collected by DefiLlama. The platform, created by Tieshun Roquerre, also known as ‘Pacman’ and founder of the nft marketplace Blur, introduced a unique yield generation model for both ether and stablecoins, capturing the attention of investors.

The rapid success of the protocol is likely to attract the attention of scammers involved in phishing scamsattempting to exploit unsuspecting investors for financial gain.

Critics’ reaction

Less than a week into existence, Blast has already faced backlash regarding the structure and marketing of its model.

A main concern revolves around the platform’s current withdrawal limitation, which will be extended until February 24 of next year. This restriction raises concerns about liquidity and asset control, which could undermine users’ confidence in the accessibility of their funds.

Meanwhile, members with invite-only early access receive bonus points based on the scope of their bridge activities and the people they invite. Rewards accrue from those they invite directly, along with a smaller proportion of rewards generated by people lower in the hierarchy brought by their initial invitees. Some critics have drawn parallels between Blast and a pyramid scheme.

Polygon engineer Jarrod Watts recently he pointed potential risks associated with the “allow transition” feature of the “mainnetBridge” platform and contract, which can potentially open the door to unrestricted access to all staked eth and DAI, posing a significant threat to the assets of the investors.

Watts outlined several concerns on Twitter, noting that Blast currently lacks an operational network for transactions or bridges to ethereum. Instead, the Blast smart contract receives user deposits and stakes them in Lido eth and MakerDAO’s on-chain T-Bill protocol to generate yield.

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