Key Takeaways:
- By leveraging optimistic rollup technology, Blast offers fast and cheap transactions while maintaining the security of the Ethereum mainnet.
- Blast’s native token BLAST airdropped on 26 June 2024.
- With over $1.65 billion in TVL, Blast now ranks as the sixth-largest blockchain globally, and the second-largest Layer-2.
- Blast Blockchain comes with a native yield offering, providing passive income to holders of ETH and stablecoins without the need for traditional staking.
Introduction
The Blast Blockchain, an Ethereum Layer-2 (L2) scaling solution, has recently captured significant attention, as it became the L2 with the second-highest total value locked (TVL).
Below, we explore what makes the Blast Blockchain stand out and its future prospects.
What Is the Blast Blockchain?
Designed to enhance scalability and efficiency, the Blast Blockchain is an Ethereum Virtual Machine (EVM)-compatible optimistic rollup solution built on Ethereum. Launched in November 2023 by the team behind Blur, a leading NFT marketplace, Blast has quickly gained traction due to its innovative approach to native yield generation on the Layer-2.
Blast currently is the fastest-growing chain of all time. Within six months of launch, over 200 decentralised apps (dapps) were launched on Blast, with $2 billion in dapp TVL. This makes Blast the sixth-largest on-chain economy. According to its Q2 report, the chain had 1.5 million users in Q2 2024.
Blast is the only blockchain to come with its own native stablecoin, USDB, which is yield-bearing. We delve into the details of earning yield on Blast below, but first let’s understand why Blast transactions are faster and cheaper than on the Ethereum mainchain.
Optimistic Rollup Technology
As an optimistic rollup, Blast executes transactions off-chain and bundles them in large batches before posting transaction data on Ethereum. Optimistic rollups assume these transactions are valid unless proven otherwise through a fraud-proof mechanism.
This allows for faster and cheaper transactions while leveraging the Ethereum blockchain for security. Optimistic rollups are one of the most promising solutions for scaling Ethereum, and Blast leverages this technology to enhance user experience and network efficiency.
Learn more about Ethereum L2s and optimistic rollups.
Why Is Blast So Successful?
Fast Transactions
Blast achieves enhanced transaction speed by batching transactions, enabling it to process thousands of transactions per second (tps), a substantial enhancement compared to the Ethereum mainnet’s capacity of around 15 tps. This increased speed significantly reduces transaction confirmation times, resulting in a smoother and more responsive user experience.
Low Fees
Additionally, Blast offers reduced transaction fees, as the efficiency gains from optimistic rollups lead to lower transaction fees. Users can expect to pay a fraction of the fees incurred on the Ethereum mainnet, making Blast a more cost-effective option for everyday transactions.
Native Yield Feature
One of the standout features of Blast is its native yield offering. Unlike traditional staking mechanisms that require users to lock their assets in specific protocols, Blast provides passive income directly to holders of ETH and stablecoins. This feature is expected to set Blast apart from other L2 solutions by offering a more seamless and user-friendly way to earn returns on assets.
Blast also offers an auto rebasing mechanism for the native yield feature. With auto rebasing, a user’s native ETH and USDB balances are adjusted directly on Blast to reflect the yield generated from staking ETH on Layer-1 (L1) and MakerDAO‘s T-Bills (for USDB). In other words, there’s no need for users to actively stake or participate in consensus mechanisms for rewards.
High Total Value Locked (TVL)
Blast’s rapid rise in TVL is a testament to its popularity and trust within the decentralised finance (DeFi) community. As of Q2 2024, Blast surpassed $1.65 billion in TVL, making it the second-largest L2 blockchain by this metric. This growth is driven primarily by users locking their assets in anticipation of future rewards and airdrops, like the initial token airdrop that happened on 26 June 2024.
How to Earn Yield on Blast
Blast aims to provide a passive income stream to its users through yield generation, incentivising them for holding and using digital assets on its platform.
Blast offers an interest rate of 4% on ETH, and 5% on stablecoins like USDC, USDT, and DAI. These aren’t the highest yields on the market, but it’s important to note that users don’t need to stake anything. People earn interest simply by having these assets in their wallet.
Blast’s Yield Generation Mechanism
Blast distinguishes itself with the introduction of native yield for Ether (ETH) and various stablecoins like USDC, USDT, and DAI. This feature is designed to enable these assets to automatically generate yield once they are transferred, or ‘bridged’, to the Blast ecosystem.
The mechanism behind this yield generation involves two primary components:
- ETH Staking: Ethereum holders can lock up their ETH to support the network’s operation and security. In return, they receive rewards in the form of additional ETH. In Blast’s framework, this staking yield is directly passed back to the users.
- On-Chain Treasury Bill (T-Bill) Protocols: When stablecoins are bridged to Blast, users receive USDB, Blast’s stablecoin. The yield for USDB comes from MakerDAO’s on-chain T-Bill protocols. The protocol works similarly to traditional treasury bills, offering a return over a set period. The yield generated is then distributed to the users.
The BLAST Token Airdrop
Blast (BLAST) has a total token supply of 100 billion. Of this, 25.5% will go to core contributors to the network, 16.5% to the network’s investors, 8% to the Blast Foundation, while 50% has been set aside for community initiatives — including its initial airdrop.
The Blast Foundation dispersed 17 billion BLAST tokens in its ‘Phase 1’ airdrop on 26 June 2024. Individual user airdrop allocations have been pre-determined by the number of Blast Points they have earned. Of the 17 billion, 7 billion went to Blast Points holders, another 7 billion to those with Blast Gold, while the remaining 3 billion were allotted to the Blur Foundation.
The airdrop introduced the BLAST token as part of a larger reward system:
- Blast Points: Users participate in this airdrop by bridging assets to Blast and inviting new members, thereby earning points, which are a measure of their contribution to the platform and determine the amount of BLAST tokens they were airdropped.
- Blast Gold: While users receive BLAST tokens, developers receive Blast Gold, a separate point system. This is to incentivise developers to build and innovate within the Blast environment. Since January 2024, the Blast incentives committee has distributed Gold on a two-to-three-week cadence and announces publicly when Gold has been distributed.
Gold is meant to be used as incentive for dapp growth, meaning that dapps should directly pass on 100% of any Gold they receive to their users. Additionally, they must integrate with the Blast Points API to do so.
How to Buy BLAST
Crypto.com offers a user-friendly platform to buy BLAST tokens and engage with the Blast Blockchain.
Follow these steps to buy BLAST on Crypto.com:
- Download the Crypto.com App and create an account.
- Complete the necessary verification process to unlock full access to the platform.
- Deposit funds into the Crypto.com account; users can utilise fiat currency or other cryptocurrencies to fund their accounts.
- Navigate to the ‘Buy’ section of the App and search for the BLAST token.
- Specify the amount of BLAST tokens to acquire and review the transaction details.
- Confirm the transaction and wait for the order to be executed.
- Monitor the BLAST token holdings in the Crypto.com App, which doubles as a wallet.
Crypto.com provides a secure and reliable trading environment, ensuring that users can trade BLAST tokens with confidence. Take advantage of the platform’s intuitive interface, advanced trading features, and competitive fees to make the most of your trading experience.
Challenges of the Blast Blockchain
Centralisation Concerns
Security and decentralisation remain a crucial concern for any blockchain project, and Blast is no exception. The platform uses a multi-signature (multisig) wallet for asset custody, requiring three out of five signatures to authorise withdrawals. While this adds a layer of security, the anonymity of the signatories has raised questions about centralisation.
Security
Security concerns revolving around the Blast chain primarily stem from the use of Layer-2 scaling solutions and off-chain transaction processing. While these technologies enhance speed and efficiency, they introduce potential vulnerabilities that could impact the overall security of the blockchain. Specifically, the reliance on optimistic rollup technology and off-chain processing may introduce new attack vectors or require robust security measures to safeguard against potential risks like data availability challenges and invalid state transitions.
Additionally, the integration of L2 solutions with the Ethereum mainnet introduces complexities in ensuring the interoperability and security of cross-chain transactions. As Blast focuses on speed and scalability, maintaining a robust security posture becomes paramount to mitigate potential threats and ensure the trustworthiness of the platform for users and developers alike.
Conclusion
The Blast Blockchain’s rise to the sixth-highest TVL highlights its potential to become a major player in the DeFi space. With its innovative features, such as the native yield offering and optimistic rollup technology, Blast is well-positioned to attract more users and developers.
However, the project must address security and transparency concerns to maintain trust and ensure long-term success.
Due Diligence and Do Your Own Research
All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any coins, tokens, or other crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.
Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a digital asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.
