Blast's Swift Rise to $823M TVL Amidst Challenges and Controversial Developments
Summary:
Web3 protocol Blast has quickly reached $823 million in total value locked (TVL) after its launch in mid-November. Despite this success, Blast has faced multiple challenges, including a user losing $100,000 due to a misconfigured slippage parameter. The startup is compensating for the loss using part of the $20 million it raised from investors, including venture capital firm Paradigm. Despite disagreements over strategy and governance, as well as a lack of withdrawal function, Blast continues to grow, attracting over 75,000 members and looking to hire senior engineers for future projects.
The recently launched Web3 protocol, Blast, has gained momentum quite rapidly, achieving a total value locked (TVL) of $823 million within weeks of its debut in mid-November. DefiLlama data shows a 26.5% increase in the past week alone. The meteoric rise of Blast can be attributed to its innovative business model, as it serves as a scaling solution for the Ethereum network, providing innate returns to participants who stake their assets. A guaranteed 4% yield on Ether (ETH), and a 5% yield on stablecoins is offered to those who stake.
However, the journey of Blast so far hasn't been devoid of challenges and controversy. On November 30th, it was reported that a user staking via Blast lost $100,000 upon the conversion of an investment to DAI (DAI). The mishap occured due to a misconfigured slippage parameter on the user interface, which led to Blast compensating the affected user by $10,000.
As part of remedial measures, Blast will use a portion of the $20 million it raised from investors — including venture capital firm Paradigm, credited with losing a whopping $278 million on the now-defunct crypto exchange FTX — to cover the 10% compensation. However, there are currently confrontations between Blast and Paradigm, especially following a statement from Dan Robinson, the VC firm's Head of Research, criticizing Blast's strategy of functioning without a live layer-2 network. Blast's plans to roll out its testnet and prologue a developer's airdrop in January, with a mainnet release in February, have also been taken issue with.
Robinson made his grievances public on X (formerly Twitter), arguing that Blast's approach could set a concerning precedent for other projects. Accusations voicing that the marketing tactics belittle the efforts of a dedicated team have also surfaced. The cooperative efforts between Blast and Paradigm aimed at problem solving have been observed, though unanswered questions remain regarding the VC's role in the startup's strategic decision-making process, along with the governance framework and technical paperwork of Blast.
Another topic of conversation widely discussed in the context of the protocol is its lack of a withdrawal function. Stakeholders currently trust Blast to introduce this feature sometime in the foreseeable future. Despite all these obstacles, Blast has emerged successful in drawing in over 75,000 members in a short span of time, and is actively seeking senior engineers ahead of its future launches. In other news, an increasing trend of substance abuse among cryptocurrency traders brings attention to the psychological impact of dealing with this high-risk, unpredictable market.
Published At
12/8/2023 11:46:57 PM
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