Blast Layer-2 Network Witnesses $1.7 Billion Withdrawal Following Launch

Blast Layer-2 Network Witnesses $1.7 Billion Withdrawal Following Launch

Following its launch, the Blast blockchain, a layer-2 network built on Ethereum, experienced a significant withdrawal of $1.7 billion in initially staked Ether within the first 24 hours, according to data from DeFiLlama. This mass withdrawal constituted the majority of assets deposited into the network, which had garnered attention for its promise of native yield on the Ethereum L2.

Prior to its launch, Blast had amassed over $2 billion in deposits through a mechanism known as points farming. Despite the initial excitement surrounding the project, the network encountered substantial outflows, resulting in the Blast bridge contract balance plummeting by approximately 70%.

However, not all funds have left the network, as a portion has transitioned into Blast’s ETH Yield Manager Proxy, indicating a redistribution of capital within the ecosystem.

The launch of Blast was not without controversy, as the optimistic rollup design implemented by the network requires a 14-day waiting period, along with Ethereum gas fees, for withdrawals back to the mainnet – a detail that some investors claim to have been unaware of.

Moreover, Blast has already fallen victim to its first exit scam, with the ‘RiskOnBlast’ protocol disappearing along with $1.3 million worth of Ether.

Blast’s evolution from a deposit-gathering initiative to a live network has evoked mixed reactions. While critics have likened its deposit-only bridge to a pyramid scheme, proponents have lauded its potential to enhance Ethereum’s scalability.

Despite facing these challenges, Blast has retained a significant amount of deposits, potentially positioning it as the third-largest layer-2 network on Ethereum.

The project, backed by Paradigm and led by NFT decentralized application Blur founder Tieshun Roquerre, has been both praised for its marketing success and criticized for delays in transitioning from concept to functional project.

With a Discord community boasting over 85,000 accounts and 57,000 wallets interacting with the chain since its launch, Blast’s ecosystem continues to grow, despite concerns over the viability and security of new projects within its domain.

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