$1.8 Billion in ETH Pulled from Blast L2 Network After Mainnet Introduction

Approximately $1.8 billion in Ether (ETH) has been withdrawn from the Ethereum layer-2 network Blast following the launch of its mainnet on February 29 at 9:00 pm UTC, which released nearly $2.3 billion in staked cryptocurrency that was previously locked on the network.

Blast, an optimistic rollup blockchain scaler, provides users with up to a 4% annual return on deposited Ethereum (ETH) and 5% on stablecoins held within the network, derived from staked ETH and United States Treasury Bills (T-Bills) managed by MakerDAO.

Ethereum Layer 2 Chain Blast Launches Official Mainnet

Blast 메인넷이 출시되었습니다.

얼리액세스 사용자는 메인넷으로 브리지하고 다른 곳에서는 찾아볼 수 없는 Blast 네이티브 Dapp을 사용할 수 있습니다 pic.twitter.com/BPBnxMxWbt

— Blast (@Blast_L2) March 1, 2024

According to data from DeFiLlama, Blast’s total value locked (TVL) has decreased by $520 million following the launch, with nearly $1.8 billion withdrawn.

The platform’s assets consist of approximately 469,000 ETH, 77.3 million USDC, 67.1 million USDT, 148,000 stETH, and 24.7 million DAI, as reported by a Dune Analytics dashboard. Users can now withdraw their funds following the launch of the live mainnet.

Blast, which claims to be the “only Ethereum L2 with native yield,” gained considerable attention with its deposit-only bridge announced in November. This bridge rapidly amassed over $2 billion in deposits, with depositors earning Blast “points” for holding their ETH.

The expectation was that these points could eventually be exchanged for a token airdrop, encouraging traders to engage in “points farming” to gather them. The Blast website indicates that the airdrop is scheduled for May 2024.

Crypto protocols utilize airdrops to distribute tokens to early users and contributors, often facilitating decentralized governance as well. Blast aims to make a significant impact in the competitive Ethereum scaling market—which includes networks such as Polygon, Arbitrum, Optimism, and Base—by incentivizing users with both native yield on staked cryptocurrency and a share of tokens through airdrops.

With the network now operational, traders holding Blast Points have the opportunity to redeem their deposits and may explore more favorable options elsewhere. Given that the price of ETH has risen significantly since Blast opened to depositors late last year, from around $2,000 to approximately $3,450, some traders may be looking to realize profits.

Blast Network Achieves $2 Billion TVL Milestone Amid Controversy and Alleged Exit Scam

Blast, supported by Paradigm, initially encountered criticism, with concerns raised regarding its one-way bridge and the perception of soliciting deposits while still in development.

Despite this skepticism, Blast became one of the most active layer-2 networks in terms of deposits even prior to the mainnet launch, attracting $2.3 billion in deposits from 181,000 users and generating an annual yield of $85 million.

The network had surpassed the $2 billion TVL milestone for the first time just days earlier, on Feb. 27. Airdrop hunters have been actively farming the blockchain in anticipation of receiving a Blast token, which the team has announced will be distributed in May.

The network also faced its first alleged exit scam on February 26, when a gambling protocol named “Risk on Blast” vanished with 420 ETH, valued at around $1.25 million at that time, collected from user funds for its marketed RISK presale token.

In November 2023, Dan Robinson—Head of Research and General Partner at Paradigm, the VC firm that co-led Blast’s $20 million seed round—stated that the firm believed the “announcement this week crossed lines in both messaging and execution.”

He further criticized the choice to lock up funds for months and remarked that “much of the marketing cheapens the work of a serious team.” Blast founder Pacman acknowledged that Paradigm requested them to “make changes” to the launch plan, but he asserted that it was ultimately Blast’s own decision to proceed.

Despite these initial challenges, Blast has received backing from several projects, including NFT platform Zora and pricing oracle provider Pyth, both of which announced their integration with Blast on Thursday. Furthermore, developers creating decentralized apps (dApps) on Blast are set to receive 50% of the forthcoming airdrop allocation, further enhancing the ecosystem’s attractiveness.

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