Blast’s staking strategy has increased its total value locked at $823 million despite technical difficulties and investor scrutiny.
DefiLlama data shows that Web3 protocol Blast has gained 26.5% in the last seven days, bringing its total value locked (TVL) to $823 million, just weeks after its contentious launch in mid-November.
Blast’s distinctive business strategy is the driving force behind its rapid expansion. Users that stake their funds can receive native yields from the protocol, which serves as a scalability solution for the Ethereum network. Staking users can expect a 4% yield on Ether and a 5% yield on stablecoins. Nevertheless, difficulties and unpopular developments have accompanied the protocol’s emergence.
A user staking on the protocol saw $100,000 vanish after converting a deposit to Dai, according to information released by Blast on November 30. A misconfigured slippage parameter on the user interface was the root of the problem, and Blast compensated the user $10,000 for it.
Part of Blast’s $20 million in funding, which it raised from investors like Paradigm—the same venture capital firm that lost $278 million on the defunct cryptocurrency exchange FTX—will go towards paying the 10% compensation. However, Blast and Paradigm’s relationship has its own set of difficulties.
Dan Robinson, the head of research at the venture capital (VC) firm, released a statement in late November stating that he disagreed with Blast’s plan to launch a bridge prior to the activation of its layer-2 network.
Blast plans to launch its mainnet in February, but its testnet and developer airdrop are scheduled for January and February, respectively.
Robinson stated on X (formerly Twitter) that “we think it sets a bad precedent for other projects” and that “a large part of the marketing strategy is cheapening the work of a serious team.”
Though Blast and Paradigm have been collaborating to resolve the problems, it is still unclear how the VC firm, as well as Blast’s governance structure and technical documentation, will be involved in the startup’s decision-making process.
The absence of withdrawal functionality in the protocol is a topic of noteworthy discussion. Customers who stake and deposit on Blast anticipate that the developers will include a withdrawal option in the upcoming months.
In spite of these difficulties, Blast has gained over 75,000 members in a matter of weeks, and it is currently hiring senior engineers in preparation for its next round of deployments.