On February 29, the release of Blast Network’s mainnet was marked by a significant financial shift within the Ethereum ecosystem. Approximately $400 million was withdrawn, and $2.3 billion in staked crypto assets became accessible again. Blast Network, backed by MakerDAO, tempts users with a 5% annual yield on their staked Ethereum and US Treasury Bonds generated on the platform.
Introducing Blast Network’s Financial Incentives
Prior to its mainnet going live, Blast Network had secured the crypto assets it received, leaving its 180,000 users with no withdrawal options. This practice drew criticism from many within the cryptocurrency sphere.
Data from DeFiLlama showed a peak in Blast’s total locked value at $2.27 billion, which then experienced a 17.5% decline to $1.87 billion post-launch, due to the substantial withdrawal. This financial movement occurred shortly after the network had first crossed the $2 billion threshold in total value locked (TVL) on February 27, an achievement that garnered significant attention.
Controversy and Skepticism Surrounding the Blast Network
Blast Network’s entrance into the market stirred up debate. Paradigm’s research director, Dan Robinson, openly criticized the network’s decision to restrict withdrawals and launch its bridge before fully establishing Layer-2. According to Robinson, such actions tarnish the reputation of legitimate teams and the industry as a whole.
Further casting doubt on the network’s reliability, a scam dubbed ‘Risk on Blast’ executed the first rug-pull on the network on February 26, defrauding users of 420 Ethereum, equivalent to $1.25 million. This event led to comparisons with similar fraudulent activities encountered in the Solana ecosystem and an erosion of trust in Blast Network.